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SHELTER FOR THE HOMELESS INC. dba AMERICAN LODGING (SHELTER) - 2000-03-20
(24) April 17, 2000 - Council/Agency Minutes - Page 24 (CITY COUNCIL) APPROVED RECOMMENDED BUDGET AMENDMENT TO FY99100 PARK ACQUISITION & DEVELOPMENT FUND FOR THE RETURN OF PARK IN-LIEU FEES FROM CATELLUS RESIDENTIAL GROUP FOR (1) DEVELOPMENT OF A NEIGHBORHOOD PARK AT FORMER MEADOWLARK AIRPORT SITE AND (2) EXPANSION OF GIBBS PARK (320.45) The City Council considered a communication submitted by Community Services Director Hagan. Community Services Director Hagan clarified that action is being taken to pay back in-lieu fees, and that$499,713 is not a final number. A motion was made by Bauer, second Dettloff, to approve an amendment to the FY99100 budget by appropriating $499,713 from the Park Acquisition and Development Fund to reimburse Catellus Residential Group for the purpose of developing a neighborhood park and expanding Gibbs Park per the conditions placed on the Catellus project. The motion carried by the following roll call vote: AYES: Julien, Sullivan, Harman, Garofalo, Green, Dettloff, Bauer NOES: None ABSENT: None (CITY COUNCIUREDEVELOPMENT AGENCY)APPROVED RESUBMITTAL OF OWNER PARTICIPATION AGREEMENT (OPA) WITH SHELTER FOR THE HOMELESS DBA AMERICAN LODGING (SHELTER)ACQUISITION AND REHABILITATION OF 7802 BARTON DRIVE— eI ITUORIZED WAIVER-OF INSURANCE-REQUIREMEE A3?1 limal _Ar;RFFMFNT ...... APPROVED BY COUNCIL/AGENCY ON MARCH 20, 000 (600.10 600.30 Mt ,j 114 VNn� 6} f %wo The City Council considered a communication submitted y evelopment Director Biggs relative to technical corrections requiring resubmittal of the owner participation agreement that does not affect the deal points. Economic Development Director Biggs responded to the question in the affirmative that the project does have a transitional center in the city located in the Oak View area. Councilmember Bauer requested a report relative to the homeless issue in Huntington Beach. A motion was made by Bauer, second Dettloff to approve the Owner Participation Agreement— City Action: 1. Waive the City's insurance requirements for purposes of approving the Agency loan agreement only. Direct staff to ensure that the minimum insurance requirements are met by Shelter by the close of escrow; and Redevelopment Agency„Actions: 1. Approve a loan agreement with Shelter for the Homeless (Shelter)for$350,000 in HOME Investment Partnership funds for the acquisition and rehabilitation of 7802 Barton Drive; and 2. Approve and authorize execution by the Agency Chairman and Agency Clerk of the loan agreement and all attachments after execution by Shelter, when advised by the City Attorney's Office and authorize recordation of documents; and 3. Authorize the transfer(by wire, if necessary)of Agency funds in the amount necessary to Apex Escrow Company (Escrow No- 00018489) to effect the closing of the acquisition escrow. The motion carried by the following roll call vote: AYES: Julien, Sullivan, Harman, Garofalo, Green, Dettloff, Bauer NOES: None ABSENT: None e _ 0 Jac' City of Huntington Beach 2000 MAIN STREET CALIFORN[A 92648 DEPARTMENT OF ECONOMIC DEVELOPMENT Director 7141536-5582 Redevelopment 7141536-5582 FAX 714/375-5087 Housing 714/536-5542 April 19, 2000 Terry Tran Escrow Officer Apex Escrow, Inc. 15576 Brookhurst Street, Suite B Westminster, California 92683 Dear Ms. Tran: SUBJECT: Escrow Number 00018489-TT Shelter for the Homeless, dba American Lodging 7802 Barton Drive, Huntington Beach, CA 926 Enclosed please find the following documents related to the above escrow: 1. Owner Participation Agreement (OPA): this document provides the terms for the Huntington Beach Redevelopment Agency's loan to Shelter for the Homeless and the requirements that must be satisfied before the Agency's funds can be ►�'�� deposited into this escrow account. I have reviewed the Buyer's Estimated Closing Statement provided by your office, and as per this statement, the Agency will deposit $282,000 for property acquisition and $2,462.12 to cover escrow fees. Please send a CLTA standard form title insurance policy in the amount of $282,000 insuring the Agency as described in the OPA. In addition, please . review the OPA thoroughly and ensure that all escrow-related provisions are satisfied prior to the close of escrow. 2. Deed of Trust, including the Rider thereto: please fill-in the blanks, obtain the buyer's signatures, and record the document. 3. PromissorV Note: please fill-in the blanks, obtain the buyer's signatures, and return to the City of Huntington Beach, to my attention. This executed document must be returned to the City before funds can be wire transferred to the escrow J account. 4 ' Terry Tran Page 2 April 21, 2000 When all escrow-related provisions of the OPA have been satisfied and upon receipt of the signed Promissory Note, I will wire transfer funds in the amount of$284,462.12 to affect the close of this escrow. Any refunds due to the buyer after the close of escrow should be made payable to the Huntington Beach Redevelopment Agency, and forwarded to my attention. Thank you for your attention to this material. Should you have any questions, please call me at (714) 536-5901. Sincerely, Steve Holtz Development Specialist RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Resubmittal for Approval of an Owner Participation Agreement(OPA) With Shelter for the Homeless, Inc, dba American Lodging Shelter COUNCIL MEETING DATE: Aril 17, 2000 } RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (wlexhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Attached Contract/Agreement (w/exhibits if applicable) (Si ned in full by the City Attome�o Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attome Not Applicable Certificates of Insurance (Approved by the City Attomey) Not Attached (Explain) Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS (Insurance will be obtained by Shelter for the Homelss before the close of escrow as approved by the City Council on 3/20/00 by RCA ED 00-16. 1 REVIEWED RETURNED FORWARDED Administrative Staff k. Assistant City Administrator (initial) City Administrator Initial City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: Only)(Below Space For City Clerk's Use RCA Author: Holtz(5901) �. 13)66_f -etj 0 2 s _ 1 01,T4i le W r+- Council/Agency Meeting Held: Deferred/Continued to: Approved ❑ Conditionail Approved ❑ Denied M0.10yti k' ignature Councl Meeting Date: 4/17/00 Department ID Number: ED 00-19 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: RAY SILVER, City Administrator/Executive Director l� PREPARED BY: DAVID C. BIGGS, Economic Development Director / SUBJECT: Resubmittal for Approval of an Owner Participation Agreement (OPA) with Shelter for the Homeless, Inc, dba American Lodging (Shelter) Fstatement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: An Owner Participation Agreement (OPA) between the Redevelopment Agency and Shelter for the Homeless, Inc, dba American Lodging (Shelter) was approved by the Agency on March 20, 2000. Unfortunately, technical corrections are needed to protect the Agency's loan security — no changes were made to the deal points of the agreement. It is hereby submitted for Agency reapproval. Funding Source: 1998 HOME Investment Partnership funds. Recommended Action: Motion to: City Action: 1. Waive the City's insurance requirements for the purpose of approving the Agency agreement. Direct staff to ensure that the minimum insurance requirements are met by Shelter by the close of escrow. Redevelopment Agency Actions- 1. Approve an Owner Participation Agreement (OPA) with Shelter for the Homeless (Shelter) for $350,000 in HOME Investment Partnership funds for the acquisition and rehabilitation of 7802 Barton Drive in Huntington Beach. 2. Approve and authorize execution and recordation by the Agency Chairman and Clerk of the entire OPA and all attachments when advised by the City Attorney's Office. 3. Authorize the transfer (by wire, if necessary) of Agency funds in the amount necessary to Apex Escrow Company to affect the closing of the acquisition escrow. REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: 4/17/00 DEPARTMENT ID NUMBER: ED 00-19 Alternative Action(s): Do not approve the proposed transaction, or direct staff to renegotiate the terms with Shelter. Analysis: An Owner Participation Agreement (OPA) with Shelter for the Homeless (Shelter) was approved by the Redevelopment Agency on March 20, 2000 in RAA ED 00-16 (Attachment 1). This OPA provided a loan in the amount of $350,000 to Shelter for the acquisition and rehabilitation of a 4-unit residential rental property located at 7802 Barton Drive in the Oakview neighborhood. The OPA inadvertently included a subordination clause that would have caused the Agency to stand in second position behind another lender. It further did not include a property insurance requirement. Therefore, the OPA was rewritten eliminating all reference to subordination and adding the suggested property insurance requirements. No changes were made to the deal points of the agreement. The revised OPA (Attachment 2) is hereby submitted for Agency reapproval. Environmental Status: Not applicable. Attachment(s): DescriptionCity Clerk's Page Number No.1. RCA ED 00-16 from March 20, 2000 2. Owner Participation Agreement with Shelter for the Homeless Exhibit A: Legal Description of Property Exhibit B: Site Map Exhibit C: Scope of Development Exhibit D: Schedule of Performance Exhibit E: Release of Construction Covenants Exhibit F: Promissory Note Exhibit G: Deed of Trust Exhibit H: Regulatory Agreement Exhibit I: Project Budget/Pro Forma RCA Author: Holtz(6901) SHELTER FOR THE HOMELESS RCA -2- 4/12100 8:48 AM RAA ED 00-16 from March 20, 2000 ATTAC H M E N T # 1 Bi(OGS any. S. 9a%,T! CounciVAgency Meeting Held: - 3 - Z-0 —00 Deferred/Continued to: Approved ❑ Conditionally Approved ❑ Denied 6,x - ity W 's Signature Council Meeting Date:- March 20, 2000 Department ID Number: ED 00-16 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCY MEMBER SUBMITTED BY: r RAY SILVER, City Administrator/Executive Direct PREPARED BY: David C. Biggs, Economic Development Director , "t- SUBJECT: Approve An Owner Participation Agreement (OPA) With Shd tee-, for the Homeless dba American Lodging (Shelter) 0 Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: An OPA between the Redevelopment Agency and Shelter for the Homeless (Shelter) is submitted for approval. This agreement provides a maximum of $350,000 in HOME funds for the acquisition and rehabilitation of 7802 Barton Drive Funding Source: 1998 HOME Investment Partnership funds. Recommended Action: Motion to: City Action(s): 1. Waive the City's insurance requirements for purposes of approving the Agency loan agreement only. Direct staff to ensure that the minimum insurance requirements are met by Shelter by the close of escrow. Redevelopment Agency Actions: 1. Approve a loan agreement with Shelter for the Homeless (Shelter) for $350,000 in HOME Investment Partnership funds for the acquisition and rehabilitation of 7802 Barton Drive. 2. Approve and authorize execution and recordation by the Agency Chairman and Clerk of the entire loan agreement and all attachments after execution by Shelter, when advised by the City Attorney's Office and authorize recordation of documents. 1 3. Authorize the transfer (by wire, if necessary) of Agency funds in the amount necessary to Apex Escrow Company (Escrow No. 00018489) to effect the closing of the acquisition escrow. REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: March 20, 2000 DEPARTMENT ID NUMBER: ED 00-00 Alternative Action(s): 1. Do not approve the proposed transaction, or direct staff to renegotiate the terms with Shelter. Analysis: Shelter currently owns and manages eight units in the Oakview neighborhood, including 7801 Barton Drive. Shelter has an adjacent Barton Drive building in escrow at a reasonable price ($285,000) given current market conditions. Staff and Shelter have concluded negotiations (a complete outline of deal points is included as Attachment No. 4) and have agreed to the following terms: • The City of Huntington Beach will provide $350,000 in HOME Investment Partnership funds as a residual receipts (with a minimum repayment) loan to Shelter for the Homeless (Shelter). These funds will be used to acquire and rehab 7802 Barton Drive as follows: • $285,000 for acquisition; • Approximately $10,000 for closing costs; • A maximum of $55,000 per unit for rehab. • Shelter will contribute a minimum of $30,000 (combined) in equity and services toward the rehab of the property. • All units will remain affordable for thirty years for households earning less than 50% of Orange County median income (defined as very low income) as adjusted for family size. The thirty year affordability period exceeds those minimums (ten to fifteen years) required by the HOME program. Because these properties are located in a redevelopment project subarea and due to a thirty-year affordability period, these units will be credited toward the Redevelopment Agency's housing obligations. • The amount of HOME assistance will be carried as an interest free loan if the units remain in compliance with the terms of the agreement. Should a default occur, or should the units be sold or transferred before the term of affordability expires, the full amount of the HOME assistance must be repaid with simple (but accruing) interest. This amount is set at the prime rate, plus two points. • Beginning in the third year of the agreement, and continuing annually through the thirtieth year, Shelter will forward the proceeds of a residual receipts account to the City as a means of repayment of the HOME assistance. The minimum amount of any annual repayment will be $1,200.00. The RAAI.DOC -2- 03109I00 4:07 PM REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: March 20, 2000 DEPARTMENT ID NUMBER: ED.00-00 repayment period may be extended for up to two additional years with department head approval. • Should the economics of the project not allow for the minimum repayment of $1,200.00, then Shelter-will have the right to appeal to the City Council and request that the minimum repayment be reduced, suspended or forgiven. Shelter agrees to bear the entire burden of proving its inability to meet the minimum payment. The City Council will reserve the right to reduce, suspend, forgive or renegotiate the terms of repayment based on the evidence submitted by Shelter. • Shelter agrees to the amount of reserves that it shows on the final approved pro forma that is to be submitted to the City. Shelter will submit its audited financial statements to the City annually after acceptance and certification of such statements by Shelter's Board of Directors. The City will review the statements and may choose to require further analysis or review by a third party, but must do so at its own expense. • Rents will be set at levels that are affordable to households earning less than 50% of median income. These rent restrictions will exceed those required by HOME regulations. Unit #/Size Projected Rent 4 Two Bedroom IF $550 HUD sets maximum per unit HOME subsidy amounts on an annual basis. Currently, the maximum subsidy amount for a two-bedroom unit is $100,168. With that number, the maximum total subsidy for the Barton Drive project could be $1,001,680. The actual subsidy per unit breakdown on this project is as follows: Total HOME Subsidy: $350,000 Total Number of Units: 4 Per Unit HOME Subsidy Acquiring and rehabilitating small multifamily properties represents an opportunity to improve and preserve existing affordable housing throughout Huntington Beach, but especially in a focus area such as the Oakview neighborhood. Purchase of another property by a housing nonprofit in this area is another step toward stabilizing rental property ownership, which in turn should help improve the quality of the housing in the neighborhood by keeping rents low, and eliminating overcrowding -- at least in these buildings. RAM MOC -3- 03/09/00 4:07 PM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: March 20, 2000 DEPARTMENT ID NUMBER: ED.00-00 These units will be available to very low income households (who are currently paying $750 and up per month in rent) with more affordable rents. It is not unusual to find two or more families living together in one-family units because of the high rents. Shelter's involvement will allow one family,to occupy each unit and pay approximately 30% of their income, or the established rent, whichever is higher. On December 1, 1999, the Council's Economic Development Committee (EDC) heard a presentation on the project by Agency staff and Shelter. The EDC directed staff to move forward with the project to the full Council (Agency). The Agency's involvement with the HOME Program is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community. Environmental Status: Categorically exempt under the National Environmental Protection Act (NEPA). Attachment(s): City Clerk's Page • - No. Description 1. Loan Agreement with Shelter Exhibit E: Release of Construction Covenants Exhibit F: Subordinated Deed of Trust Exhibit G: Regulatory Agreement Exhibit H: Promissory Note Exhibit I: Subordination Agreement 2. Location Map: 7802 Barton Drive 3. Shelter Pro Forma 4. Deal Point Summary GAB: ext. 8831 RAAI.DOC -4- 03/09/00 4:07 PM Owner Participation Agreement o t161NAL- OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into as of the 171h day of April, 2000 ("Effective Date"), by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation("Participant"). RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California(California Health and Safely Code Section 33000 et seq.). B. Participant has opened an escrow to acquire the "Site" (as such term is defined herein) from Yan-Chow Ma and Tai-Ann Ma ("Seller") and intends to develop the "Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement. C. Agency desires to meet its affordable housing goals pursuant to the California Community Redevelopment Law by assisting Participant in the acquisition of the Site to facilitate Participant's rehabilitation-in-place of an apartment building of four units each on the Site. After rehabilitation, the Project shall be rented to tenants whose household incomes do not exceed vety low income as defined by California law. Agency's assistance shall be in the form of a loan in the amount of THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00) to assist Participant in meeting the cost of acquisition and rehabilitation of the Site. Said loan shall be funded from funds the Agency obtains from the HOME Investment Partnership Program. 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 "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Agency. 1 SF-2000 Agree:OCCH:OPA 04106r'00 The term "Agency Deed of Trust" shall mean the Deed of Trust attached as Exhibit "G" hereto. The term "Agency Loan" shall mean the Agency's loan to Participant in an amount not to exceed THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00) of HOME Funds, as evidenced by the Agency Note and secured by the Agency Deed of Trust. The term "Agreement" or any reference to this "Agreement" shall mean this Owner Participation Agreement executed by and between Agency and Participant, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. The term "Approved Project Plans and Permits" shall mean all of the plans,permits, and approvals required for the Project, as approved by the Agency and/or the City including, but not limited to, preliminary and final drawings (final drawings shall be in sufficient detail to obtain a building permit), site plans,building plans and elevations,grading plans, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications that City and Agency customarily require for such a Project, and including all required approvals and findings pursuant the California Environmental Quality Act of 1970, as amended, and regulations promulgated thereunder ("CEQA"), and, if applicable, the National Environmental Policy Act of 1969, as amended, and regulations promulgated thereunder. The term "City" shall mean the City of Huntington Beach, a municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648. The term "Construction/Permanent Lender" shall mean one or more lenders of Participant's choice providing funds for Participant's rehabilitation of the Units, including any replacement or permanent loan that replaces the construction lender in an amount not to exceed FIFTY THOUSAND DOLLARS (S50,000.00). 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 "Effective Date" shall mean the first day of the month, in the year 2000, following the date the Agency's governing body approves this Agreement and authorizes its Chairman to sign it; which date shall be inserted into the preamble of this Agreement. The term "Eligible Tenant" shall mean any person entitled to rent a Unit as set forth in the Regulatory Agreement. The term "Escrow" shall mean that certain escrow with Apex Escrow Company, which has been established to convey the Site from the Seller to Participant, and into which Agency shall deposit the portion of the Agency Loan funds described in Section 3.2 in accordance with the terms of this Agreement. 2 SF-2000 Aeree:OCCH:OPA 04/06/00 The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Agency, or authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved under California law wholly for Agency Board determination. 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 City or any other public or governmental agency or entity (except that any act or failure to act of City or Agency shall not excuse performance by Agency); 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 Participant. 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 "HOME" means the HOME Investment Partnership Program created by the National Affordable Housing Act of 1990. The term"HUD"means the United States Department of Housing and Urban Development. The term "Lease" means the lease entered into between Participant and a tenant of a unit in the Project. The term "Median Income" means the median income for the Orange County Primary Metropolitan Statistical Area (PMSA), with adjustments for household size, as determined from time to time by the U.S. Department of Housing and Urban Development (HUD) pursuant to the United States Housing Act of 1937 as amended, or such other method of median income calculation applicable to the City that HUD may hereafter adopt in connection with said Act. 3 SF-2000 Agree:OCCH:OPA 04/06/00 The term "Note" shall mean that certain Promissory Note Secured by that certain Deed of Trust attached hereto as Exhibit "F". The term "Participant" shall mean SHELTER FOR THE HOMELESS, IlVC., dba AMERICAN LODGING, a California nonprofit corporation, whose address is 15161 Jackson Street, Midway City, CA 92655. The Term "Project" shall mean generally the rehabilitation of the existing four-unit apartment building on the Site and the subsequent rental of the Units therein to Eligible Tenants, pursuant to the procedures set forth herein and more particularly described in the Scope of Development. The term "Project Budget/Pro Forma" shall mean the sources and uses of funds for acquisition of the Site and the development of the Project as set forth in Exhibit "I". The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto as Exhibit "H". The term"Rehabilitation Account" shall have the meaning ascribed in Section 3.9. The term "Release of Construction Covenants" shall mean that release attached hereto as Exhibit "E" issued by Agency to Participant pursuant to the provisions of Section 4.7 below. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "D" 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 collectively mean Yan-Chow Ma and Tai-Ann Ma, husband and wife, as joint tenants. 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 7802 Barton Lane, Huntington Beach, California, and legally described in Exhibit "A" and depicted on the Site Map. The term "Site Map" shall mean the map attached hereto as Exhibit "B" depicting the location of the Site. The term "Units" shall mean the four(4) dwelling units comprising the Project and subject to rent restrictions as set forth in the Regulatory Agreement. 4 SF-2000 Agree:OCCH:OPA 03/06/00 The term"Very Low Income Households" shall mean a family or individual whose annual income does not exceed fifty percent (50%) of the median income for the Orange County Metropolitan Statistical Area as determined by HUD with adjustments for smaller and larger families. SECTION 2. SUBJECT OF THIS AGREEMENT. 2.1 Purpose of the Agreement (a) The purpose of this Agreement is to implement the Community Redevelopment Law by providing a loan (the "Agency Loan") to assist Participant to pay a portion of the Project costs, in an amount not to exceed THREE HUNDRED FIFTY THOUSAINTD DOLLARS ($350,000.00), as evidenced by the Note secured by the Agency Deed of Trust, which Agency Loan is composed entirely of HOME funds. (b) This Agreement is intended to facilitate Participant's acquisition of the Site and rehabilitation of an existing apartment building located thereon for rental to very low income tenants. 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 thirty(30) years as rental housing,with all of the Units restricted to occupancy to Very Low Income Tenants. 2.2 The Redevelopment Plan. This Agreement is made in accordance with the Huntington Beach Redevelopment Project (the `.Merged Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Site is located inside of the Merged Redevelopment Project. Agency intends this Agreement to meet its obligations pursuant to Health and Safety Code Sections 33413, 33334.2 and 33413(b)(2)(A)(11). 2.3 Participant. The Participant is Shelter for the Homeless, Inc., dba American Lodging, a California nonprofit corporation, whose address is 15161 Jackson Street, Midway City, CA 92655. 2.4 Term of Agreement. The term of this Agreement shall be for a period of thirty (30)years; with such period commencing on the Effective Date of this Agreement. 2.5 Prohibition Against Transfers; Right of First Refusal_ (a) The qualifications and identity of the Participant are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant. No voluntary or involuntary successor in interest of the Participant 5 SF-2000 Agree:OCCH:OPA 0406,'00 shall acquire any rights or powers under this Agreement except as expressly set forth herein. (b) Participant agrees that Participant shall not sell the Site during the term of this Agreement, unless and until Participant has given to Agency notice in writing of its intent to sell, specifying the identity of the prospective buyer and the price and terms of the contemplated sale. Within ninety(90) days after Participant gives Agency written notice of Participant's intent to sell, Agency shall have the right to purchase the Site at the same price and on the same terms and conditions set forth in Participant's written notice of intent to sell. To exercise its option, Agency must, within the same ninety (90) day period, deposit in escrow with any escrow company in Orange County, California, all moneys and instruments required by the terms of Participant's notice of intent to sell to be paid or delivered to Participant on close of escrow and shall also give Participant written notice of the deposit. If Agency fails to exercise the right in accordance with the provisions of this section, Participant may sell the Site to the prospective buyer for the price and on the terms contained in the notice. If at any time during the term of this Agreement Participant receives from any third party a bona fide offer to purchase the Site on terms acceptable to Participant, Participant shall give written notice of the offer to Agency. Within ninety (90) days after Participant gives Agency written notice of the third-party offer, Agency shall have the right to purchase the Site at the same price and on the same terms and conditions set forth in the third-party offer. To exercise its right, Agency must, within the same ninety(90) day period, deposit in escrow with any escrow company in Orange County, California, all moneys and instruments required by the terms of the offer to be paid or delivered to Participant on close of escrow and shall also give Participant written notice of the deposit. In the event Agency fails to exercise the option to purchase in accordance with the provisions of this Section, Participant may sell the Site to the third party making the offer on the same terms and conditions set forth in that offer. If for any reason the Site is not sold to the party making the offer, Participant shall give Agency the same right to purchase the Site on receiving any subsequent offer from any third party that is acceptable to Participant. In deciding the sell the Site, Participant shall make every reasonable effort to sell the Site to another nonprofit housing corporation with Participant's similar experience and reputation in the field of low-income housing. (c) For the reasons cited above, the Participant represents and agrees for itself and any successor in interest that without the prior written approval of the Agency, there shall be no significant change in the ownership of the Participant or in the relative proportions thereof, or with respect to the identity of the parties in control of the Participant or the degree thereof, by any method or means. (d) The Participant shall promptly notify the Agency of any and all changes whatsoever in the identity of the parties in ownership and/or in control of the Participant or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Agency and the Agency may exercise its remedies pursuant to the Agency Note and Agency Deed of Trust, if there is any significant change (voluntary or involuntary) in membership, ownership, management or control, of the Participant (other than such changes occasioned by the death or incapacity of any individual). 6 SF-2000 Agree:OCCH:OPA 04i06!00 (e) Participant shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer'), without prior written approval of the Agency, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Participant. Any such proposed transferee, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Participant under this Agreement and agree to be subject to all conditions and restrictions applicable to the Participant in this Agreement. There shall be submitted to the Agency for review all instruments and other Iegal documents proposed to effect any such Transfer, and if approved by the Agency its approval shall be indicated to the Participant in writing. (f) In the absence of specific written agreement by the Agency, no unauthorized Transfer, or approval thereof by the Agency, shall be deemed to relieve the Participant 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, Participant is in escrow to acquire the Site from the Seller and as such Participant qualifies as an "owner- participant" within the meaning of the Community Redevelopment Law (Health & Safety Code §33000 et seq.). Participant's financing of the acquisition of the Site includes Participant's equity and the Agency Loan. 3.2 Agency Financial Assistance. The Agency, in accordance with the terms of this Agreement, shall provide to Participant the Agency Loan. Participant has represented to Agency that TWO HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($285,000.00) is needed to acquire the Site, TEN THOUSAND DOLLARS ($10,000.00) is needed for closing costs, and the remaining FIFTY-FIVE THOUSAND DOLLARS ($55,000.00) is needed for rehabilitation costs. Upon satisfaction of all conditions precedent (or waiver by Agency) to Agency's obligation to disburse the Agency Loan under this Agreement, Agency shall deposit up to TWO HUNDRED NLNETY-FIVE THOUSAND DOLLARS (S295,000.00) of the Agency Loan funds into Escrow for disbursement to Participant at Close of Escrow (Participant shall provide Agency's Executive Director with notice of the exact amount Agency is to deposit), with the remainder to be disbursed to pay for the costs of rehabilitation of the Site pursuant to the terms of Section 4.26). 7 SF-2000 Agme:OCCH:OPA 04/06/00 3.3 Form of Agency Financial Assistance; Purpose of Note and S.ecurity. The parties hereto expressly acknowledge that the Agency Loan funds to be provided to Participant under this Agreement is intended to be a self-liquidating loan, assuming Participant's performance of its obligations hereunder. In the event Participant is in material default of any of its obligations hereunder, including its obligations under the Regulatory Agreement, Agency's sole and exclusive remedy shall be to foreclose under the Agency Deed of Trust. 3.4 Escrow. This Agreement,once deposited in Escrow, shall constitute joint escrow instructions of Agency and Participant. The Escrow agent is hereby empowered to act under the Agreement and upon indicating its acceptance in writing to Agency and Participant within five (5) days after receipt of this Agreement; provided, however, that any undertaking by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute acceptance of the obligation to perform as Escrow agent under this Agreement. Any amendment to the Escrow instructions contained herein shall be in writing and signed by both Agency and Participant. (a) Closing ate. On or before the date established in the Schedule of Performance, the parties shall satisfy the conditions described in Sections 3.5 and 3.6 and complete the Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the date provided therefore in the Schedule of Performance, either party may terminate this Agreement, by providing notice of termination to the other parry. (b) Delivery-of Documents and Funds by Participant. On or before twelve noon on the last business day prior to the scheduled Closing Date, Participant shall deposit or cause to be deposited with the Escrow agent the following: (i) the Grant Deed executed and acknowledged by the Seller; (ii) the Note, executed by Participant; (iii) the Agency Deed of Trust, including the Rider thereto, executed and acknowledged by Participant; (iv) the Regulatory Agreement, executed and acknowledged by Participant; and (v) All funds, documents, and deposits Participant is required to deposit with Escrow agent in order to close the Escrow conveying the Site to Participant. (c) Delivery of Documents and Funds by Agency. On or before twelve noon on the last business day prior to the scheduled Closing Date, Agency shall deposit or cause to be deposited with the Escrow agent the following: (1) the Agency Deed of Trust including the Rider thereto, executed and acknowledged by Agency; 8 SF-2000 Agree:OCCH:OPA 04'0G:00 (ii) the Regulatory Agreement, executed and acknowledged by Participant; and (iii) the portion of the Agency Loan funds described in Section 3.2. (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 Agency Deed of Trust; and(iii)the Regulatory 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 promissory note to Agency and a conformed copy of same to Participant, and upon recordation deliver to Agency the original of the Agency Deed of Trust and the Regulatory Agreement and a conformed copy of same to Participant. (f) Interest Bearing Accounts. Escrow agent shall hold all funds received in an interest bearing account with the interest accrued paid at Closing to the party depositing such funds. (g) Title Insurance. Escrow agent shall deliver to Agency at Closing a CLTA standard form owner's policy of title insurance in the amount of TWO HUNDRED EIGHTY-FNE THOUSAND DOLLARS ($285,000.00), issued by a title insurer acceptable to Agency, insuring in favor of Agency the priority of the Agency Deed of Trust and Regulatory Agreement in accordance with the priority established by this Agreement. The cost of said policy shall be shared equally between the parties. f 3.5 Age=3�s Conditions to Closing. Agency's obligations to deposit the portion of Agency Loan funds described in Section 3.2 in Escrow for disbursement to Participant at Closing shall be conditioned and contingent upon satisfaction, or Agency's waiver of each of the following conditions precedent (collectively,the "Agency's Conditions to Closing"): (a) Agency shall have in its account up to TWO HUNDRED NINETY-FIVE THOUSAND DOLLARS (S295,000.00) of HOME funds; (b) Participant shall have deposited in escrow not less than THIRTY THOUSAND DOLLARS ($30,000.00) in equity or demonstrate evidence to Agency of Participant's binding commitment to provide equity to the project (e.g., Board of Directors Resolution) (see Section 5.12); (c) Participant has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow; (d) Escrow agent, at Closing, holds and will deliver to Agency the Note, Deed of Trust, Regulatory Agreement, and Title Insurance Policy. 9 SF-2000 Agree:OCCH:OPA 04fti00 (e) Participant shall deliver evidence acceptable to the Agency Executive Director that Participant has obtained the insurance policies as required by Section 4.3 of this Agreement. (f) Participant shall deliver to the Agency a good standing certificate issued by the California Secretary of State's office indicating that Participant exists in good standing at the time of the proposed Close of Escrow. (g) The Agency shall determine that Participant is in full compliance with the terms and conditions of this Agreement and all documents and instruments referred to herein or executed by Participant in furtherance of this Agreement. In the event any of the Agency's Conditions to Closing are not satisfied (or waived by Agency), Agency may cancel the Escrow and terminate this Agreement by delivering thirty (30) days prior written notice to Participant and the Escrow agent. Participant may nullify Agency's notice to terminate if, within such thirty(30) day period Participant (at no cost to Agency) cures any unsatisfied Agency's Conditions to Closing and notifies the Escrow agent of such cure. In the event of termination pursuant to this Section, (1) the Escrow shall be cancelled and any funds deposited by Agency shall be returned to it with any accrued interest earned on such funds; (ii) Participant 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. 3.6 Participant's Conditions to Closing. Participant's obligations to close Escrow shall be conditioned and contingent upon satisfaction, or Participant's waiver of each of the following conditions precedent(collectively, the "Participant's Conditions to Closing"): (a) The Seller has signed and acknowledged the Grant Deed and have deposited same in Escrow; (b) Agency has 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 portion of the Agency Loan funds described in Section 3.2, the Agency Deed of Trust, Regulatory Agreement, and such Subordination Agreements as may be required to effect the priority required by this Agreement; (c) All conditions to Closing set forth in (i) the agreements and any amendments thereto between Participant and the Seller for conveyance of the Site; and (ii) agreements and financing documents pertaining to Participant's financing of the acquisition of the Site, including as pertaining to financing by the Construction/Permanent Lender,have been satisfied (or waived by the appropriate party). In the event any of the Participant's Conditions to Closing are not satisfied (or waived by Participant), and provided Participant has fully performed its obligations hereunder, Participant may cancel the Escrow and terminate this Agreement by delivering thirty(30)days prior 10 SF-2000 Agree:OCCH:OPA 04i06:00 written notice to Agency and the Escrow agent. Agency may nullify Participant's notice to terminate if, within such thirty (30) day period Agency (at no cost to Participant) cures any unsatisfied Participant'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 Participant shall be returned to it with any accrued interest earned on such funds; (ii) Participant 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 Broker's Fees. Participant and Agency shall each indemnify, defend, and hold harmless the other from any claims or damages for payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or representations of the other with respect to any of the transactions contemplated by this Agreement. 3.8 Construction/Permanent Deed of Trust. (a) After the Close of Escrow, Participant may obtain a loan from a construction/permanent lender to be used exclusively for the rehabilitation of the Site pursuant to this Agreement. Such loan may be memorialized by a note and a Construction/Permanent Deed of Trust and shall not exceed FIFTY THOUSAND DOLLARS (S50,000.00). (b) Within 90 days after the Agency issues the Release of Construction Covenants, Participant shall cause to be prepared and shall submit to the Agency for reasonable approval a cost certification(the"Cost Certification"), setting forth all Project Costs, certified by the Chief Financial Officer of Participant. In the event the actual total Project Costs, as certified by Participant and approved by Agency, are less than FIFTY-FIVE THOUSAND DOLLARS ($55,000.00), the balance of the Agency Loan shall be reduced by the same amount, and the Agency and Participant will cause a reduced Agency dote, Agency Deed of Trust and related instruments to be executed and recorded. 3.9 Environmental Issues. Prior to close of escrow, Agency will conduct an environmental review of the Site in accordance with the California Environmental Quality Act ("CEQA') and HUD regulations at 24 CFR, Part 58. Using these regulations as a guide, as in past projects, Agency will undoubtedly determine that the Project is "categorically exempt" under both CEQA and the National Environmental Policy Act of 1969 ("NEPA"), and therefore not subject to further, more complicated environmental assessment. Agency's environmental review, while thorough, should not be considered by Participant as exhaustive or as all-inclusive as, for example, a Phase I due diligence exercise. As a consequence, Participant agrees to indemnify, defend and hold harmless Agency, its officials, officers, employees and agents, from all claims, lawsuits, liabilities and costs (including but not limited to penalties, fines and monetary sanctions) arising from the storage of hazardous materials on the Site, or contamination of the Site (including but not limited to soils or groundwater contamination) from any cause or source. Participant further agrees to provide Agency with any notices, orders, reports, or directives concerning environmental matters that may affect the Site prior to the funding of the Agency Loan. ll SF-2000 Agree:OCCH:OPA 04 06:"00 SECTION 4. DEVELOPMENT OF THE SITE. 4.1 General. The Project shall consist of rehabilitation of an existing four-unit apartment building on the Site and the use of the Site as an affordable rental apartment complex in accordance with this Agreement and the Regulatory Agreement. 4.2 Construction of the Project. (a) Development in Accordance with Approved Project Plans and Permits. Participant shall undertake the Project and rehabilitate the Site in accordance with this Agreement, the Scope of Development, and the Approved Project Plans and Permits and any changes thereto as may be subsequently approved in writing by both Participant and Agency and, if necessary, City. As completed,the Project shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all Federal Housing Quality Standards as set forth at Section 982.401 of Title 24 of the Code of Federal Regulations. All Units must be rehabilitated no later than twenty-four(24) months from the close of escrow. This time period may be extended but only by written agreement of the parties, which agreement shall be deemed a modification of this Agreement. (b) Agency Approvals. Participant will furnish to the Agency a list of proposed repairs and improvements to the Site prior to submittal of plans to the City. The Agency will have the right to review and approve the list prior to the start of any rehabilitation work. Participant shall provide to Agency an executed construction contract with a contract price that is consistent with the Project Budget. Upon request, the construction contract, together with all other contracts for services necessary to construct the Project shall be submitted to the Agency for approval. The Agency shall approve the contracts if they are consistent with the Project Budget. Participant will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department,where applicable. (c) Evolution of Project Plans. On or before the date set forth in the Schedule of Performance, Participant shall submit to City, and shall use reasonable efforts to obtain approval of, the Approved Project Plans as may be required for the rehabilitation work, and Permits. including City approval of, preliminary, and thereafter final drawings and specifications for development of the Site in accordance with the Scope of Development, and all in accordance with the City's requirements. The term preliminary and final drawings shall be deemed to include site plans, building plans and elevations, grading plans, if applicable, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications as City and Agency customarily require for such a Project. Final drawings will be in sufficient detail to obtain a building permit. Said plans, drawings and specifications shall be consistent with the Scope of Development and the various development approvals referenced hereinabove, except as such items may be amended by City(if applicable) and by mutual consent of Agency and Participant. Participant shall not be in default of this Agreement due to any delay of Agency or City processing any plans or permit applications submitted by Participant. 12 SF-2000 Agree:OCCH:OPA 04 0G.00 (d) Other Governmental Permits. Participant shall, at its own expense and before commencement of construction or rehabilitation of any buildings, structures, or other work of improvement upon the Site, secure or cause to be secured any and all permits and approvals which may be required by any governmental agency affected by such construction, development, or work to be performed by Participant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under the California Environmental Quality Act ("CEQA"). In constructing and developing the Project, Participant shall comply with all applicable development standards in City's Municipal Code and shall comply with all building code, landscaping, signage, and parking requirements (except as may be permitted through approved variances and modifications). (e) Approval byAgency. The Agency shall approve or disapprove any submittal made by the Participant pursuant to this Agreement within ten (10) days after such submittal. Any disapproval shall state in writing the reason for the disapproval and the changes which the Agency requests to be made. After Participant resubmits the corrected submittal, Agency shall have an additional seven (7) days for the review of the resubmittal but if the Agency disapproves the resubmittal, then the cycle shall repeat, until the Agency's approval has been obtained. (f) Agency Assistance. So long as Participant is not in material default of any term or provision of this Agreement, Agency agrees to provide reasonable assistance to Participant, at no cost to Agency, in the processing of Participant's submittals required under this Agreement in order that Participant may obtain a final City action on such matters on or before the date set forth in the Schedule of Performance; provided that Agency does not warrant or represent that such approval shall be obtained. (g) Cost of Rehabilitation. Participant (with the assistance of the Agency Loan) shall bear all costs for the Project, including, but not limited to any and all costs for preparing or obtaining the Approved Plans and Permits, environmental remediation, interim and permanent financing, broker's and leasing commissions, and fees or charges for development and building, except as specifically provided herein. (h) Project Budget. Participant shall develop the Project in accordance with the Project Budget/Pro Forma attached hereto as Exhibit "J". (i} Project Schedule. Participant shall commence and complete the construction of the Project within the times set forth in the Schedule of Performance. (j} Pro e�esss Payments. Not later than thirty (30) days after commencement of construction, and every 30th day thereafter until the Project has been completed, Participant may submit a written request to Agency for a progress payment. Each request for a progress payment shall be accompanied by lien or partial lien releases from any contractors, subcontractors, materials suppliers, or equipment suppliers supplying work, materials or equipment to the Project. The FIFTY-FIVE THOUSAND DOLLARS (S55,000.00) left remaining from the amount of the Agency Loan (reference Section 3-2) shall be used by Agency to pay to Participant the latter's requests for progress payments. If Participant's request for a progress payment complies with the 13 SF-2000 Agree:OCCH:OPA 04/06100 requirements of this Section 4.26), Agency shall pay the same within ten (10) days after receipt of the request. 4.3 Insurance. Participant shall procure and maintain, during the term of this Agreement. at its sole cost and expense, until the date that Agency waives any such insurance requirement or requirements, as part of its issuance of the Release of Construction Covenants, the following policies of insurance: (a) Worker's Compensation Insurance. Pursuant to California Labor Code Section 1861, Participant acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for workers' compensation. Participant covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Site. Participant shall maintain such Workers' Compensation Insurance in an amount not less than ONE HUNDRED THOUSAND DOLLARS ($100,000) bodily injury, each occurrence, ONE HUNDRED THOUSAND DOLLARS ($100,000) bodily injury by disease, each employee, and TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) bodily injury by disease, policy limit, at all times incident thereto, in forms and underwritten by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Participant shall require all subcontractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Participant shall furnish Agency with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Participant shall similarly require all subcontractors to waive subrogation. (b) General Liability Insurance. Participant 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 ONE MILLION DOLLARS (S1,000,000.00), combined single limit. Such insurance shall also include automotive bodily injury and property damage liability insurance. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Such insurance shall name the City and Agency and their officers, agents, and employees acting in their official capacity, as additional insureds pursuant to a pre-1990 CG 20 10 11 85 endorsement form. In the event of aggregate coverage,—such limit shall be no less than ONE MILLION DOLLARS (S1,000,000.00). Participant shall require its insurer to waive its subrogation rights against Agency and shall provide certificates of insurance evidencing same. (c) PmpgLrt_ Insurance. Participant shall obtain and maintain in force, all- perils (to include fire, vandalism and earthquake protection) property insurance with extended coverage endorsements thereon, on the Site, in an amount equal to the full replacement costs and/or value thereof, this policy shall contain a replacement cost endorsement naming Agency as the insured and shall not contain a coinsurance penalty provision. The policy shall contain a special endorsement that such proceeds shall be used to repair or rebuild any Units or other improvements situated on the Site so damaged or destroyed; and if not so used, such proceeds shall be paid to Agency. The proceeds of any such insurance payable to Agency shall be used for rebuilding or repair as necessary to restore the site at the discretion of Agency. The policy shall name Agency and City, their officers, agents and employees acting in their official capacity as Additional Insureds. 14 SF-2000 Agree:OCCH:OPA 04/06/00 (d) Flood Insurance. If Agency learns or determines that the Site is situated within the a flood zone or flood plain as declared by any agency of the United States or the State of California, Participant shall obtain and maintain in force flood protection insurance in an amount not less than THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00), from either a federal or state agency created for the purpose of issuing such insurance, or from an insurance company admitted in California, or if not admitted in California then reasonably acceptable to Agency. Such insurance shall name the City and Agency and their officers, agents and employees acting in their official capacity, as additional insureds. (e) Certificates of Insurance_, Additional Insured Endorsements. Prior to performance of any work upon the Site, Participant shall furnish to Agency certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty(30) days prior written notice to Agency. 4.4 Indemnification. During any period of construction of any of the Project pursuant to this Agreement and until such time Agency issues or is required to issue the Release of Construction Covenants, Participant agrees to and shall protect, defend, indemnify and hold the Agency and City harmless from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of(i) Participant'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 Participant or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Participant shall not be responsible for, and the Agency shall protect, defend, hold harmless and indemnify Participant against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the active concurrent negligence, sole negligence or sole willful misconduct of the Agency or the City or their respective members, officers, officials, employees, agents,representatives, servants, or contractors. 4.5 Hazardous Substances. Participant, from and after the Close of Escrow, and until a transfer, sale, or assignment of the Site upon which the following covenant shall then be the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Agency and 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 Site or(ii)contamination of the Site by a release of hazardous materials. Participant,prior to the Closing Date, shall provide to Agency a copy of any notices, orders, or reports concerning the presence of any hazardous materials on or affecting the Site that is in Participant's possession. For the purposes of the foregoing, the term "hazardous materials" shall mean any hazardous or toxic substance, material or waste which, as of the date of Close of Escrow, is regulated by the State of 15 SF-2000 Agree:OCCH:OPA 0.3/06/00 California, or the United States Government, and including asbestos and any material containing asbestos. 4.6 Security Financing; Right of Holders. (a) Permitted Encumbrances. Participant, prior to the date Agency issues or is required to issue the Release of Construction Covenants, 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 acquisition of the Site and construction of the Project thereon without the consent of the Agency 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 Participant's obligations under this Agreement, including without limitation a pension fund, insurance company, or real estate investment trust. Conveyances for financing purposes not meeting the foregoing requirements shall be subject to the prior approval of the Agency's Executive Director,which approval shall not be unreasonably withheld. (b) Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion; nor shall any covenant or any provision in the Regulatory Agreement be construed to so obligate such holder. (c) Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders, Right to Cure. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant in completion of construction of the improvements, Agency shall at the same time deliver a copy of such notice or demand to each approved holder of record of any mortgage, deed of trust, or other security interest which has previously requested such notice in writing. Each such holder shall (insofar as the rights of Agency are concerned) have the right, at its option within ninety(90) days after the receipt of the notice, to commence and thereafter to diligently proceed to cure or remedy such default and add the cost thereof to the security interest debt and the lien on its security interest. Any holder completing the improvements in accordance with this Agreement shall be entitled to a Release of Construction Covenants upon written request made to Agency. 4.7 Release of Construction Covenants. Upon satisfactory completion of the Project, Agency shall issue to Participant a Release of Construction Covenants. The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of the Project required by this Agreement, and of full compliance with the terms of this Agreement relating to commencement and completion of the Project. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code Section 3093. If Agency refuses or fails to furnish a Release of Construction Covenants upon completion of the Project, Agency, after written request from Participant, shall, within fifteen (15) days of Participant's written request, provide Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain a detailed 16 SF-2000 Agree:OCCH:OPA 04i06.!00 description of the specific actions Participant must take to obtain a Release of Construction Covenants. If the Agency shall have failed to provide such written statement within fifteen (15) days. Participant shall be deemed entitled to the Release of Construction Covenants. If Agency refuses or fails to furnish the Release of Construction Covenants for the reason that specific items or materials are not available or landscaping is not complete, Agency shall issue the Release of Construction Covenants upon the posting by Participant with Agency of a cash deposit, bond or irrevocable letter of credit(in a form acceptable to Agency) in an amount representing the fair value of the work not yet completed. 4.8 Mechanics Liens Stop Notices and Notices of Com letion (a) If any claim of lien is filed against the Site or the Project, or a stop notice is served on any lender or other third party in connection with the Project, then the Participant shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the party entitled thereto a surety bond in sufficient form and amount, or provide other assurances satisfactory to the Agency that the claim of lien or stop notice will be paid or discharged. (b) If the Participant fails to discharge any lien, encumbrance, charge, or claim in the manner required in subsection (a) of this Section 4.8, then in addition to any other right or remedy, the Agency may (but shall be under no obligation to) require the Participant to immediately deposit with the Agency the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The Agency may use such deposit to satisfy any claim or lien that is adversely determined against the Participant. (c) The Participant shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project for a continuous period of thirty(30) days or more, and take all other reasonable steps to forestall the assertion of claims or liens against the Project. The Agency may (but has no obligation to) record any notices of completion or cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest in the Project. SECTION 5. USE OF THE SITE. 5.1 No Inconsistent Uses. Participant 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, Participant 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 provisions of the Regulatory Agreement shall prevail over this Agreement. 5.2 Regulatory Agreement. At the Close of Escrow the Regulatory Agreement shall be recorded against the Site in the priority set forth in the Section 3.4(d). 17 SF-2000 Agree:OCCH:OPA 04/06100 5.3 Relocation. (a) Relocation Plan. As the Project is a "rehabilitation-in-place," no relocation of tenants living on the Site as of the Effective Date of this Agreement is contemplated by the parties hereto or is required to occur as a result of this Agreement. In the event, however, that off-Site relocation of existing tenants becomes necessary as a result of the Project, Participant,prior to such off-Site relocation, shall submit a relocation plan to Agency for review and approval ('Relocation Plan"). The Relocation Plan shall include the name, gender, age, ethnicity, household income, and amount of relocation payment to be paid; provided, however, that Participant 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. Participant shall be obligated to meet the tenant notice requirements of applicable relocation law and shall provide the Agency with true and correct copies of such notices to tenants. Participant shall also retain all required records and the originals and/or copies of tenant notices in its files as mandated by applicable law. (b) Relocation Cost. Participant shall be obligated for the payment of all relocation benefits and costs identified in the Relocation Plan, as well as relocation benefits and costs that arise from the acquisition or rehabilitation of the Site beyond those obligations identified in the Relocation Plan. Participant shall indemnify, defend, and hold harmless the Agency from and against any claims for relocation and the payment of relocation benefits that are the obligations of Participant under this Agreement. Notwithstanding the above, Agency shall provide relocated tenants Section 8 HUD housing certificates, which Participant may use to offset its relocation obligations. 5.4 Maintenance of the Site. All Units must meet Federal Housing Quality Standards (24 CFR § 982.401)while occupied. Further, Participant shall maintain the Site in accordance with the terms of the Regulatory Agreement. 5.5 Nondiscrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, 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. 5.6 Form of Nondiscrimination and Nonsegregation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status 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, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of 18 SF-2000 Agree:OCCH:OFA 04/06/00 race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, 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 land herein leased." (c) In Contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him,establish or permit any such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 5.7 Effect and Duration of Covenants. The Participant 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 thirty (30) years, from the Effective Date of this Agreement, except that the covenants against discrimination set forth in Sections 5.5 and 5.6 shall remain in effect in perpetuity. 5.8 Creation of Capital Reserve and Residual Receipts Accounts. No later than thirty (30) days after the close of escrow, Participant shall create two separate accounts: a Capital Reserve Account; and a Residual Receipts Account. The purposes of each account are set forth in Sections 5.9 and 5.10. No later than thirty (30) days after each account has been created, Participant shall provide to Agency a pro forma statement concerning each account, for Agency's review and approval. At any time thereafter during the term of this Agreement, Agency, on ten(10) days prior written notice to Participant, may request that Participant submit to it updated, revised Capital Reserve Account and/or Residual Receipts Account statements. Agency, at its own expense, may audit any updated, revised Capital Reserve Account and/or Residual Receipts Account statements submitted to it by Participant. 5.9 Capital Reserves; Agency Loan Repayment. Commencing on April 17, 2003, and every succeeding year during the term of this Agreement, Participant shall deposit ONE THOUSAND TWO HUNDRED DOLLARS ($1,200.00) or fifty percent of Net Operating Income 19 SF-2000 Agree-OCCH:OPA 0 3/06/00 for the previous one-year period (whichever is more) into a reserve for capital repairs. Should Participant believe Project revenues to be insufficient to permit Participant to make such a full deposit in any year, Participant may appeal to the Agency to have the payment reduced, suspended, renegotiated, or forgiven. Participant shall carry the burden of proof in this regard. Agency shall have the unfettered discretion to reduce, suspend, renegotiate, or forgive the payment based on the evidence submitted by Participant. 5.10 Payment of Portion of Residual Receipts. (a) Payment to Agency. Commencing on April 17, 2003, and every succeeding year during the term of this Agreement, Participant shall pay to the Agency ONE THOUSAND TWO HUNDRED DOLLARS (SI,200.00) or fifty percent (50%) of Net Operating Income for the previous one-year period (whichever is more) for repayment of the Agency Note. Should Participant believe the Project revenues be insufficient to permit Participant to make such a payment in any year, Participant may appeal to the Agency to have the payment reduced, suspended, renegotiated, or forgiven. Participant shall carry the burden of proof in this regard. Agency shall have the unfettered discretion to reduce, suspend, renegotiate, or forgive the payment based on the evidence submitted by the Participant. Once the Capital Reserve Account reaches the cumulative total determined to be adequate by Agency and Participant, Participant shall pay to Agency TWO THOUSAND FOUR HUNDRED DOLLARS (S2,400.00) or one hundred percent (100%) of the Net Operating Income for the previous calendar year (whichever is more). If a payment is required by Participant pursuant to the terms hereof, Participant shall make such payment no later than ninety (90) days following the end of the reporting year (calendar year or fiscal year). If the first or final payment is based on a portion of a year, the payment shall be pro rats based on a 360-day year. (b) Definition of Net Operating Income. As used herein, the term "Net Operating Income" shall mean, for any reporting period (calendar year or fiscal year), (a) all income derived by Participant from the Site, including without limitation all tenant rent, less(i)payments of principal and interest, if any, required to be paid in such year by Participant with respect to any note, mortgage, or deed of trust with respect to the Site or Project, (ii) all expenses actually incurred(or to be incurred if accounted for on an accrual basis) by Participant in leasing, managing, operating, maintaining, and repairing the Site, (iii) all capital expenses incurred pertaining to the Site; (iv) the deposits into the Capital Reserve Account; and (v) property management fees, administrative costs, salaries, benefits, overhead costs, and such other and further operating and management expenses incurred in operating the Site. Depreciation expenses shall not be a reduction against Net Operating Income. 5.11 Financial Statements. Participant shall submit to Agency, on a yearly basis, a true and correct copy of Participant's audited financial statements for the Project. Before such statements are submitted to Agency, they should (but are not required to) be reviewed and certified by Participant's Board of Directors. After receipt of Participant's audited financial statements for the Project, Agency may, at its cost, request additional financial analyses or obtain a third party review of Participant's financial statements for the Project to verify the accuracy of Participant's payments made to the Agency pursuant to Section 5.10 or the deposits by Participant into the Capital Reserve Account pursuant to Section 5.9. 20 SF-2000 Agree:OCCH:OPA 04i06/00 5.12 Operation of Project. Borrower shall lease, operate and manage the Project in full conformance with the terms of the OPA and specifically the Regulatory Agreement. Further, all of the Units in the Project shall be designated as HOME Units and the rents for these units shall not exceed the "low income" rent defined by the HOME Program, as set forth at Section 92.252 of Title 24 of the Code of Federal Regulations. As stated in Section 3.5(b), prior to close of Escrow, for the purposes of operating and managing the Project, Participant, subject to the Agency's review and approval, shall have contributed THIRTY THOUSAND DOLLARS (S30,000.00) in equity cash, or rehabilitation labor with a reasonable value of THIRTY THOUSAND DOLLARS ($30,000.00), or strictly defined and quantifiable services with a reasonable value of THIRTY THOUSAND DOLLARS ($30,000.00). Not later than sixty (60) days after close of Escrow, Participant shall submit to Agency, for Agency's review and approval, an annual budget outlining each proposed service to be offered by Participant in operating and managing the Project, and the anticipated cost of each such service. The first such proposed budget shall cover the period from the close of Escrow to the beginning of the second year of the term of this Agreement. Not later than sixty (60) days after the beginning of the second year of the term of this Agreement, and for every year thereafter during this Agreement's term, Participant shall submit an annual, proposed budget to Agency, for the latter's review and approval. 5.13 Lead-Based Paint. Borrower shall ensure that it and its contractors and subcontractors shall not use lead-based paint in the construction or maintenance of the Property. Borrower shall insert his provision in all contracts and subcontracts for work performed on the Project which involve the application of plaint. Borrower will test both properties for the presence of lead-based paint as required by HUD regulations. Borrower will furnish copies of test results to Lender. Borrower will remediate any asbestos or lead-based paint hazards where the level of that substance is found to be in excess of acceptable thresholds. 5.14 Barriers to the Disabled. Borrower shall ensure that the Project shall be developed and the Property shall be maintained to comply with all applicable federal state, and local requirements for access for disabled persons. SECTION 6. DEFAULTS AND REMEDIES. 6.1 Participant Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Participant hereunder if, after receiving written notice from Agency as provided in Section 6.3 below identifying such event, Participant 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, Participant commences to cure said event within thirty(30) days and diligently and in good faith continues to cure the event of default: (a) Participant 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) Participant fails to observe or perform any material term of this Agreement or any agreement incorporated hereunder by reference including, but not limited to, the 21 5F-2000 Agree:OCCH:OPA 0410(w00 Regulatory Agreement, the Note,the 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 (c) Participant knowingly and intentionally makes or delivers to Agency any statement, report, or certificate that is not true or correct in any material respect. 6.2 Agency Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Agency hereunder if, after receiving written notice from Participant as provided in Section 6.3 below identifying such event, Agency fails to cure said event within thirty(30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, Agency commences to cure said event within thirty(30) days and diligently and in good faith continues to cure the event of default: (a) Agency fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit into Escrow of the required portion of Agency Loan funds; or (b) Agency knowingly and intentionally makes or delivers to Participant any statement, report, or certificate that is not true or correct in any material respect. 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 either 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 either party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.4 Agency's Remedies. (a) The Agency, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any material default that the Participant 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 Participant 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 Agency's sole remedy shall be to foreclose on the Agency Deed of Trust pursuant to Agency's right and remedies thereunder. 6.5 Participant's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default or breach of this Agreement by Agency, Participant may bring an action for specific performance of this Agreement or any term or provision hereof, or may terminate this Agreement. Participant 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 22 SF-2000 Agree-OCCH:OPA 04/06/00 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 Participant's Warranties. Participant represents and warrants (1)that it has access to professional advice and support to the extent necessary to enable Participant to fully comply with the terms of this Agreement; (2) that it is duly organized, validly existing and in good standing under the laws of the State of California; (3)that it has the full power and authority to undertake the Project and to execute this Agreement; (4) that the persons executing and delivery this Agreement are authorized to execute and deliver such documents on behalf of Participant; (5) except as disclosed to the Agency in writing, there are no actions or proceedings pending or, to the best of the Participant's knowledge, threatened against the Participant before any court or administrative agency in any way connected with the Site or the Project which could adversely affect the Participant'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 Participant is a party or which affects the Project or any part thereof; (7) the Participant 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 Participant has not entered into any agreements which will adversely affect the title to the Project or the Participant's right to develop and use the Project as provided in this Agreement, and the Participant will not enter into any such agreements after the date hereof. 7.2 Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 7.3 Attorneys' Fees. In the event of litigation between the parties arising out of this Agreement each party shall bear its own attorneys' fees, and other costs. 7.4 Notices, Demands, and Communications Behveen the Parties. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if: (1) 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 Participant: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City,CA 92655 Attn: Jim Miller,President/CEO 23 SF-2000 Agree:OCM OPA 04;0600 If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director Notices personally delivered or delivered by courier shall be effective shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of(1) 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 Participant against Agency, service of process on Agency shall be made by personal service upon Executive Director or the Secretary of Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Participant, service of process on Participant shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California. 7.6 Conflicts of Interest. No member, official, or employee of Agency 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, including but not limited to that certain "Deal Point Memorandum" approved by Participant and the Agency and/or City Council of the City of Huntington Beach, are merged herein and shall be of no further force or effect. 7.11 No Third Parties Benefited. Other than the general and limited partners of Participant, this Agreement shall create no third-parry 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. 24 SF-2000 AgmOCCH:OPA 04/06/00 7.12 Assurances to Act in Good Faith. Participant and Agency each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the redevelopment of the Site in accordance with the provisions hereof. 7.13 Warranty Against Pawnent of Consideration for A eement. Except as provided in this Agreement, Participant 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 Agency Officials and Em to ees. No member, official, or employee of the Agency shall be personally liable to the Participant or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Participant or to its successor,or on any obligations under the terms of this Agreement. 7.15 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either 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 Ageement 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 either 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 parry delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. In addition, the Executive Director shall have the authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of one(1) year. 7.19 Inspection of Books and Records. The Agency or its designee has the right at all reasonable times to inspect the books, records, and/or other documents of the Participant pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement. 25 SF-2000 Agree:OCCH:OPA O '06.'00 7.20 Waivers. The waiver by Agency or Participant of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. SECTION S. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE This Agreement consists of twenty-seven (27) pages and ten (10) attachments which constitute the entire understanding and agreement of the parties. This Agreement does not take effect until executed by the Participant and Agency. This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Participant, or this Agreement may be terminated by the Participant on written notice to the Agency. The Agency Executive Director is hereby authorized and directed to take such other and further actions, and sign such other and further agreements and documents on behalf of the Agency as may be necessary or proper to effect the terms of the Owner Participation Agreement on behalf of the Agency. [end - signature page follows] 26 SF-2000 Agree:OCCH:OPA 0 !06/00 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By Chairman ATTEST APPROVED AS TO FORM By -- By Agency Clerk - V161 j Agency Counsel S Lk3 4-16,0 0 "PARTICIPANT" SHELTER FOR THE HOMELESS, INC , dba, AMERICAN LODGING, a California nonprofit corporation By Q4AgaO�2 dy lCampVnii xecutive Director AND By i er President/CEO 27 SF-2000 Agree OCCH OPA 04/06/00 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY COMMONLY KNOWN AS 7802 BARTON DRIVE, HUNTINGTON BEACH, CALIFORNIA Lot 33 of Tract No. 4301, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 177 Pages 11 and 12, of said Miscellaneous Maps, in the Office of the Countv Recorder in said County. Except therefrom all oil, gas, minerals and other hydrocarbon substances lying below a depth of 150 feet from the surface of said property, but Nkith no right of surface entry, as provided in deed of records. Also except the subsurface water rights, but without the right of entry to the surface or the subsurface above a depth of 150 feet as dedicated on the map of said tract. EXHIBIT "B" SITE MAP CITY OF HUNTINGTON BEACH ORANGE COUNTY, CALIFORNIA /mram� USE OF PROPERTY MAP WAMER Av[ CF-E ' tF1 . I I v s CF-E ! I f • t: f CF-C Af= I 1 7 C C F-R IMIMMI - i I � a O P � d o �6 z a o ! � x 'h t� TALOERT AVE .�o*E CITY 4F . � �,� :IMO uh e1wc� cen,...c� .a m LEG EHU:•• �. �d E NCH - HL� 'T TIN GTO�° B - ORA\•GF. COUNTY. CALIFORNIA 45 W]4M1EG J ..�r...a k'.E P2 op Hi r:+r �irrtij I�-f� R R2 fqp�,- i > CF-R --!r+=_° -�r.-_7-7, RI f 4 �• h M I M i na R3 1�J _C I Ra i t RI-W •; RI-CD I`E R ft-f.D 1J "!e 1—cz) I�R7 I-Cp�� � q!__ ILi�J yl �JL l =P { i mi . _ c.�: M i I In, f l . {I F�f S ill i Atl R.2 r-R i Mr M I U RR2 C4 R2 i ! P2 1 I f mi Go �. Mi nar I I ,,,.t Y .L EXHIBIT "C" SCOPE OF DEVELOPMENT Participant's rehabilitation of an existing four-unit apartment building located at 7802 Barton Lane in the City of Huntington Beach shall be undertaken as follows: l. The rehabilitation shall be in substantial conformance with the Approved Plans and Permits. In the event of any conflict between the description of the Project and rehabilitation work described in this Agreement and in the Approved Plans and Permits, the Approved Plans and Permits shall control. Notwithstanding the above, the rehabilitation of the Units shall result in Units meeting, at a minimum, federal housing quality standards as existing on the Effective Date of this Agreement; said standards are set forth at Title 24 of the Code of Federal Regulations, Section 982.401. Participant shall provide Agency with copies of all required permits under the City Municipal Code and proofs of City inspections. 2. Participant, prior to undertaking any work of rehabilitation on the Site (other than repairs immediately needed for habitability or removal of waste, debris, and general clean-up) shall submit to Agency for review a rehabilitation work list that describes the nature and order of the rehabilitation work. 3. Participant shall be responsible for testing and detecting the presence of asbestos and lead-based paint as required by HUD regulations or any applicable law. Participant shall also be responsible for remediating any asbestos and any lead-based paint where the levels of those substances are found to be in violation of HUD regulations or any applicable law. If Participant feels that remediation of asbestos and/or lead-based paint are too costly, it may request financial assistance from Agency. The decision to provide financial assistance, and the amount of such assistance, lie in the sole discretion of Agency. Copies of all test results, tenant notifications, and remediation plans shall be provided to the Agency or its authorized representatives or consultants. 4. Agency shall have the right to independently inspect the progress of the rehabilitation work, including both interiors and exteriors of the Units, upon forty-eight (48) hours prior notice to Participant: provided that such inspections shall not interfere with Participant's rehabilitation work. In this regard, Participant shall provide access to the Units to Agency 5. Subject to Section 4.2(a) and Exhibit D of the OPA, Participant shall complete the rehabilitation work within twenty-four(24) months after the Closing Date; unless this time period is extended by the mutual written agreement of the parties. Exhibit"C" Page L of 1 SF-2000 Agree:OCCH:Scope of Development EXHIBIT "D" SCHEDULE OF PERFORMANCE ITEM OF PERFORINIANCE TIME FOR PERFORNLAINCE REFERENCE 1. Participant and Agency each execute all documents Not later than twelve noon on the §3.4(b); §3.4(c). and deposit all documents and funds into Escrow as business day immediately prior to the required by this Agreement. scheduled Closing Date. 2. CIosina Date. Not later than April 30,2000 §3.4(a). 3. Participant obtains the Approved Plans and Permits Within sixty(60)days after the §4.2(a)-(e) for the Project and commences the rehabilitation Closing Date. work on the Site. 4. Participant submits a 14anagement Plan to the Within sixty(60)days after the §4.4 of Exhibit 1 Agency. Closing Date. 5. Participants completes the rehabilitation of the Site. Within twenty-four(24)months after §4 2(i). commencement of the work. 6. Agency issues Release of Construction Covenants. Upon completion by Participant of the §4.7 rehabilitation work on the Site. 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 both the Participant and the Agency. The Executive Director of Agency shall have the authority to approve extensions of time without action of the Board of Directors of Agency not to exceed a cumulative total of one (1)year. Exhibit "D" Page I of 1 SF-2000 Agree:OCCH:Schedule of Performance 02/16100--4l EXHIBIT "E" RELEASE OF CONSTRUCTION COVENANTS (SEE ATTACHED) WHEN RECORDED RETURN TO: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City, CA 92655 Attn: Executive Director (Space Above This Line For Recorder's Office Use Only) (Exempt from Recording Fee Per Gov.Code Sec.6103 -See Below) This Release of Construction Covenants is recorded at the request and for the benefit of the Redevelopment Agency of the City of Huntington Beach and is exempt from the payment of the recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Its: Dated: RELEASE OF CONSTRUCTION COVENANTS WHEREAS, SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation, ("Owner"), is the owner of the fee interest in that certain real property more particularly described in the legal description attached hereto as Exhibit No. 1 and incorporated herein(the "Site"); and WHEREAS, by an Owner Participation Agreement (hereinafter referred to as the "Agreement") dated as of , 2000, by and between Owner and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (hereinafter referred to as "Agency"), Owner has constructed the improvements on the Site according to the terms and conditions of said Agreement; and Exhibit"E"—Release of Construction Covenants Page 1 of 5 SF:2000 Agree:OCCH:Release of Const.Covenants WHEREAS, pursuant to the Agreement,promptly after completion of all construction work by Owner upon the Site, Agency shall furnish Owner with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Orange; and WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be conclusive evidence that Owner has complied with the terms of the Agreement pertaining to the construction of improvements on the Site; and WHEREAS, Agency has conclusively determined that the construction of improvements on the Site has been satisfactorily completed as required by the Agreement; and NOW, THEREFORE: I. As provided in the Agreement, Agency does hereby certify that construction of the improvements on the Site have been fully and satisfactorily performed and completed, and that such development is in full compliance with said Agreement. 2. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. Nothing contained herein shall modify in any way any other provision of said Agreement. 3. This Release is not a Notice of Completion as referred to in California Civil Code Section 3093. IN WITNESS WHEREOF, Agency has executed this Release as of this day of 32000. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Its: ATTEST: Agency Clerk Exhibit `'E"—Release of Construction Covenants Page 2 of 5 CONSENT TO RECORDATION SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGLNI G, a California nonprofit corporation, owner of the fee interest in the Site legally described in Exhibit No. 1 attached hereto does hereby consent to the recordation of the foregoing Release of Construction Covenants against the Site. "OW;\TER" SHELTER FOR THE HOMELESS, LNC., dba AMERICAN LODGLNG, a California nonprofit corporation By: Judy Kampmann Executive Director AND By: Jim Miller President/CEO Exhibit"E"—Release of Construction Covenants Page 3 of 5 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s),or the entity upon behalf of which the person(s)acted, executed the instrument. WITNESS my hand and official seal. Notary Public (SEAL) STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANIGE ) On before me, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument-the person(s), or the entity upon behalf of which the person(s)acted,executed the instrument. WITNESS my hand and official seal. Notary Public (SEAL) Exhibit"E"—Release of Construction Covenants Page 4 of 5 EXHIBIT NO. 1 LEGAL. DESCRIPTION OF SITE Property Commonly Knows as 7802 Barton Drive,Huntington Beach, California Lot 33 of Tract 4301, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 177 Pages 11 and 12, of said Miscellaneous Maps, in the Office of the County Recorder in said County. Except therefrom all oil gas, minerals and other hydrocarbon substances lying below a depth of 150 feet from the surface of said property, but with no right of surface entry, as provided in deed of records. Also except the subsurface water rights, but without the right of entry to the surface or the subsurface above a depth of 150 feet as dedicated on the map of said tract. Exhibit "E"—Release of Construction Covenants Page 5 of 5 EXHIBIT "F" PROMISSORY NOTE (SEE ATTACHED) PROMISSORY NOTE SECURED BY DEED OF TRUST WITH ASSIGNMENT OF RENTS ANNID 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: S350,000.00 Note Date: 12000 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of THREE HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS (S350,000.00), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof, pursuant to an Owner Participation Agreement (the "OPA") dated as of April 27, 2000 between Maker and Holder. 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 OPA and the Deed of Trust and Assignment of Rents dated April 17, 2000, executed by the Maker and recorded in the Recorder's Office of Orange County, California, on , as Document No. (the "Trust Deed"). The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public records on file in the offices of the Holder. 1. Agency Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan") to finance the development of the Site pursuant to the OPA. 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 OPA. 2. Payment of Obligation- Unless an uncured Material Default of Maker shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPQ, or Maker has breached any promise or obligation in this Note, (1) no interest shall accrue on the unpaid principal of this Note; and (ii) a prorated portion of the total principal advanced hereunder shall be forgiven, waived, and discharged on each anniversary date of Vote Date set forth above in an amount equal to the total principal advanced hereunder divided by thirty(30), i.e., one- Exhibit 7" - Promissory Note Pagel of 3 SF-2000 Agree:QCCH:Promissory[vote thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date. Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default of Maker under the Deed of Trust, OPA, or Regulatory Agreement. Unless such uncured Material Default of Maker has occurred, Holder does not intend for Maker to make any principal payments or interest of any kind on this Note. Notwithstanding the above, commencing on April 17, 2003 and every succeeding anniversary, Participant shall pay Maker One Thousand Two Hundred Dollars (31,200.00) or fifty percent of Net Operating Income for the previous calendar year(whichever is more). Further, once the capital reserve is fully funded as determined pursuant to Section 5.9(a)of the OPA, Participant's annual payments to Maker shall be Two Thousand Four Hundred Dollars ($2,400.00) or 100% of Net Operating Income(whichever is more)- Net Operating Income shall have the same meaning as that term is defined in the OPA. Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust. 3. No Prepayment. This Note may not be prepaid. 4. Acceleration of Obligation. Upon the occurrence of a uncured Material Default of Maker under this Note, the Deed of Trust or any obligation secured thereby (including the obligations in the OPA 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, and upon thirty (30) days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section 1 above, 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 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. Exhibit "F" - Promissory Note Page 2 of 3 SF-2000 Agree:OCCH:Promissory Note 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. Usu . Notwithstanding any provision in this Note, 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. GoveminQ Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. "PARTICIPANT" SHELTER FOR THE HOMELESS, INTC., dba AMERICAN LODGING, a California nonprofit corporation By: Judy Kampmann Executive Director AND By: Jim Miller President/CEO Exhibit "F" _ Promissory Note Page 3 of 3 SF-2000 Agree:OCCH:Promissory Note EXHIBIT "I" PROJECT BUDGET/PRO FORMA MONTH A Rent $550/month $2,200 $26,400 Less Vacancy _ $200 $2,400 Net Rental Income $2,000 $24,000 Management Fees $200 $2,40 Carpet Re air $50 $600 Landscaping $75 $900 Maintenance & Repair $225 $2,700 Insurance $50 $600 Utilities — Electric $80 $960 Utilities — Gas $50 $600 Utilities — Sanitation $200 $2,400 Depreciation $640 $7680 Total Operating Expense $1570 $18,840 Corporate Management $250 $3,000 Reserves 10% $180 $2,160 Total Other Expenses $430 $5,160 Total Income $2,000 $24,000 Total Expenses $2,000 $24,000 Balance $0 $0 EXHIBIT "G" DEED OF TRUST (SEE ATTACHED) ThA document was electronically recorded by CALIFORNIA COUNTIES TITLE CO. California Counties Title Company Recorded in Official Records,County of Orange No fee: Recording requested pursuant 'LE CO. Ga L. Granville, Clerk-Recorder to Government Code Section 27383 I II�II II�II Il�jl III NO F E E Recording Requested By, and pursuant When Recorded, Return to: 127393 1034 20000225131 02:49pm 05/01/00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Redevelopment Agency of the Agency of Huntington Beach ;e 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Manager rq (space above this line for Recorder's use only) M DEED OF TRUST -0 With Assignment of Rents THIS DEED OF TRUST, is made this 'Ll"day of Ap,r:l , 20v0 , by and between Shelter for the Homeless, Inc., dba American Lodging, a California nonprofit corporation (the "Borrower"), as trustor, Apex Escrow Company("Trustee"), and the Redevelopment Agency of the Agency of Huntington Beach, (the "Agency"), a public body, corporate and politic, as beneficiary. RECITALS A. For value received, the Borrower has executed and delivered to Agency a promissory note (the "HOME Note"), evidencing a loan of Home Investment Partnership Program funds ("HOME Funds") in the amount of Three Hundred Fifty Thousand Dollars (S350,000.00) (the "Loan Note") of even date herewith and payable to the Agency, and the Borrower has agreed to execute and deliver to Agency a Deed of Trust respecting the Project as security for the repayment of the Loan. B. All capitalized terms used herein unless otherwise defined, shall have the respective meaning specified in the Owner Participation Agreement dated April 17, 2000, between the 06 Borrower and Agency(the "OPA"). AGREEMENT 1. GRANT. The Borrower, in consideration of the Loan, and in order to secure repayment of(i) all indebtedness evidenced by the HOME Note with interest, according to its terms, and (ii) payment of taxes and assessments, does hereby irrevocably grant, transfer, assign and pledge to Trustee in trust, with power of sate and right of entry and possession as provided below, all of its present and future estate, right, title and interest in and to the following described property(collectively the "Security"): RECEIVED MAY 0 8 2000 1 SF-2000 agree:OCCH=Trust Deed DEPARTMENT OF ECONOMIC DEVELOPMENT i - a. All of the Borrower's right, title and interest in the land described in Exhibit A, attached hereto, and incorporated herein by reference; and b. All present and future structures, buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including, but not limited to, all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors,bath tubs, sinks, water closets, basins,pipes, faucets and other plumbing and heating fixtures, mantels, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and C. All appurtenances of the Project and all rights of the Borrower in and to any streets, roads or public places, easements or rights of way, relating to the Project, and d. All the rents, issues, and profits thereof, subject, however, to the right, power, and authority hereinafter given to, and conferred upon, Agency to collect and apply such rents, issues, and profits; and e. All building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and f. All proceeds, including insurance proceeds, and claims arising on account of any damage to or taking of the Security and all causes of action and recoveries for any Ioss or diminution in value of the Project; the Borrower also grants to Agency a security interest in: (1) All general intangibles relating to the development or use of the Project, including, but not limited to, all governmental permits relating to construction on the Project, at names under or by which the Project or any of the improvements may at any time be operated or known and all rights to carry on business under any such names or any variant thereof, and all trademarks and goodwill in any way relating to the Project, and the proceeds, including insurance proceeds, of all of the foregoing; and (2) All plans and specifications prepared for construction of improvements on the Project and all studies, data and drawvings related thereto; and also all contracts and agreements of the Borrower relating to the aforesaid plans and specifications or to the aforesaid studies, data and drawings or to the construction of improvements on the Project, and the proceeds, including insurance proceeds, of all of the foregoing. 2 SF-2000 Agree:OCCH:Trust Deed 2. OBLIGATIONS SECURED. The Borrower makes this grant for the purpose of securing the following obligations: A. Repayment of the indebtedness of the Borrower to Agency of the Loan, in accordance with the terms of the HOME Note or as much as has been disbursed to the Borrower under the HOME Note and the OPA, along with any extensions, amendments, modifications, or renewals to the HOME Note; and B. Payment of any sums advanced by Agency to protect the security and priority of this Deed of Trust; and C. Payment of any sums advanced by Agency following a breach of the Borrower's obligation to advance said sums and the expiration of any applicable cure period, with interest thereon as provided herein; and D. Performance of every obligation, covenant or agreement of the Borrower contained in this Deed of Trust, the Note, the OPA, and the Agreement containing covenants, including all modifications, extensions and renewals of these obligations; and E. Performance of any other obligation or repayment of any other indebtedness of the Borrower to Agency, where such evidence of obligation or indebtedness specifically recites that it is secured by this Deed of Trust. 3. ASSIGNMENT OF RENTS AND RIGHT TO POSSESSION. As additional security, the Borrower hereby assigns to Agency: (a) all of the rents, revenues, profits, and income from the Security, any deposits now or hereafter in the Borrower's possession which have been collected with respect to the Security, and any reserve or capital funds now or hereafter held by the Borrower with respect to construction or operation of the Security(collectively, the "Rents"); and (b) the right to enter, take possession of and manage the Security; provided however that the Borrower shall have, before an Event of Default, the exclusive right to possess the Security and.to collect Rents and use them in accordance with the Loan Documents. This assignment is intended to be an absolute and present transfer of the Borrower's interest in existing and future Rents, effective as of the date of this Deed of Trust. 4. ENFORCEMENT. Upon the happening of an Event of Default which is not cured within the cure period as set forth in the OPA and written notice to the Borrower, Agency may, in addition to other rights and remedies permitted by the OPA, this Deed of Trust, or applicable law, (a) enter upon, take possession of, and manage the Security, either in person as a mortgagee- in-possession, by agent, or by a receiver appointed by a court, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Security, (b) collect all Rents, including those past due and unpaid, and apply the same to pay for the costs and expenses of operation of the Security, including attorneys' fees, and pay off any indebtedness secured by this Deed of Trust, all in such order as Agency may determine, and/or(c) enter upon and take possession of the Security, and complete construction of any improvements on the 3 SF-2000 Agree:OCCH:Trust Deed 3 � Security as provided for in the Plans and Specifications approved under the OPA or any modifications to the Plans and Specifications or the Project that Agency in its sole discretion believes is appropriate. Agency may make, cancel, enforce, and modify leases and rental agreements, obtain and evict tenants, set and modify rent terms, sue for rents due, enter into, modify, or terminate any contracts or agreements, or take any legal action, as it deems necessary with respect to the Rents or to development or operation of the Security. 5. APPOINTMENT OF A RECEIVER. In any action to enforce this assignment, Agency may apply for the appointment of a receiver to take possession of the Security and take whatever measures are necessary to preserve and manage the Security for the benefit of Agency and the public interest. The Borrower hereby consents to the appointment of a receiver. The receiver shall have all of the authority over the Security that Agency would have if Agency took possession of the Security under this assignment as a mortgagee-in-possession, including the right to collect and apply Rents and the right to complete construction of improvements. 6. NO WAIVER OF POWER OF SALE. The entering upon and taking possession of the Security and the collection of Rents shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or notice of default and, notwithstanding the continuance in possession of the Security or the collection and application of Rents, Agency shall be entitled to exercise every right provided for in this Deed of Trust or by law upon occurrence of any Event of Default, including the right to exercise the power of sale. COMMERCIAL CODE SECURITY AGREEMENT 7. GRANT. This Deed of Trust is intended to be a security agreement and financing statement pursuant to the California Commercial Code for any of the items specified above as part of the Security which under applicable law may be subject to a security interest pursuant to the Commercial Code, and the Borrower hereby grants Agency a security interest in said items. Agency may file a copy of this Deed of Trust in the real estate records or other appropriate index as a financing statement for any of the items specified as part of the Security. The Borrower shall execute and deliver to Agency at Agency's request any financing statements, as well as extensions, renewals, and amendments thereof, and copies of this instrument in such form as Agency may require to perfect a security interest with respect to said items. The Borrower shall pay all costs of filing such financing statements and shall pay all reasonable costs of any record searches for financing statements and releases. Without the prior written consent of Agency, the Borrower shall not create or permit any other security interest in said items. S. REMEDIES. Upon the Borrower's breach of any obligation or agreement in the Loan Documents, Agency shall have the remedies of a secured party under the Commercial Code and at Agency's option may also invoke the remedies provided for elsewhere in this Deed of Trust with respect to said items. Agency may proceed against the items of real property and personal property specified above separately or together and in any order whatsoever. 4 SF-2000 Aeree:OCCH:Trust Deed RIGHTS AND OBLIGATIONS OF TRUSTOR 9. PERFORMANCE OF SECURED OBLIGATION. The Borrower shall promptly perform each obligation secured by this Deed of Trust. 10. PAYMENT OF PRINCIPAL AND INTEREST. The Borrower shall promptly pav when due the principal and interest on the indebtedness evidenced by the HOME Note. 11. MAINTEI\ANCE OF THE SECURITY. The Borrower shall, at the Borrower's oven expense, maintain and preserve the Security or cause the Security to be maintained and preserved in good condition, in good repair, and in a decent, safe, sanitary, habitable and tenantable condition. The Borrower shall not cause or permit any violations of any laws, ordinances, regulations, covenants, conditions, restrictions, or equitable servitudes as they pertain to improvements, alterations,maintenance or demolition on the Security. The Borrower shall not commit or permit waste on or to the Security. The Borrower shall not abandon the Security. Agency shall have no responsibility over maintenance of the Security. In the event the Borrower fails to maintain the Security in accordance with the standards in this Deed of Trust, or the OPA, Agency, after at least sixty(60) days, except in health and safety emergencies, in which case, after at least three (3) days prior written notice to the Borrower, may, but shall be under no obligation to, make such repairs or replacements as are necessary and provide for payment thereof. Any amount so advanced by Agency, together with interest thereon from the date of such advance at the same rate of indebtedness as specified in the Note(unless payment of such an interest rate would be contrary to applicable law, in which event such sums shall bear interest at the highest rate then allowed by applicable law), shall become an additional obligation of the Borrower to Agency and shall be secured by this Deed of Trust. 12. INSPECTION OF THE SECURITY. The Borrower shall permit Agency to enter and inspect the Security for compliance with these obligations upon 24 hours advance notice of such visit by Agency to the Borrower or the Borrower's management agent. 13. DEFENSE AND :NOTICE OF CLAIMS AND ACTIONS. The Borrower shall appear in and defend, at its own expense, any action or proceeding purporting to affect the Security and/or the rights of Agency. The Borrower shall give Agency and Trustee prompt notice in writing of the assertion of any claim, of the filing of any action or proceeding and of any condemnation offer or action with respect to the Security. 14. SUITS TO PROTECT THE SECURITY. Agency shall have power to institute and maintain such suits and proceedings as it may deem expedient (a) to prevent any impairment of the Security or the rights of Agency, (b) to preserve or protect its interest in the Security and in the Rents, and (c) to restrain the enforcement of or compliance with any governmental legislation, regulation, or order, if the enforcement of or compliance with such legislation, regulation, or order would impair the Security or be prejudicial to the interest of Agency. 15. DAMAGE TO SECURITY. The Borrower shall give Agency and Trustee prompt notice in writing of any damage to the Security. If any building or improvements erected on the 5 SF-2000 zree:OCCH=Trust Deed Property is damaged or destroyed by an insurable cause, the Borrower shall, at its cost and expense, repair or restore said buildings and improvements consistent with the original plans and specifications. Such work or repair shall be commenced within 120 days after the damage or loss occurs and shall be complete within one year thereafter. All insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, the Borrower shall make up the deficiency. 16. TITLE. The Borrower warrants that the Borrower lawfully has legal title to the Security without any limitation on the right to encumber. 17. GRANTING OF EASEMENTS. The Borrower may not grant easements, licenses, rights-of-way or other rights or privileges in the nature of easements with respect to the Security except those required or desirable for installation and maintenance of public utilities including water, gas, electricity, sewer, cable television, telephone, or those required by law. 18. TAXES AND LEVIES. The Borrower shall pay prior to delinquency, all taxes, fees, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security. However, the Borrower shall not be required to pay and discharge any such tax, assessment,charge or levy so long as (a) the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings, and (b) the Borrower maintains reserves adequate to pay any contested liabilities. In the event that the Borrower fails to pay any of the foregoing items, Agency may,but shall be under no obligation to, pay the same, after Agency has notified the Borrower of such failure to pay and the Borrower fails to fully pay such items within seven business days after receipt of such notice. Any amount so advanced by Agency, together with interest thereon from the date of such advance at the same rate of indebtedness as specified in the Note(unless payment of such an interest rate would be contrary to applicable law, in which event such sums shall bear interest at the highest rate then allowed by applicable law), shall become an additional obligation of the Borrower to Agency and shall be secured by this Deed of Trust. 19. CONDEMNATION. All judgments. awards of damages, settlements and compensation made in connection with or in lieu of taking all or any part of or interest in the Security under assertion of the power of eminent domain ("Funds") are hereby assigned to and shall be paid to Agency. Agency is authorized (but not required)to collect and receive any Funds and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and manner as Agency shall determine at its sole option. All or any part of the amounts so collected and recovered by Agency may be released to the Borrower upon such conditions as Agency may impose for its disposition. Application of all or any part of the Funds collected and received by Agency or the release thereof shall not cure or waive any default under this Deed of Trust. 6 SF-2000 agree:OCCH:Trust Deed 20. ACCELERATION ON TRANSFER OF SECURITY; ASSUMPTION. In the event that the Borrower, without the prior written consent of the Agency, sells, agrees to sell, transfers, or conveys its interest in the Security or any part thereof or interest therein, Agency may at its option declare all sums secured by this Deed of Trust to be immediately due and payable. This option shall not apply in case of: A. the grant of a tenant or leasehold to qualifying households who will occupy Project units as provided for under the Loan Documents; or B. sale or transfer of fixtures or personal property pursuant to the grant provisions in this Deed of Trust. Consent to one sale or transfer shall not be deemed to be a waiver of the right to require such consent to future or successive transactions. 21. RECONVEYANCE BY TRUSTEE. This Deed of Trust is intended to continue for the entire term of the Loan. Upon written request of Agency staring that all sums secured by this Deed of Trust have been paid and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by the Borrower of Trustee's reasonable fees, Trustee shall reconvey the Security to the Borrower, or to the person or persons legally entitled thereto. DEFAULT AND REMEDIES 22. EVENTS OF DEFAULT. Any of the events listed in the OPA as an Event of Default shall also constitute an Event of Default under this Deed of Trust. 23. ACCELERATION OF MATURITY. Upon the happening of an Event of Default which has not be cured within the times and in the manner provided in the OPA, Agency may declare all sums advanced to the Borrower under the Note and this Deed of Trust immediately due and payable. 24. AGENCY'S REMEDIES. Upon the happening of an Event of Default which has not be cured within the times and in the manner provided in the OPA, Agency may, in addition to other rights and remedies permitted by the OPA, the Dote, or applicable law, proceed with any or all of the following remedies: A. Enforce the assignment of rents and right to possession as provided for in this Deed of Trust, and/or seek appointment of a receiver to take over possession of the Security and collect Rents; B. Enter the Security and take any actions necessary in its judgment to complete construction on the Security as permitted under the Assignment of Development Rights executed by the Borrower(on file with Agency) and the assignment of K 7 SF-2000 aeree:OCCH:Trust Deed rents and right to possession in this Deed of Trust, either in person or through a receiver appointed by a court; C. Disburse from Loan proceeds any amount necessary to cure any monetary default under this Deed of Trust, the OPA, or the Note; D. Commence an action to foreclose this Deed of Trust pursuant to California Code of Civil Procedure Sections 725a, et seq., and/or seek appointment of a receiver from a court of competent jurisdiction with the authority to protect Agency's interests in the Security, including the authority to complete construction of improvements; E. Deliver to Trustee a written declaration of Default and demand for sale, and a written Notice of Default and election to cause the Borrower's interest in the Security to be sold, which notice Trustee or Agency shall duly file for record in the Official Records of Orange County, and exercise its power of sale as provided for below; or F. Pursue any other rights and remedies allow at law or in equity. 25. FORECLOSURE BY POWER OF SALE. Should Agency elect to foreclose by exercise of the power of sale contained in this Deed of Trust, Agency shall notify Trustee and shall deposit with Trustee this Deed of Trust (the deposit of which shall be deemed to constitute evidence that the unpaid sums disbursed under the Note are immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. Upon receipt of such notice from Agency, Trustee shall cause to be recorded,published and delivered to the Borrower such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on the Borrower, after lapse of such time as may then be required by laws and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Security, at the time and place of sale fixed by it in said Notice of Sale, whether as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in such order as it may determine unless specified otherwise by the Borrower, at public auction to the highest bidder for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to the purchaser its deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters of facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, the Borrower, Trustee, or Agency, may purchase at the sale. Trustee may postpone sale of all or any portion of the property by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new Notice of Sale. 8 _ SF-2000 Agree:OCCH:Trust Deed After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale as follows: (i) first, to the payment of all sums then secured by this Deed of Trust, in such order and amounts as Agency in its sole discretion determines, and (ii) the remainder, if any, to the person or persons legally entitled thereto. 26. REMEDIES CUMULATIVE. No right, power or remedy conferred upon or reserved to Agency by this Deed of Trust is intended to be exclusive of any other rights, powers or remedies, but each such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity. GENERAL PROVISIONS 27. GOVERNING LAW. This Deed of Trust shall be interpreted under and governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. 28. ATTORNEYS` FEES AND COSTS. In the event of any Event of Default, or any legal or administrative action is commenced to interpret or to enforce the terms of this Deed of Trust, the prevailing party in such action shall be entitled to recover all reasonable attorneys' fees and costs in such action. Any such amounts paid by Agency shall be added to the indebtedness secured by the lien of this Deed of Trust. 29. STATEMENT OF OBLIGATION. Lender may collect a fee not to exceed the maximum allowable under applicable law for furnishing a statement of obligations as provided in the California Civil Code. 30. CONSENTS AND APPROVALS. Any consent or approval of Agency required under this Deed of Trust shall not be unreasonably withheld. 31. TIME. Time is of the essence in this Deed of Trust. 32. NOTICES, DEMANDS AND COMMUNICATIONS. Formal notices, demands and communications between the Borrower and Agency shall be sufficiently given and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the principal offices of the Borrower and Agency as follows: �1 9 SF-2000 Agree:OCCH:Trust Deed Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Manager The Borrower: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City, CA 92655 Attn: Executive Director 33. BINDING UPON SUCCESSORS. All provisions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors-in- interest, transferees, and assigns of the Borrower, Trustee, and Agency. 34. WAIVER. Any waiver by Agency of any obligation of the Borrower in this Deed of Trust must be in writing. No waiver will be implied from any delay or failure by Agency to take action on any breach or default of the Borrower or to pursue any remedy allowed under the Deed of Trust or applicable law. Any extension of time granted to the Borrower to perform any obligation under this Deed of Trust shall not operate as a waiver or release the Borrower from any of its obligations under this Deed of Trust. Consent by Agency to any act or omission by the Borrower shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for Agency's written consent to future waivers. 35. AMENDMENTS AND MODIFICATIONS. Any amendments or modifications to this Deed of Trust must be in writing, and shall be made only if mutually agreed upon by Agency and the Borrower. 36. OWNER PARTICIPATION AGREEMENT CONTROLS. If there is any contradiction between this instrument and the OPA, the terms of the OPA shall control, except that the Borrower shall have no defense or claim that this instrument does not establish a valid lien on the Property or the Security. 37. DEFINITIONS. Capitalized terms not otherwise defined in this Deed of Trust shall have the same meaning as defined terms in the OPA. 38. PROOFS OF CLAIM. In the case of any receivership, insolvency,bankruptcy, reorganization, arrangement, adjustment, recomposition or other proceedings affecting the Borrower, its creditors or its property, Trustee, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of Agency allowed in such proceedings and for any additional amount which may become due and payable by the Borrower hereunder after such date. 39. SEVERABILITY. Every provision of this Deed of Trust is intended to be severable. If any term or provision of this Deed of Trust is declared to be illegal, invalid, or unenforceable 10 SF-2000 Agree:OCCH:Trust Deed by a court of competent jurisdiction, the legality, validity, and enforceability of the remaining provisions shall not be affected. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt and all payments made on the debt (whether voluntary or under foreclosure or other enforcement action or procedure) shall be considered to have been first paid or applied to the payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust. 40. SUBSTITUTION OF TRUSTEES. Agency may from time to time appoint another trustee to act in the place and stead of Trustee or any successor. Upon such appointment and without conveyance, the successor trustee shall be vested with all title, powers, and duties conferred upon Trustee. Each such appointment and substitution shall be made by a written instrument executed by Agency containing reference to this Deed of Trust and its place of record, which when duly recorded in the Orange County Office of the Recorder shall be conclusive proof of proper appointment of the successor trustee. BORROWER: Shelter for the Homeless, Inc. dba American Lodging, a California non ofit corporation By: J dy K m mann, lts: Executive Director By: d-"" Jim Mill r Its President/CEO II SF-2000 Agree:OCCH=Trust Deed STATE OF CALIFORNIA } ss. COUNTY OF ORAINGE- ) On Pi j., s�2 ,, before me, ` 'u tj f_� 10-eaa personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he,/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. IRENE JUNE WOOD + Commisiorti# 122.5t 13 Notary Public [SEAL] Z Notary PutNic-CardWYo ' Orange County j .6,090"'W— Nty comm.Egies Jun 19,= STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , a tL before me, _T6�Af,- ,2_rQ.p tdao.a, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their sigtatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.' Witness my hand and official seal. :KFNE JUNK WOOD Notary Public [SEAL] Commission# imi 15 z Notay Fudic-Callfornk3 Orange County My Comm.Exoies Jun 19.2003 Regulatory Agreement SF-2000 Agree:OCCH:Regala;ory agreement 0211 TOO-=2 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Property Commonly Knows as 7802 Barton Drive, Huntington Beach, California Lot 33 of Tract 4301, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 177 Pages 11 and 12, of said Miscellaneous Maps, in the Office of the County Recorder in said County. Except therefrom all oil gas, minerals and other hydrocarbon substances lying below a depth of 150 feet from the surface of said property, but with no right of surface entry, as provided in deed of records. Also except the subsurface water rights, but without the right of entry to the surface or the subsurface above a depth of 150 feet as dedicated on the map of said tract. 12 SF-2000 Agree:OCC H Trust Deed 14 e CALIFORNIA COUNTIES TITLE CO. THIS ORIGINAL DOCUMENT WAS SCANNED AND ELECTROHICAILY RECORDED ON FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL,TO: APR 2 7 2000 REDEVELOPMENT AGENCY OF THE Document No.d 067-oa a si3 OL CITY OF HUNTINGTON BEACH CALIFORNIA COUNTIES TITLE CO. 2000 Main Street Huntington Beach, CA 92648 Attn: Executive Director r.3 (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee Per Gov. Code§6103) REGULATORY AGREEMENT AND r'1 DECLARATION OF COVENANTS AND RESTRICTIONS r�r THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this 17th day of April, 2000, by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency") and SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation("Participant"). RECITALS: A. Agency and Participant have entered into that certain Owner Participation Agreement, dated April 17, 2000 (the "OPA"), concerning Participant's redevelopment of that certain real property, owned in fee by Participant, more particularly described in Attachment No. 1 attached hereto and incorporated by reference herein (the "Site"). The OPA describes the "Project" which generally consists of Participant's rehabilitation of an existing four (4) unit apartment building on the Site and subsequent management thereof as an affordable rental housing complex. B_ Agency and Participant also entered into that certain Note (the "Note"), with a Note Date of April 17, 2000, pursuant to which Agency has provided Participant with a loan in the principal amount of Three Hundred Fifty Thousand Dollars ($350,000.00) ("Loan Amount"). The Note provides for Agency's waiver and discharge of the Loan Amount by one-thirtieth (1/30) each year for thirty(30) years, subject to a minimum repayment as specified in the Note. C. Agency and Participant 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 in accordance with the terms set forth below for the term of this Agreement. RECEIVED Regulatory Agreement MAY 0 8 Page 1 of 13 ZQQQ " SF-2000 Agree:OCCH:Regulatory Agreement 03/31/00-#2 ECO I EPARTMFNT OF OMIC DEVELOpMEh T AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, for the term of this Agreement, shall be held, transferred, encumbered, used, sold, conveyed, leased and occupied, subject to the covenants and restrictions hereinafter set forth: 1. DEFINITIONS. 1.1 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent as set forth by California Health & Safety Code Section 50053,or its successor. 1.2 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer to Eligible Very Low Income Tenants, Eligible Low Income Tenants who are otherwise eligible to rent a Unit. 1.3 Eligible Very Low Income Tenant. As used in this Agreement, the term "Eligible Very Low Income Tenant" shall mean those tenants whose household income does not exceed fifty percent (500/n) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "very low income," and who are otherwise eligible to rent a Unit. 1.4 Orange County Median Income. For purposes of this Agreement, the "Orange County Median Income" shall be determined by reference to the regulations published by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50093, or its successor. 1.5 Unit and Units. As used in this Agreement, the term "Unit" shall mean one of the four(4) rental dwelling units in the Project, and the term "Units" shall mean two, or more of the four(4) of the rental 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. TERM OF AGREEMENT, RESIDENTIAL RENTAL PROPERTY. The term of this Agreement shall be thirty (30) years from the effective date of the OPA. Participant hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the Participant hereby represents, covenants, warrants and agrees as follows: 2.1 Punose. The Site will be acquired and the Project developed for the purpose of providing EIigible Tenants rental housing. Regulatory Agreement _ Page 2 of 13 SF-2000 Agree:OCCH.Regulatory Agreement 02")7.00-92 V � 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating,cooking and sanitation in accordance with the terms of the OPA. 2.3 Residential Use. None of the dwelling 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 without the Agency's prior written consent. 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Participant take any steps in connection with the conversion_ to such ownership or uses to condominiums, or to any other form of ownership,without the prior written approval of Agency. 2.5 Preference to Eligible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the dwelling units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.3 below. 2.6 Liabili1y of Participant. Participant and Manager shall not incur any liability under this Agreement as a result of fraud or negligent or intentional misrepresentation by a tenant. 3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: 3.1 Income Restrictions. Except as expressly provided herein, throughout the term of this Agreement, the four (4)units shall be rented to Very Low Income Tenants and these Units shall be designated as "HOME Units" and the rents for these Units shall not exceed the `low income" rent as defined by HOME Program, as set forth at Section 92.252 of Title 24 of the Code of Federal Regulations. 3.2 Rental Rates. Participant shall rent each of the Units at no greater than the Affordable Rent applicable to the particular Unit. 3.3 OccgRancv By Eligible Tenant. A Unit occupied by an EIigible Tenant at the commencement of occupancy shall be treated as occupied by an Eligible Tenant until the Unit is vacated. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until reoccupied. (a) As to the HOME Units, the HOME Program allows tenants to continue residing in income restricted units even if their income increases. Pursuant to the HOME Program, Participant may increase the tenant to no more than thirty percent (30%) of their actual household income if their income exceeds the maximum allot{,able income for the HOME Unit. Regulatory Agreement Paze 3 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 02/17/00-#2 3.4 Income Computation. Immediately prior to an Eligible Tenant's occupancy of a unit, Participant shall obtain and maintain on file an income Computation and Certification form from each such Eligible Tenant dated immediately prior to the date of initial occupancy in a Unit by such Eligible Tenant. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by taking one or more the following steps as a part of the verification process: (i)obtain two (2)pay stubs for 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. 3.5 Rental Priori Tenants living in the Project prior to Participant's rehabilitation of the Units as contemplated by the QPA ("Initial Rehabilitation") who are Eligible Tenants meeting the income restrictions of the Units as set forth in Section 3.1 shall be given first priority in re-leasing Units in the Project following completion of the Initial Rehabilitation. Except as set forth above, Units shall be rented to Eligible Tenants on a first-come, first-served basis; provided, however, that Participant may, in Participant's sole discretion, maintain an "interest list" or "eligibility list" of potential tenants but that Participant shall not be liable to Agency or any person, firm, or entity in the event a 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. 3.6 Renting Vacant Units. When a unit becomes available as a result of a tenant vacation, Participant shall rent the unit to an Eligible Tenant in accordance with the following procedure: (a) First, Participant shall rent the Unit to persons who have been displaced by Agency activities, pursuant to California Health and Safety Code Section 33411.3,provided that Agency provides Participant with reasonable notice. (b) Second, Participant shall rent any vacant unit in the order of priority as set forth in Section 3.5. 3.7 Maintenance of Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the Agency to inspect the books and records of Participant pertaining to the Project including, but not limited to,those records pertaining to the occupancy of the Units. 3.8 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Regulatory Agreement Page 4 of 13 SF 2000 Agree:OCCH:Regulatory Agreement 02117.'00-#2 3.9 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. 4. VIANTEN.ANICE. 4.1 Maintenance Covenant. Participant 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. In addition, Participant shall keep the Site free from all graffiti and any accumulation of debris or waste material. Participant 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 approved materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Agreement. 4.2 Agency Rights. Agency shall have the right annually to enter upon the Site to inspect both the interiors and exteriors of the Site, upon seventy-two (72)hours notice to Participant. Agency may perform or cause to be performed the maintenance necessary to cure any default of these maintenance covenants and Participant shall be liable for payment to Agency of Agency's reasonable costs (excluding staff salaries and overhead and other similar costs) to perform such required maintenance; provided, however, that Participant first be given written notice by Agency of the actions required to cure any default, and Participant, after receipt of such notice, shall have sixty (60) days to cure such defaults, but Participant shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the sixty(60)day period referenced above so long as Participant has commenced to cure such default within the same sixty(60)day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by Agency after a property inspection attended by a representative of Participant that pose an immediate danger to life or limb, Participant shall have three (3) days to effect corrections of such condition(s) to Agency's reasonable satisfaction. 4.3 Annual Report. Participant covenants and agrees to submit to the Agency an annual report (the "Annual Report") required by California Health and Safety- Code Section 33418. The Annual Report shall include for each Unit the rental rate and the income and family size of the occupants. The income information shall be supplied by the tenant in a certified statement on a form provided by the Agency. The Participant shall submit the Annual Report on or before the end of the first calendar quarter of the year following the year covered by the Annual Report. The Participant shall provide for the submission of such information in its leases with tenants. Agency shall not charge Participant a fee for reviewing the Annual Report, or for Agency's or Participant's compliance with Health and Safety Code § 33418. Regulatory Agreement Pate 5 of 13 - SF-2000 Agree:OCCH:Regulatory Agreerrent ' 021 1 7100-Y2 4.4 Management Plan. Participant shall prepare, submit to Agency Executive Director within sixty (60) days of Recordation of this Agreement and maintain in effect a Management Plan in accordance with the following: (a) The Management Plan, including such amendments as may be approved in writing by the Agency, shall remain in effect for the term of this Regulatory Agreement. Participant shalt not amend the Management Plan or any of its components without the prior written consent of the Agency. The components of the Management Plan shall include: (1) Management Agent. The naive and qualifications of the proposed management agent. The Agency 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 Project. (2) Management Program. A description of the proposed management, maintenance, tenant selection and occupancy policies and procedures for the Units. (3) Management Azeement. A copy of the proposed management agreement specifying the amount of the management fee and the relationship and division of responsibilities behveen Participant 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 Units. (5) Annual Qperating Budget. Prior to the completion of construction and annually thereafter not later than fifleen (15) days-prior to the beginning of the next fiscal year of the Project, Participant shall submit a projected operating budget to the Agency Executive Director for review and approval. The Agency shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Agency provides to Participant its written disapproval within thirty(30) days after receipt of a request for approval, provided Participant includes with its request, a written notice, in capital letters, stating as follows: NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN . THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ORANGE COUNTY COMMUNITY HOUSING CORPORATION, FAILURE BY THE AGENCY TO APPROVE OR DISAPPROVE THE MATTER SUBMITTED N ITH THIS REQUEST WITHIN 30 DAYS SHALL BE DEEMED AN APPROVAL. Regulatory Agreement Page 6 of 13 SF•2000 Agree:OCCH:Regulatory Agreement 02117,00-=Q Any disapproval shall be in writing and contain the Agency's reasons for disapproval. (b) Participant hereby covenants and agrees the Agency shall have the right, at any time and from time to time, to give notice to Participant if the Agency determines that the Project is not being managed or maintained in accordance with the Management Plan. The Agency may require the Participant to change management practices or to terminate the management agent and retain a different management agent, approved by the Agency. The Agency agrees that prior to requiring the Participant to change its management agent or the management practices the Agency shall informally consult with Participant, in an attempt to resolve the dispute. If the Agency determines that such an attempt at informal resolution has been unsuccessful, it shall give the Participant thirty(30) days written notice to change the management agent or practice, as the case may be. If Participant fails to do as requested by the Agency in the written notice, the Agency may then require the immediate change of the management practice or agent, as the case may be. The management agreement shall provide that it is subject to termination by the Participant without penalty, upon thirty (30) days prior written notice, at the direction of the Agency. Within ten (10) days following a direction of the Agency to replace the management agent, the Participant shall select another management agent or make other arrangements satisfactory to the Agency for continuing management of the Project. The Participant shall notify the Agency upon learning that there is a voluntary change in the management or control of the management agent, and, if the change is unsatisfactory to the Agency, the Agency shall be entitled to require the Participant to change the management agent in accordance with the terms of this paragraph. 5- ENFORCEMENT. In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant pursuant to this Agreement, and if such default remains uncured for a period of sixty (60) days after written notice thereof(or such longer period as may apply to the specific alleged default) shall have been given by Agency, or, in the event said default cannot be cured within said time period, Participant has failed to commence to cure such default within said sixty (60) days and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Participant 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 pursuant to the OPA. Regulatory Agreement Page 7 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 02/17/00-#2 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. NONIDISCRINIINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, 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(except as permitted by this Agreement). 6.1 Form of Nondiscrimination and Nonse a ation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status 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, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location,number,use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases: `The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, 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 land herein leased." (c) In Contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any Regulatory Agreement Page 8 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 02117,00-#2 such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 7. COVENANTS TO RUN WITH THE LAND. Participant hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Participant 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 Participant's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable attorney's fees and costs. Attorneys fees shall include attorneys fees on any appeal, and in addition a party entitled to attorneys fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery, and expert witness fees. 9. AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Orange. 10. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by(i) personal delivery, (ii) courier service that provides a receipt showing date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Clerk Participant: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City, CA 92655 Attn: Executive Director Regulatory Agreement Page 9 of 13 - sF-2000 Agee:OCCH:Regulatory Agreement 04;04.00-=2 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/1NTEGRATION. 11.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable,the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 11.2 Waiver. A waiver by either party of the performance of any covenant or condition herein-shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 11.3 Integation. This Agreement contains the entire Agreement between the parties and neither parry relies on any warranty or representation not contained in this Agreement. 12. GOVERNING LAW. This Agreement shall be governed by the 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. SUBORDL\IATION. This Agreement shall be junior and subordinate to the liens of the deeds of trust identified in the OPA as the Construction/Permanent Lender's deed(s)of trust, and such other and further documents, including regulatory agreements, as such lenders may require,not to exceed Fifty Thousand Dollars (50,000.00) in debt. If, from time to time and at one or more times, Participant chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this Agreement to the refinancing lender's deed of trust under the same terms and conditions as set forth herein on the condition that the amount of the new loan is no greater than the original principal balance of the refinanced note. Agency agrees to execute such subordination agreements as may be required to effect the priority set forth in-this Section. [end- signature page follows] Regulatory Agreement Page 10 of 13 - SF-2000 Agree:OCCH:Regulatory Agreement 02117 00-'2 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "AGENCY" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: Lxt By: Agency Clerk �f�} .7_� ha an APPROVED AS TO FOR1V1: By: qX3 gency Counsel "PARTICIPANT" SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation ' �4By: dy Kamp xecutive Director AND By: Ji r President/CEO Regulatory Agreement _ Page 11 of 13 SF-2000 Agree:OCCH:Regulatory Ageemert 04'04 00-Y2 STATE OF CALIFORNIA } ) ss. COUNTY OF ORANGE. } On A 5: zit, before me, P-glo u n1 j_� WlOaa, personally appeared Qj Lrh personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s)or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. IFti=NE JUNE WOOD s; Commission# 1225115 Notary Public [SEAL] x - Notary Public-Cardamia Orange County N!y comm.ac es Jun 19,MM STATE OF CALIFOR-NIA } ) ss. COUNTY OF ) On .AD&t before me, .���� 1�tVr? A o,A, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s)or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. !RENE JUNE WOOD Notary Public SEAL] rA;—, _. commission# 1225115 i rr Notc3y Public-Calitoiia Orange county My Comm.Emirs Jun 19,2M3 Regulatory Aareement VG 9e 1 7- o f t-3 SF-2000 Agree:OCCH:Regulatory Agreement OV17/00-;;2 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of � el On A/� DD1 Z OOQ before me, l?a:e Name and TiVe of Officer(e.g.,'J40 Doe.Notary Public') personally appeared O Na^1e(s;of SigsersJ L4 personally known to me ❑ proved to me on the basis of satisfactory evidence to be the personor whose name* isle subscribed to the within instrument and acknowledged to me that helsbelthey executed the same in his/ber their authorized capacity(ir*, and that by his/bef/their CHRISTINE CLEARY signature*) on the instrument the person(• , or Commtulon#12SOM the entity upon behalf of which the person(g) Notary Public. illd flange County acted, executed the instrument. ` IS My Comm.E>PVm Jon 1I&2M4 WITNESS my hand aanndd official seal. Place Notary Seal Above •Signature of Noa lic OPTIONAL Though the information below is not required by law. it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: y Document Date: Number of Pages: /3 Signer(s)Other Than Named Above: Capacity(ies) Claimed by Signer., Signer's Name. ❑ Individual I ; . cp c th!-b h.e•e 1. ❑ Corporate Officer----Title(s): ❑ Partner—❑ Limited ❑ General : ❑ Attorney in Fact ❑ Trustee v�5 ❑ Guardian or Conservator GlOther: , A& _ � Cifl.G//' CW Signer Is Representing: 01999 Nataial Nmry Asso6,"•9350 De Solo Ave..P O.Bo.2402•chatsworh-CA 91313-2402•www.r=xnalnoary.org Prod.No.5907 Reorder.Call Toll-Free 1-800-876.6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California K D SS. County of r On O , before me, Date Name and T;le o'Officer(e-g..'Jane-Ube,Notary Public') personally appeared A-9 V Name(s) igner(s) g personally known to me D proved to me on the basis of satisfactory evidence to be the person(a) whose name(,$) is/aw subscribed to the within instrument and acknowledged to me Ibethe/she/ttiey executed the same in b,ielher/t#eir authorized C�lIZlSlIhE CI FJ1Ry capacity(Loo, and that by J:ais/herlftbe+r iCommission#ly�pM signature* on the instrument the persono, or Notary Pink.Caiforrtta the entity upon behalf of which the person(c Orionge,Courtly acted. executed the instrument. My Comm-B0%Jet 1EL20D1t WITNESS my hand and official seal. Place Notary Seal Above Signa'cre Y No'ary P ,. OPTIONAL Though the information below is not required by law. it may prove valuable to persons relying on the document 2 and could prevent fraudulent removal and reattachment of this form to another document. i Description of Attached Document T Title or Type of Document: i Document pate: Number of Pages: /,6 Signer(s) Other Than Named Above: Sudy �pnaanr�, Tian //er Capacity(ies) Claimed by Signer' Signer's Name: - Individual ` Tip of:hjmo n.re Corporate Officer—Title(s): G Partner—n Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator �J i;�,Other: — Signer Is Representing: Sri ca &mk J p 1999 National Notary Association•9350 Ve S010 Ave-.PO.Box 2402•Cna'sworth.CA 91313.2402•�.na iuminotarforg Prod No.5907 Reorder:Cal ToIFFFee 1-1300-876-6827 ATTACI-MIENT NO. 1 LEGAL DESCRIPTION OF SITE Property Commonly Knows as 7802 Barton Drive, Huntington Beach, California Lot 33 of Tract 4301, in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 177 Pages 11 and 12, of said Miscellaneous Maps, in the Office of the County Recorder in said County. Except therefrom all oil gas, minerals and other hydrocarbon substances lying below a depth of 150 feet from the surface of said property, but with no right of surface entry, as provided in deed of records. Also except the subsurface water rights, but without the right of entry to the surface or the subsurface above a depth of 150 feet as dedicated on the map of said tract. Regulatory Agreement Page 13 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 03/31/00-=2 • BI CAS caI4. DAY. Uzi S. HaLT1 , Ec-,H Dv-v- Council/Agency Meeting Held: Deferred/Continued to: Approved ❑ Conditionally-Approved ❑ Denied - ity 's Signature Council Meetin ate: March 20, 2000 Department ID Number: ED 00-16 4ef!�: CITY OF HUNTINGTON BEACH ,R�SJgrn , QUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCY MEMBER SUBMITTED BY: RAY SILVER, City Administrator/Executive Direct CD �< PREPARED BY: David C. Biggs, Economic Development Director y, SUBJECT: Approve An Owner Participation Agreement (OPA) With StAterr, for the Homeless dba American Lodging (Shelter) -0 x" Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: An OPA between the Redevelopment Agency and Shelter for the Homeless (Shelter) is submitted for approval. This agreement provides a maximum of $350,000 in HOME funds for the acquisition and rehabilitation of 7802 Barton Drive Funding Source: 1998 HOME Investment Partnership funds. Recommended Action: Motion to: City Action(s): 1. Waive the City's insurance requirements for purposes of approving the Agency loan agreement only. Direct staff to ensure that the minimum insurance requirements are met by Shelter by the close of escrow. Redevelopment Agency Actions: 1. Approve a loan agreement with Shelter for the Homeless (Shelter) for $350,000 in HOME Investment Partnership funds for the acquisition and rehabilitation of 7802 Barton Drive. 2. Approve and authorize execution and recordation by the Agency Chairman and Clerk of the entire loan agreement and all attachments after execution by Shelter, when advised by the City Attorney's Office and authorize recordation of documents. 3. Authorize the transfer (by wire, if necessary) of Agency funds in the amount necessary to Apex Escrow Company (Escrow No. 00018489) to effect the closing of the acquisition escrow. REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: March 20, 2000 DEPARTMENT ID NUMBER: ED 00-00 Alternative Action(s): 1. Do not approve the proposed transaction, or direct staff to renegotiate the terms with Shelter. Analysis: Shelter currently owns and manages eight units in the Oakview neighborhood, including 7801 Barton Drive. Shelter has an adjacent Barton Drive building in escrow at a reasonable price ($285,000) given current market conditions. Staff and Shelter have concluded negotiations (a complete outline of deal points is included as Attachment No. 4) and have agreed to the following terms: • The City of Huntington Beach will provide $350,000 in HOME Investment Partnership funds as a residual receipts (with a minimum repayment) loan to Shelter for the Homeless (Shelter). These funds will be used to acquire and rehab 7802 Barton Drive as follows: • $285,000 for acquisition; • Approximately $10,000 for closing costs; • A maximum of $55,000 per unit for rehab. • Shelter will contribute a minimum of $30,000 (combined) in equity and services toward the rehab of the property. • All units will remain affordable for thirty years for households earning less than 50% of Orange County median income (defined as very low income) as adjusted for family size. The thirty year affordability period exceeds those minimums (ten to fifteen years) required by the HOME program. Because these properties are located in a redevelopment project subarea and due to a thirty-year affordability period, these units will be credited toward the Redevelopment Agency's housing obligations. • The amount of HOME assistance will be carried as an interest free loan if the units remain in compliance with the terms of the agreement. Should a default occur, or should the units be sold or transferred before the term of affordability expires, the full amount of the HOME assistance must be repaid with simple (but accruing) interest. This amount is set at the prime rate, plus two points. • Beginning in the third year of the agreement, and continuing annually through the thirtieth year, Shelter will forward the proceeds of a residual receipts account to the City as a means of repayment of the HOME assistance. The minimum amount of any annual repayment will be $1,200.00. The RAM MOC -2- 03/09/00 4:07 PM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: March 20, 2000 DEPARTMENT ID NUMBER: ED 00-00 repayment period may be extended for up to two additional years with department head approval. • Should the economics of the project not allow for the minimum repayment of $1,200.00, then Shelter will have the right to appeal to the City Council and request that the minimum repayment be reduced, suspended or forgiven. Shelter agrees to bear the entire burden of proving its inability to meet the minimum payment. The City Council will reserve the right to reduce, suspend, forgive or renegotiate the terms of repayment based on the evidence submitted by Shelter. • Shelter agrees to the amount of reserves that it shows on the final approved pro forma that is to be submitted to the City. Shelter will submit its audited financial statements to the City annually after acceptance and certification of such statements by Shelter's Board of Directors. The City will review the statements and may choose to require further analysis or review by a third party, but must do so at its own expense. • Rents will be set at levels that are affordable to households earning less than 50% of median income. These rent restrictions will exceed those required by HOME regulations. Unit #/Size Projected Rent 4 Two Bedroom $550 HUD sets maximum per unit HOME subsidy amounts on an annual basis. Currently, the maximum subsidy amount for a two-bedroom unit is $100,168. With that number, the maximum total subsidy for the Barton Drive project could be $1,001,680. The actual subsidy per unit breakdown on this project is as follows: Total HOME Subsidy: $350,000 Total Number of Units: 4 Per Unit HOME Subsidy �Q Acquiring and rehabilitating small multifamily properties represents an opportunity to improve and preserve existing affordable housing throughout Huntington Beach, but especially in a focus area such as the Oakview neighborhood. Purchase of another property by a housing nonprofit in this area is another step toward stabilizing rental property ownership, which in turn should help improve the quality of the housing in the neighborhood by keeping rents low, and eliminating overcrowding -- at least in these buildings. RAAI.DOC -3- 03/09/00 4:07 PM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: March 20, 2000 DEPARTMENT ID NUMBER: ED 00-00 These units will be available to very low income households (who are currently paying $750 and up per month in rent) with more affordable rents. It is not unusual to find two or more families living together in one-family units because of the high rents. Shelter's involvement will allow one family to occupy each unit and pay approximately 30% of their income, or the established rent, whichever is higher. On December 1, 1999, the Council's Economic Development Committee (EDC) heard a presentation on the project by Agency staff and Shelter. The EDC directed staff to move forward with the project to the full Council (Agency). The Agency's involvement with the HOME Program is consistent with the City Council's established goal of providing for a diverse housing stock throughout the community. Environmental Status: Categorically exempt under the National Environmental Protection Act (NEPA). Attachment(s): City Clerk's Page • - No. Description 1. Loan Agreement with Shelter Exhibit E: Release of Construction Covenants Exhibit F: Subordinated Deed of Trust Exhibit G: Regulatory Agreement Exhibit H: Promissory Note Exhibit I: Subordination Agreement 2. Location Map: 7802 Barton Drive 3. Shelter Pro Forma 4. Deal Point Summary GAB: ext. 8831 RAM MOC -4- 03/09/00 4:07 PM Owner Participation Agreement OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into as o the AV," day of A2000 ("Effective Date"), by and between REDEVELOPS ENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and SHELTER FOR THE HOMELESS, INC., dba AMERICAN LOD ING, a California nonprofit corporation("Participant"). RECITALS A. Agency is a public body, corporate and politic, exercising Bove ental functions and powers and organized and existing under the Community Redevelopment Law of the State of California(California Health and Safe4, Code Section 33000 et seq.). B. Participant has opened an escrow to acquire the "Site" (as such term is defined herein) from Yan-Chow Ma and Tai-Ann Ma ("Seller') and intends to deve-fop the `'Project" (as such term is defined herein) on the Site in accordance with the terms of this Agreement. C. Agency desires to meet its affordable housing goals pursuant to the California Community Redevelopment Law by assisting Participant in the acquisition of the Site to facilitate Participant's rehabilitation-in-place of an apartment building of four units each on the Site. After rehabilitation, the Project shall be rented to tenants whose household incomes do not exceed very low income as defined by California law. Agency's assistance shall bdIin the form of a loan in the amount of THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00) to assist Participant in meeting the cost of acquisition and rehabilitation off, the Site. Said loan shall be funded from funds the Agency obtains from the HOME Investment artnership Program. NOW, THEREFORE, in consideration of the promises an 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, s all have the meanings given unless expressly provided to the contrary: The term "Agency" shall mean the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of Agency. 1 SF-2000 Agree:OCCH:OPA 02!2500 i The term "Agency Deed of Trust" shall mean the Subordinated Deed of Trust attached hereto as Exhibit "G". j The term "Agency Loan" shall mean the Agency's loan to Participant in an amount not to exceed THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00) of HOME Funds, as evidenced by the Agency Mote and secured by the Agency Deed of Trust. f The term "Agreement" or any reference to this "Agreement" shall mean this Owner Participation Agreement executed by and between Agency and Participant, including all exhibits attached hereto, which exhibits are incorporated herein by this reference and all other documents incorporated herein by reference. The term "Approved Project Plans and Permits" shall mean all of the plans, permits, and approvals required for the Project, as approved by the Agency and/or the City including, but not limited to, preliminary and final drawings (final drawings shall be in sufficient detail to obtain a building permit), site plans,building plans and elevations, grading plans, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications that City and Agency customarily require for such a Project,and including all required approvals and findings pursuant the California Environmental Quality Act of 1970, as amended, and regulations promulgated thereunder ("CEQA"), and, if applicable, the National Environmental Policy Act of 1969,as amended, and regulations promulgated thereunder. The term "City" shall mean the City of Huntington Beach, a municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648. The term "Construction/Permanent Lender" shall mean one or more lenders of Participant's choice providing funds for Participant's rehabilitation of the Units. including any replacement or permanent loan that replaces the construction lender in an amount not to exceed FIFTY THOUSAND DOLLARS (S50,000.00). 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 "Effective Date" shall mean the first day of the month, in the year 2000, following the date the Agency's governing body approves this Agreement and authorizes its Chairman to sign it; which date shall be inserted into the preamble of this Agreement. The term "Eligible Tenant" shall mean any person entitled to rent a Unit as set forth in the Regulatory Agreement. The term "Escrow" shall mean that certain escrow with Title Company, Escrow Division, which has been established to convey the Site from the Seller to Participant, and into which Agency shall deposit the portion of the Agency Loan funds described in Section 3.2 in accordance with the terms of this Agreement. 2 SF-2000 Agree-OCCIL OPA 02l25M The term "Executive Director" shall mean the individual duly appointed to the position of Executive Director of the Agency, or authorized designee. Whenever an administrative action is required by Agency to implement the terms of this Agreement, the Agency Executive Director, or an authorized designee, shall have authority to act on behalf of Agency, except with respect to matters reserved under California law wholly for Agency Board determination. The term "Force Majeure" shall mean any war; insurrection; strike; lock-out; labor dispute; not; 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 City or any other public or governmental agency or entity (except that any act or failure to act of City or Agency shall not excuse performance by Agency); 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 Participant. 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 "HOME" means the HOME Investment Partnership Program created by the National Affordable Housing Act of 1990. The term "HUD"means the United States Department of Housing and Urban Development. The tern "Lease" means the lease entered into between Participant and a tenant of a unit in the Project. The term "Median Income" means the median income for the Orange County Primary Metropolitan Statistical Area (PMSA), with adjustments for household size, as determined from time to time by the U.S. Department of Housing and Urban Development (HUD) pursuant to the United States Housing Act of I937 as amended, or such other method of median income calculation applicable to the City that HUD may hereafter adopt in connection with said Act. 3 SF-2000 Agree:OCCI k OPA 02!2-5%00 The term "Note" shall mean that certain Promissory Note Secured by Subordinated/Deed of Trust attached hereto as Exhibit "F". The term "Participant" shall mean SHELTER FOR THE HOMELESS INC., dba AMERICAN LODGING, a California nonprofit corporation, whose address is 1 71 61 Jackson Street, Midway City, CA 92655. The Term "Project" shall mean generally the rehabilitation of the existing four-unit apartment building on the Site and the subsequent rental of the Units therein td Eligible Tenants, pursuant to the procedures set forth herein and more particularly described in the Scope of Development. The term "Project Budget/Pro Forma" shall mean the sources land uses of funds for acquisition of the Site and the development of the Project as set forth in Exhibit "J". The term "Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and.Restrictions attached hereto as Exhibit 'T c i The term "Rehabilitation Account" shall have the meaning ascribed in Section 3.9. I The term "Release of Construction Covenants" shall mean that release attached hereto as Exhibit "E" issued by Agency to Participant pursuant to the provisions of Section 4.7 below. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit "D" setting forth the times upon which performance bylthe parties under this Agreement is due. The term "Scope of Development" shall mean that certain exhibit attached hereto as Exhibit "C". I The term Seller shall collectively mean Yan-Chow Ma and Tai-Ann Ma, husband and wife, as joint tenants. The term "Site" shall mean that certain real p perty located in the City of Huntington Beach, County of Orange, State of California commonl'y known as 7802 Barton Lane, Huntington Beach, California, and legally described in Exhibit "A" and depicted on the Site Map. i The term "Site Map" shall mean the map dttached hereto as Exhibit "B" depicting the location of the Site. a The term "Subordination Agreement" shall mean the form of Subordination Agreement attached hereto as Exhibit "H". I The term "Units" shall mean the four(4)dwelling units comprising the Project and subject to rent restrictions as set forth in the Regulatory Agreement. 4 SF-2000 Agree:OCCH:OPA 02l25.00 The term "Very Low Income Households" shall mean a family or individual whose annual income does not exceed fifty percent (50%) of the median income for the Orange County Metropolitan Statistical Area as determined by HUD with adjustments for smaller and larger families. SECTION 2. SUBJECT OF THIS AGREEMENT. 2.1 Purpose of the Agreement (a) The purpose of this Agreement is to implement t Community Redevelopment Law by providing a loan (the `'Agency Loan") to assist Particip to pay a portion of the Project costs, in an amount not to exceed THREE HUNDRED F Y THOUSAND DOLLARS ($350,000.00), as evidenced by the Note secured by the Agency eed of Trust, which Agency Loan is composed entirely of HOME funds. (b) This Agreement is intended to facilitate Parti pant's acquisition of the Site and rehabilitation of an existing apartment building located the on for rental to very low income tenants. The Project pursuant to this Agreement and the lfillment generally of this Agreement are in the best interests of the City and the welfare of its r sidents, and are in accordance with the public purposes and provisions of applicable federal, state, d local laws and requirements under which the Project has been undertaken and is being assisted. (c) The Project will be used and operated or not less than thirty(30) years as rental housing,with all of the Units restricted to occupancy to ery Low Income Tenants. 2.2 The Redevelopment Plan. This Agree ent is made in accordance with the Huntington Beach Redevelopment Project (the "Merge Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on Decem er 16, 1996, and which merged together four different, previously approved project areas. T Site is located inside of the Merged Redevelopment Project. Agency intends this Agreeme to meet its obligations pursuant to Health and Safet3-Code Sections 33413, 33334.2 and 33413(b 2)(A)(ii). 2.3 Participant. The Participant is S-elter for the Homeless, Inc., dba American Lodging, a California nonprofit corporation, whose ddress is 15161 Jackson Street, Midway City, CA 92655. 2.4 Term of Agreement. The term of this Agreement shall be for a period of thirty (30)years; with such period commencing on the ffective Date of this Agreement. 2.5 Prohibition Against Transfers Right of First Refusal. (a) The qualifications identity of the Participant are of particular concern to the Agency. It is because of those qua lifica ns and identity that the Agency has entered into this Agreement with the Participant. No voluntary r involuntary successor in interest of the Participant shall acquire any rights or powers under this A ment except as expressly set forth herein. 5 SF-2000 Agree:OCCH:OPA 03/1 G;00 (b) Participant agrees that Participant shall not sell the Site during the term this Agreement, unless and until Participant has given to Agency notice in writing of its in t to sell, specifying the identity of the prospective buyer and the price and terms of the con plated sale. Within ninety(90) days after Participant gives Agency written notice of Partici pal -s intent to sell, Agency shall have the right to purchase the Site at the same price and on the a terms and conditions set forth in Participant's written notice of intent to sell. To exercise 1 option, Agency must, within the same ninety (90) day period, deposit in escrow with any crow company in Orange County, California, all moneys and instruments required by the terms f Participant's notice of intent to sell to be paid or delivered to Participant on close of esc wand shall also give Participant written notice of the deposit. If Agency fails to exercise the t in accordance with the provisions of this section, Participant may sell the Site to the prospect] buyer for the price and on the terms contained in the notice. If at any time during the term of this Agreem t Participant receives from any third party a bona fide offer to purchase the Site on terms accept le to Participant, Participant shall give written notice of the offer to Agency. Within ninety (90 days after Participant gives Agency written notice of the third-party offer, Agency shall have the 'ght to purchase the Site at the same price and on the same terms and conditions set forth in the hird-party offer. To exercise its right, Agency must, within the same ninety (90) day period, dep sit in escrow with any escrow company in Orange County, California, all moneys and instrumen required by the terms of the offer to be paid or delivered to Participant on close of escrow and all also give Participant written notice of the deposit. In the event Agency fails to exercise th option to purchase in accordance with the provisions of this Section, Participant may sell the S_ a to the third parry making the offer on the same terms and conditions set forth in that offer. If or any reason the Site is not sold to the party making the offer, Participant shall give Agency the ame right to purchase the Site on receiving any subsequent offer from any third party that is accept ble to Participant. In deciding the sell the Site, P icipant shall make every reasonable effort to sell the Site to another nonprofit housing core ation with Participant's similar experience and reputation in the field of low-income housing. (c) For the reasons cit above,the Participant represents.and agrees for itself and any successor in interest that without th prior written approval of the Agency, there shall be no significant change in the ownership of the articipant or in the relative proportions thereof, or with respect to the identity of the parties in c-ntrol of the Participant or the degree thereof, by any method or means. (d) The Participan shall promptly notify the Agency of any and all changes whatsoever in the identity of the partie in ownership and/or in control of the Participant or the degree thereof, of which it or any of its fficers have been notified or otherwise have knowledge or information. This Agreement may be erminated by the Agency and the Agency may exercise its remedies pursuant to the Agency Note and Agency Deed of Trust, if there is any significant change (voluntary or involuntary) in membership, ownership, management or control, of the Participant (other than such changes occasioned y the death or incapacity of any individual). 6 SF-2000 Agree:oCCii:oPA 02/25/00 (e) Participant shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Site (referred to hereinafter as a "Transfer"), without prior written approval of the Agency, except as expressly permitted by this Agreement. Consent to a Transfer shall not result in acceleration of the Agency Note. Any -ch proposed transferee shall have the qualifications and financial responsibility necessary and a quate as may be reasonably determined by the Agency, to fulfill the obligations undertake in this Agreement by the Participant. Any such proposed transferee, by instrument in ,%?riting tisfactory to the Agency and in form recordable among the land records, for itself and its su essors and assigns, and for the benefit of the Agency shall expressly assume all of the obl' ations of the Participant under this Agreement and agree to be subject to all conditions and restn ions applicable to the Participant in this Agreement. There shall be submitted to the Age y for review all instruments and other legal documents proposed to effect any such Transfer, if approved by the Agency its approval shall be indicated to the Participant in writing. (f) In the absence of specific written agreem t by the Agency, no unauthorized Transfer, or approval thereof by the Agency, shall be dee d to relieve the Participant or any other party from any obligations under this Agreement. (g) Consent to any transfer shall not be dee ed to be a waiver of the right to require consent to future or successive transfers. (h) The provisions of this Section 2.5 all be of no force or effect as of the expiration of the Regulatory Agreement. SECTION 3. FINANCING AND AC UISITIOI OF THE SITE. 3.1 Ownership of the Site. As of the ective Date of this Agreement, Participant is in escrow to acquire the Site from the Seller an as such Participant qualifies as an "owner- participant" within the meaning of the Commun' Redevelopment Law (Health & Safety Code §33000 et seq.). Participant's financing of the a quisition of the Site includes Participant's equity and the Agency Loan. 3.2 A=ncy Financial Assistan . The Agency, in accordance with the terms of this Agreement, shall provide to Participant the gency Loan. Participant has represented to Agency that TWO HUNDRED EIGHTY-FIVE T OliSAND DOLLARS (S285,000.00) is needed to acquire the Site, TEN THOUSAND DOL ARS ($10,000.00) is needed for closing costs, and the remaining FIFTY-FIVE THOUSAND D LLARS (S55,000.00) is needed for rehabilitation costs. Upon satisfaction of all conditions pre dent (or waiver by Agency) to Agency's obligation to disburse the Agency Loan under this eement, Agency shall deposit up to TWO HUNDRED NINETY-FIVE THOUSAND DOLL S (S295,000.00) of the Agency Loan funds into Escrow for disbursement to Participant at Close f Escrow (Participant shall provide Agency's Executive Director with notice of the exact amo t Agency is to deposit), with the remainder to be disbursed to pay for the costs of rehabilitation of he Site pursuant to the terms of Section 4.20). 7 SF-2000 Agree:OCCH:OPA 02i25;-'00 3.3 Form of Agency Financial Assistance; Purpose of Note and Security. The parties hereto expressly acknowledge that the Agency Loan funds to be provided to Participant under this Agreement is intended to be a self-liquidating loan, assuming Participant's performance of its obligations hereunder. In the event Participant is in material default of any of its obligati s hereunder, including its obligations under the Regulatory Agreement, Agency's sole and ex sive remedy shall be to foreclose under the Agency Deed of Trust. 3.4 Escrow. This Agreement, once deposited in Escrow, shall const' to joint escrow instructions of Agency and Participant. The Escrow agent is hereby empower to act under the Agreement and upon indicating its acceptance in writing to Agency and Part' ipant within five (5) days after receipt of this Agreement; provided, however, that any underta i g by the Escrow agent of any of the acts or services set forth in this Agreement shall constitute ceptance of the obligation to perform as Escrow agent under this Agreement. /addme to the Escrow instructions contained herein shall be in writing and signed by bothd P icipant. (a) Closing Date. On or befoestablished in the Schedule of Performance, the parties shall satisfy the conditions deSections 3.5 and 3.6 and complete the Close of Escrow. If, for any reason, the Close of not occurred by the date provided therefore in the Schedule of Performance, either parrynate this Agreement, by providing notice of termination to the other party. (b) Delive of Documents andPartici ant. On or before twelve noon on the last business day prior to the scheduled Oosing Date, Participant shall deposit or cause to be deposited with the Escrow agent the followin (1) the Grant Dee executed and acknowledged by the Seller; (ii) the Note, ex cuted by Participant; (iii) the Agen Deed of Trust, including the Rider thereto, executed and ac wledged by Participant; (iv) the gulatory Agreement, executed and acknowledged by Parti ipant; and (v) A funds, documents, and deposits Participant is required to deposit with Escrow agent in order to close the Escrow conveying e Site to Participant. (c) Deli ery of Documents and Funds by Agenc . On or before twelve noon on the last business day prio to the scheduled Closing Date, Agency shall deposit or cause to be deposited with the Escrow agent the following: ,1) the Agency Deed of Trust including the Rider thereto, executed and acknowledged by Agency; 8 SF-2000 AgUMOCCIf:OPA 0212500 (ii) the Regulatory Agreement, executed and acknowledged by Participant; and (iii) the portion of the Agency Loan funds described in Section 3.2. (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) any deed of trust from the Construction/Permanent Lender; (iii) the Agency Deed of Trust; and (iv) the Regulatory Agreement. One or more Subordination Agreements, if required to effect the pro r priority of the Agency Deed of Trust and Regulatory Agreement, shall be recorded at the di tion of Participant in accordance with the terms of this Agreement. (e) Escrow Agent Duties. The Escrow agent shall (1) record a documents as provided in subparagraph (d); and (ii) at Closing, deliver the original promisso note to Agency and a conformed copy of same to Participant, and upon recordation deliver to gency the original of the Agency Deed of Trust and the Regulatory Agreement and a confo ed copy of same to Participant. (f) Interest Bearing Accounts. Escrow agent s 11 hold all funds received in an interest bearing account with the interest accrued paid at Closi to the party depositing such funds. (g) Title Insurance. Escrow agent shall liver to Agency at Closing a CLTA standard form owner's policy of title insurance in the a unt of THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00), issued by a title i surer acceptable to Agency, insuring in favor of Agency the priority of the Agency Deed of Trust d Regulatory Agreement in accordance with the priority established by this Agreement. The ost of said policy shall be shared equally between the parties. 3.5 Agency's Conditions to Closing. Agency's obligations to deposit the portion of Agency Loan funds described in Section 3.2 in E crow for disbursement to Participant at Closing shall be conditioned and contingent upon satisfa tion, or Agency's waiver of each of the following conditions precedent (collectively, the "Agency' Conditions to Closing"): (a) Agency shall have in its account at least TWO HUNDRED NINETY- FIVE THOUSAND DOLLARS ($295,000A) of HOME funds; (b) Participant sha 1 have deposited in escrow not less than THIRTY THOUSAND DOLLARS ($30,000.00) in equity or demonstrate evidence to Agency of Participant's binding commitment to provide equity to the project (e.g., Board of Directors Resolution) (see Section 5.12); (c) Participant has deposited in escrow all of the funds and instruments required of it by this Agreement in order to close the Escrow; 9 SF-2000 Agrec:OCCM OPA 02i25;00 (d) Escrow agent, at Closing, holds and will deliver to Agency the Note, Deed of Trust, Regulatory Agreement, and Title Insurance Policy. (e) Participant shall deliver evidence acceptable to the Agency Executive Director that Participant has obtained the insurance policies as required by Section 4.3 of this Agreement. (f) Participant shall deliver to the Agency a good standing certificate issu by the California Secretary of State's office indicating that Participant exists in good standing the time of the proposed Close of Escrow. (g) The Agency shall determine that Participant is in full comp ' ce with the terms and conditions of this Agreement and all documents and instruments refe ed to herein or executed by Participant in furtherance of this Agreement. In the event anv of the Agency's Conditions to Closi are not satisfied (or waived by Agency), Agency may cancel the Escrow and terminate this greement by delivering thirty (30) days prior written notice to Participant and the Escrow age t. Participant may nullify Agency's notice to terminate if, within such thirty(30) day period P ' ipant (at no cost to Agency) cures any unsatisfied Agency's Conditions to Closing and notifies th Escrow agent of such cure. In the event of termination pursuant to this Section, (1) the Escrow all be cancelled and any funds deposited by Agency shall be returned to it with any accrued inte st earned on such funds; (ii) Participant shall be responsible for any escrow cancellatio fees imposed by the Escrow agent; and (iii) this Agreement shall be terminated and the parties ereto shall have no further rights or obligations hereunder. 3.6 Participant's Conditions to Closipg. articipant's obligations to close Escrow shall be conditioned and contingent upon satisfactio , or Participant's waiver of each of the following conditions precedent(collectively, the "Parti p ant's Conditions to Closing"): (a) The Seller has signed d acknowledged the Grant Deed and have deposited same in Escrow; (b) Agency has deposited i escrow all of the funds and instruments required of it by this Agreement in order to close the Esc ow, including but not limited to the portion of the Agency Loan funds described in Section 3.2, he Agency Deed of Trust, Regulatory Agreement, and such Subordination Agreements as may be required to effect the priority required by this Agreement; (c) All conditions t Closing set forth in (i) the agreements and any amendments thereto between Participan and the Seller foi conveyance of the Site; and (ii) agreements and financing documents pe aining to Participant's financing of the acquisition of the Site, including as pertaining to financing y the Con struction/Permanent Lender, have been satisfied (or waived by the appropriate party). 10 SF-2000 Agree:OCM OPA 02nl i00 , In the event any of the Participant's Conditions to Closing are not satisfied or waived by Participant), and provided Participant has fully performed its obligations hereunder, Participant may cancel the Escrow and terminate this Agreement by delivering thirty(30 days prior written notice to Agency and the Escrow agent. Agency may nullify Participan{{'s notice to terminate if, within such thirty (30) day period Agency (at no cost to Participant) cures any unsatisfied Participant's Conditions to Closing and notifies the Escrow agent of uch cure. In the event of termination pursuant to this Section, (1) the Escrow shall be canlled and any funds deposited by Participant shall be returned to it with any accrued interest earned on such funds; (ii) Participant shall be responsible for any escrow cancellation fees imposed by the Escrow agent; and (Ili) this Agreement shall be terminated and the parties hereto shall have no further rights or obligations hereunder. 3.7 Broker's Fees. Participant and Agency shall each indemnify, defend, and hold harmless the other from any claims or damages for payment Y(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. 3.8 Subordination Agreements. Pursuant///oSection 33334.14 of the Health and Safety Code, Agency is permitted to subordinate the Zgencv Deed of Trust and the Regulatory Agreement to superior deed of trust and regulatory agreements, including but not limited to the Construction/Permanent Lender's deed of trust, al�l such other and related documents as such lender(s) may require, if certain findings are made and certain written commitments are obtained. In accordance with said Section, the Agency herelyv finds that no economically feasible alternative method of financing the Project on subst#sally comparable terms and conditions without subordination is reasonably available and the Agency has obtained written commitments to protect the Agency's investment in the event of default. Therefore, the Agency hereby agrees to subordinate the Agency Deed of Trust and lie Regulatory Agreement to the Deed(s) of Trust of the Construction/Permanent Lender, and suY other and related documents as such lender(s) may require, in an amount the Agency determines is reasonably necessary to rehabilitate the site. Participant may apply to Agency to incr&se said indebtedness, which approval the Agency shall not unreasonably withhold. The priority of/such deeds of trust shall be effected through the order of recordation of documents as set forh in Section 3.4(d). Such subordination agreement shall provide for: (1) A right of the Agency to cure a default on the Deed(s) of Trust of the Construction/Permanent Lender(ii) A right of the Agency to negotiate with any lenders after notice of default from the lender; (iii} An agreement that if prior to foreclosure of any of said loans, the Agency takes title to the Site and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of the transfer of title to the Agency; and (iv) A right of the Agency to purchase the Site from the Participant at any time after a default on the loan. If a Subordination Agreement id required to effect the foregoing order of priority, such subordination agreement shall be generally in the form set forth as Exhibit "H". I i 11 SF-2000 Agree:OCC}I:OPA 0212 5I00 3.9 Construction/Permanent Deed of Trust. (a) After the Close of Escrow, Participant may obtain a loan fro a construction/permanent lender to be used exclusively for the rehabilitation of the Site pursuant to this Agreement. Such loan may be memorialized by a note and a Construction/Permanen eed of Trust and shall not exceed FIFTY THOUSAND DOLLARS ($50,000.00). (b) Within 90 days after the Agency issues the Release/of Construction Covenants, Participant shall cause to be prepared and shall submit to the Agency for reasonable approval a cost certification(the"Cost Certification'), setting forth all Project-Costs, certified by the Chief Financial Officer of Participant. In the event thp actual total Project Costs, as certified by Participant and approved by Agency, are less than �F1 THOUSAND DOLLARS ($55QW.00), the balance of the Agency Loan shall be reduced by the same amount, and the Agency and Participant will cause a reduced Agency Note, Agency Deed of Trust and related instruments to be executed and recorded. , 3.10 Environmental Issues. Prior to close of escrow, Agency will,conduct an environmental review of the Site in accordance with the California Environmental Quality Act ("CEQA") and HUD regulations at 24 CFR, Part 58. Using these regulations as a guide; as in past projects, Agency will undoubtedly determine that the Project is "categorically exempt" under both CEQA and the National Environmental Policy Act of 1969 (`NIEPA");' and therefore not subject to further, more complicated environmental assessment. Agency s environmental review, while thorough, should not be considered by Participant as exhaustive`or as all-inclusive as, for example, a Phase I due diligence exercise. As a consequence, Participant agrees to indemnify, defend and hold harmless Agency, its officials, officers, employees aid agents, from all claims, lawsuits, liabilities and costs (including but not limited to penalties, fi 'es and monetary sanctions) arising from the storage of hazardous materials on the Site, or contamination of the Site (including but not limited to soils or groundwater contamination) from any cause or source. Participant further agrees to provide Agency with any notices, orders, reports, or directives concerning environmental matters that may affect the Site prior to the funding of the Agency Loan. r SECTION 4. DEVELOPMENT OF THE SITE. 4.1 General. The Project shall consist of rehabilitation of an existing four-unit apartment building on the Site and the use of the Site as an affordable rental apartment complex in accordance with this Agreement and the Regulatory Agreement. r 4.2 Construction of the Project. r (a) Development in Accordance with Approved Project Plans and Permits. Participant shall undertake the Project and rehabilitate the Site in accordance with this Agreement, the Scope of Developmeht, and the Approved Project Plans and Permits and any changes thereto as r 12 SF-2000 Agree:OCCH-OPA 02 25100 r may be subsequently approved in writing by both Participant and Agency and, if necessary, City. As completed, the Project shall comply with all applicable laws and ordinances of all governmental authorities, including, without limitation, all Federal Housing Quality Standards as set forth at Section 982.401 of Title 24 of the Code of Federal Regulations. All Units must be rehabilitated no later than twenty-four{24} months from the close of escrow. This time period maybe extended but only by written agreement of the parties, which agreement shall be deemed a mddification of this Agreement. r' (b) Agency Approvals. Participant will furnish to the Agency a list of proposed repairs and improvements to the Site prior to submittal of plans to the City. The Agency will have the right to review and approve the list prior to the start.'of any rehabilitation work. Participant shall provide to Agency an executed construction contract with a contract price that is consistent with the Project Budget. Upon request, the construction`contract, together with all other contracts for services necessary to construct the Project shall'be submitted to the Agency for approval. The Agency shall approve the contracts if they are consistent with the Project Budget. Participant will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department, where applicable. I (c) Evolution of Project Plans, On or before the date set forth in the Schedule of Performance, Participant shall submit to City, and shall use reasonable efforts to obtain approval of, the Approved Project Plans as may be required for the rehabilitation work, and Permits. including City approval of, preliminary, ande thereafter final drawings and specifications for development of the Site in accordance with tlpe Scope of Development, and all in accordance with the City's requirements. The term preliminary and final drawings shall be deemed to include site plans, building plans and elevations, grading plans, if applicable, landscaping plans, parking plans, material pallets, a description of structural, mechanical, and electrical systems, and all other plans, drawings and specifications as City a �d Agency customarily require for such a Project. Final drawings will be in sufficient detal to obtain a building pennit. Said plans, drawings and specifications shall be consistent w th the Scope of Development and the various development approvals referenced hereinabove,yxcept as such items may be amended by City(if applicable) and by mutual consent of Agency and articipant. Participant shall not be in default of this Agreement due to any delay of Agency o City processing any plans or permit applications submitted by Participant. (d) Other Governmental Permits. Participant shall, at its own expense and before commencement of construction or rehabilitation of any buildings, structures, or other work of improvement upon the Site41ernmental secure or cause to be secured any and all permits and approvals which may be required by any agency affected by such construction, development, or work to be performed by Parttr�pant pursuant to the Scope of Development, including but not limited to, necessary building permits and all approvals required under the California Environmental Quality Act ("CEQA"). In constructing and developing the Project; Participant shall comply with all applicable developmen standards in City's Municipal Code and shall comply with all building code, landscaping, signage, d parking requirements (except as may be permitted through approved variances and modifc ions). 13 SF-2000 Agree:OCCUI:OPA 02/25/00 (e) Approval by Agencv. The Agency shall approve or disapprove any submittal made by the Participant pursuant to this Agreement within ten (10) days after such submittal. Any disapproval shall state in writing the reason for the disapproval and the changes which the Agency requests to be made. After Participant resubmits the corrected submittal, Agency shall have an additional seven (7) days for the review of the resubmittal but if the Agency disapproves the resubmittal, then the cycle shall repeat, until the Agency's approval has been obtained. (f) Agency Assistance. So Iong as Participant is not in material efault of any term or provision of this Agreement, Agency agrees to provide reasonable a istance to Participant, at no cost to Agency, in the processing of Participant's submittals requ* ed under this Agreement in order that Participant may obtain a final City action on such matter n or before the date set forth in the Schedule of Performance; provided that Agency does not rrant or represent that such approval shall be obtained. (g) Cast of Rehabilitation. Participant (with the ssistance of the Agency Loan) shall bear all costs for the Project, including,but not limited to a and all costs for preparing or obtaining the Approved Plans and Permits, environmental remed' Lion, interim and permanent financing, broker's and leasing commissions, and fees or charges or development and building, except as specifically provided herein. (h) Project Budget. Participant shall de elop the Project in accordance with the Project BudgetlPro Forma attached hereto as Exhibit "Y'. 0) Project_ Schedule. Participa shall commence and complete the construction of the Project within the times set forth in t Schedule of Performance. (j) Progress Pay1nents. Not la r than thirty (30) days after commencement of construction, and every 30th day thereafter until t e Project has been completed, Participant may submit a written request to Agency for a progress ayment. Each request for a progress payment shall be accompanied by lien or partial lien releas s from any contractors, subcontractors, materials suppliers, or equipment suppliers supplying w rk, materials or equipment to the Project. The FIFTY-FIVE THOUSAND DOLLARS (S55 00.00) left remaining from the amount of the Agency Loan (reference Section 3.2) shall b used by Agency to pay to Participant the latter's requests for progress payments. If Participa is request for a progress payment complies with the requirements of this Section 4.20), Agency hall pay the same within ten (10) days after receipt of the request. 4.3 Insurance. Participan shall procure and maintain, at its sole cost and expense, until the date that Agency issues or is r quired to issue the Release of Construction Covenants, the following policies of insurance: (a) Worker's C m ensation Insurance. Pursuant to California Labor Code Section 1861, Participant acknowled es awareness of Section 3700 et seq. of said code, which requires every employer to be incur d against liability for workers' compensation. Participant covenants that it will comply with such laws and provisions prior to commencing any work of 14 SF-2000 Agree:OCCH:OPA 02/25/00 construction or rehabilitation on the Site. Participant shall maintain such Workers' Compensation/ Insurance in an amount not less than ONE HUNDRED THOUSAND DOLLARS (S100,000) bodily injury, each occurrence, ONE HUNDRED THOUSAND DOLLARS (S100,000) bodily injury by disease, each employee, and TWO HUNDRED FIFTY THOUSAND DO(LARS (S250,000.00) bodily injury by disease, policy limit, at all times incident thereto, informs and underwritten by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Participant shall require all subcontractors to provide such Workers' Compensation Insurance for all of the subcontractor's employees. Participant shall furnish Agency with a certificate of waiver of subrogation under the terms of the WAkers' Compensation Insurance and Participant shall similarly require all subcontractors to waive subrogation. (b) General_Liability Insurance. Participant 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 ONE MILLION DOLLARS (S1,000,000.00), combined single limit. Such insurance shall a o include automotive bodily injury and property damage liability insurance. All such insur ce shall be provided by insurance companies admitted in California, or if not admitted in California then reasonably acceptable to Agency. Such insurance shall name the City and Agency//and their officers, agents, and employees acting in their official capacity, as additional insureds/pursuant to a pre-1990 CG 20 10 11 85 endorsement form. In the event of aggregate coverage,-such limit shall be no less than ONE MILLION DOLLARS (S 1,000,000.00). Participantts�hall require its insurer to waive its subrogation rights against Agency and shall provide certifi7an of insurance evidencing same. (c) Certificates of Insue Additional Insured Endorsements. Prior to performance of any work upon the Site, Part cipant shall furnish to Agency certificates of insurance and additional insured endorsements evZor)rsements cing the foregoing insurance coverages as required by this Agreement. Such certificates and e shall be subject to the reasonable approval of the City Attorney and shall provide th�iame 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 p or written notice to Agency. 4.4 Indemmficatio . During any period of construction of any of the Project pursuant to this Agreement an J until such time Agency issues or is required to issue the Release of Construction Covenants, Participant agrees to and shall protect, defend, indemnify and hold the Agency and City harmless frbm and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees ah court costs) arising from or as a result of(i) Participant's failure to perform any obligations at and when required by this Agreement or any document referred to herein, and (ii) the death f 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 csed by the acts of, or any errors or omissions of, the Participant or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Participant shall not Ve responsible for, and the Agency shall protect, defend, hold harmless and indemnify Participant(against any liability, loss, damage, cost, or expense (including reasonable attomey's fees and curt costs) arising from or as a result of the active concurrent negligence. sole negligence or sole willful misconduct of the Agency or the City or their respective members, officers, officials, employees, agents, representatives, servants, or contractors. 15 SF-2000 Agree:OCCH-OP 0212500 4.5 Hazardous Substances. Participant, from and after the Close of Escrow, and u it a transfer, sale, or assignment of the Site upon which the following covenant shall then b the obligation of the transferee, purchaser, or assignee, shall indemnify, defend, and hold harmless Agency and its officers, employees, agents and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities (including penalties, fines, and monetary sanctions) o s arising from a violation of state or federal law pertaining to(i)the storage of hazard materials on the Site or(ii)contamination of the Site by a release of hazardous materials. Participant,prior to the Closing Date, shall provide to Agency a copy of any notices, orders, or repo/s concerning the presence of any hazardous materials on or affecting the Site that is in Participant's possession. For the purposes of the foregoing, the term "hazardous materials" shall mean Sny hazardous or toxic substance, material or waste which, as of the date of Close of Escrow, is/regulated by the State of ai California, or the United States Government, and including asbestos d any material containing asbestos. 4.6 Security Financing;Right of Holders. (a) Permitted Encumbrances. Particip2n t, prior to the date Agency issues or is required to issue the Release of Construction Coven�a4its, 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 acquisition of the Site and construction of the Project thereon wi�Kut the consent of the Agency provided such conveyance (i) is for the purposes permitted her and (ii) is given to a financial or lending institution or other acceptable person or entity capable of performing or causing to be performed Participant's obligations under this Agreement,/ including without limitation a pension fund, insurance company, or real estate investme t�trust. Conveyances for financing purposes not meeting the foregoing requirements shall be eject to the prior approval of the Agency's Executive Director, which approval shall not be unreasonably withheld. (b) Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust or other sec ty interest authorized by this Agreement shall in no way be obligated by the provisions.of this Agreement to construct or complete the improvements or to guarantee such construction or co pletion; nor shall any covenant or any provision in the Regulatory Agreement be construe to so obligate such holder. (c) Notice, f Default to Mortgage, Deed of Trust or Other Securily Interest Holders; Right to Cure. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default/by Participant in completion of construction of the improvements, Agency shall at the same tim 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 suc holder shall (insofar as the rights of Agency are concerned) have the right, at its option within ni,ety(90)days after the receipt of the notice,to commence and thereafter to diligently proceed to cur or remedy such default and add the cost thereof to the security interest debt and the lien on its se urity interest. Any holder completing the improvements in accordance with this Agreement shal be entitled to a Release of Construction Covenants upon written request made to Agency. 16 SF-2000 Agree:OCCFI:OPA 02/25/00 4.7 ReIease of Construction Covenants. Upon satisfactory completion of th roject, Agency shall issue to Participant a Release of Construction Covenants. The elease of Construction Covenants shall be, and shall so state, a conclusive determination o satisfactory completion of the Project required by this Agreement, and of full compliance with t terms of this Agreement relating to commencement and completion of the Project. The Release f Construction Covenants is not a notice of completion as referred to in California Civil Code Se ion 3093. If Agency refuses or fails to furnish a Release of Construction Covenants upon completion of the Project, Agency, after written request from Participant, shall, wit (n fifteen (15) days of Participant's written request, provide Participant a written statement of the reasons Agency refused or failed to furnish a Release of Construction Covenants. The statement Mall also contain a detailed description of the specific actions Participant must take to obtai a Release of Construction Covenants. If the Agency shall have failed to provide such writte statement within fifteen (15) days. Participant shall be deemed entitled to the Release of Con ruction Covenants. If Agency refuses or fails to furnish the Release of Construction Covenants r the reason that specific items or materials are not available or landscaping is not complete, gency shall issue the Release of Construction Covenants upon the posting by Participant wit Agency of a cash deposit, bond or irrevocable letter of credit (in a form acceptable to Agency) ' an amount representing the fair value of the work not yet completed. 4.8 Mechanics Liens StopNotices and i otices of Com letion (a) If any claim o/pa' or file against the Site or the Project, or a stop notice is served on any lender or other third parrn Lion with the Project, then the Participant shall, within twenty (20) days after such filin . e, either pay and fully discharge the lien or stop notice, effect the release of such lien ootice by delivering to the party entitled thereto a surety bond in sufficient form and amorovide other assurances satisfactory to the Agency that the claim of lien or stop notice will or discharged. (b) If the Participls to discharge any lien, encumbrance, charge, or claim in the manner required in subsectif this Section 4.8, then in addition to any other right or remedy, the Agency may (but shander no obligation to) require the Participant to immediately deposit with the Agency tie amount necessary to satisfy such lien or claim and any costs,pending resolution thereof. The�gency may use such deposit to satisfy any claim or lien that is adversely determined against the P icipant. (c) The Parti ipant shall file a valid notice of cessation or notice of completion upon cessation of const ction on the Project for a continuous period of thirty(30) days or more, and take all other reason le steps to forestall the assertion of claims or liens against the Project. The Agency may (but h no obligation to) record any notices of completion or cessation of labor, or any other notice that e Agency deems necessary or desirable to protect its interest in the Project. ' 17 SF-2000 Agree:OCCH:OPA { 02::2>f00 SECTION 5. USE OF THE SITE. 5.1 No Inconsistent Uses. Participant covenants and agrees, for itself, its success s, its assigns, and every successor in interest to the Site, or any part thereof, that for the p nod beginning on the Close of Escrow and ending on the expiration date of the Regulatory Agr ment, Participant and such successors shall not devote the Site to uses inconsistent with the plicable zoning restrictions, this Agreement, and the Regulatory Agreement; provided that, in e event of any inconsistency, the provisions of the provisions of the Regulatory Agreement sha prevail over this Agreement. 5.2 Regulatory Agreement. At the Close of Escrow the Regulat Agreement shall be recorded against the Site in the priority set forth in the Section 3.4(d). 5.3 Relocation. (a) Relocation Plan. As the Project is a " habilitation-in-place," no relocation of tenants living on the Site as of the Effective Date of this Agreement is contemplated by the parties hereto or is required to occur as a result of this Agreem i�it. In the event, however, that off-Site relocation of existing tenants becomes necessary as a result�of the Project, Participant, prior to such off-Site relocation, shall submit a relocation plan to hAgency for review and approval ("Relocation Plan"). The Relocation Plan shall include the na e, gender, age, ethnicity, household income, and amount of relocation payment to be paid; proved, however, that Participant shall not be obligated to provide any of the foregoing referenced ersonal information about relocatees if such relocatees refuse to provide such information or the athering or provision of such information is contrary to applicable law. Participant shall be obli ted to meet the tenant notice requirements of applicable relocation law and shall provide the ; gency with true and correct copies of such notices to tenants. Participant shall also retain all re ired records and the originals and/or copies of tenant notices in its files as mandated by applicabl aw. (b) Relocation Cost. P icipant shall be obligated for the payment of all relocation benefits and costs identified in th Relocation Plan, as well as relocation benefits and costs that arise from the acquisition or rehab' itation of the Site beyond those obligations identified in the Relocation Plan. Participant shall in d mnify, defend, and hold harmless the Agency from and against any claims for relocation an/the ayment of relocation benefits that are the obligations of Participant under this Agreement. thstanding the above, Agency shall provide relocated tenants Section 8 HUD housing cees, which Participant may use to offset its relocation obligations. 5.4 Maintenance of thAll Units must meet Federal Housing Quality Standards (24 CFR § 982.401) while occuFlon. her, Participant shall maintain the Site in accordance with the terms of the Regulatory Agre 5.5 Nondiscriminere shall be no discrimination against or segregation of any person, or group of perso , on account of race, color, creed, religion, sex, marital status, national origin or ancestry in th sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereo q 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 18 SF-2000 Agree:OCCH:OPA 02/25 00 the selection, location, number, use or occupancy of tenants, lessees, subtenants, suble ees or vendees of the Site, or any part thereof. 5.6 Form of Nondiscrimination and Nonseare ation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis f race, color, religion, ancestry, national origin, sex or marital status of any person. All such eeds, leases or contracts shall contain or be subject to substantially the following no iscrimination or nonsegregation clauses: (a) In Deeds: "The grantee herein covenants by an for himself, his heirs, executors, administrators and assigns, and all persons claiming under or hrough him, that there shall be no discrimination against or segregation of, any person or grou of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the sAction, location, number,use or occupancy of tenants, lessees, subtenants, sublessees or vendees '� the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases: "The lessee herein co enants by and for himself, his heirs, executors, administrators and assigns, and all persons clai ' g under or through him, and this lease is made and accepted upon and subject to the following co ditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, to re or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming un er or through him, 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 land herein leased." (c) In Contracts: "Th e shall be no discrimination against or segregation of account��5f race, color, religion, ancestry, national origin, sex, or any person, or group of persons on marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or anyTocovenants. n claiming under or through him, establish or permit any such practice or practices of discrimi or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 5.7 Effect and Duratio The Participant has, concurrently with the execution of this Agreement, executed in recordable form the Regulatory Agreement. Every covenant and condition and restrictio contained in the Regulatory Agreement shall remain in effect for thirty (30) years, from the Effective Date of this Agreement, except that the covenants against discrimination set forth in Sections 51.5 and 5.6 shall remain in effect in perpetuity. 5.8 Creation of Cap'I I Reserve and Residual Receipts Accounts. No later than after the close of escrow,' articipant shall create two separate accounts: a Capital Reserve 19 SF-2000 Agree:OCCH:OPA 02-25%00 Account; and a Residual Receipts Account. The purposes of each account are set forth in Sections/ 5.9 and 5.10. No later than .f{, fy d��_ days after each account has been created, Participant shall provide to Agency a pro forma statement concerning each account, for Agency's review and approval. At anytime thereafter during the term of this Agreement, Agency, o ten (10) days prior written notice to Participant, may request that Participant submit to it up ed, revised Capital Reserve Account and/or Residual Receipts Account statements. Age v, at its own expense, may audit any updated, revised Capital Reserve Account and/or s idual Receipts Account statements submitted to it by Participant. 5.9 Capital Resemes, Agency Loan Repayment. Comm cing on {a_�O , 2003, and every succeeding year during the term of this Agreement, P -icipant shall deposit ONE THOUSAND TWO HUNDRED DOLLARS (51,200.04) or fifty pe- ent of Net Operating Income for the previous one-year period (whichever is more) into a res �e for capital repairs. Should Participant believe Project revenues to be insufficient to pMace f Participant to make such a full deposit in any year, Participant may appeal to the Agency to the payment reduced, suspended, renegotiated, or forgiven. Participant shall carry the burden�f proof in this regard. Agency shall have the unfettered discretion to reduce, suspend, renegoti e, or forgive the payment based on the evidence submitted by Participant. 5.10 Payment of Portion of Residual Rec ►pts. (a) Payment to Agency- Co 'mencing on c� Q , 2003, and every succeeding year during the term of this Agr ement, Participant shall pay to the Agency ONE THOUSAND TWO HUNDRED DOLLARS (S ,200.00) or fifty percent (50%) of Net Operating Income for the previous one-year period (whit ever is more) for repayment of the Agency Dote. Should Participant believe the Project revenu be insufficient to permit Participant to make such a payment in any year, Participant may ap-eal to the Agency to have the payment reduced, suspended, renegotiated, or forgiven. Participant shall carry the burden of proof in this regard. Agency shall have the unfettered discretio Ito reduce, suspend, renegotiate, or forgive the payment based on the evidence submitted by the P icipant. Once the Capital Reserve Account reaches the cumulative total determined to be ade ate by Agency and Participant, Participant shall pay to Agency TWO THOUSAND FOUR f�iVDRED DOLLARS (S2,400.04) or one hundred percent (100%) of the Net Operating Income for the previous calendar year (whichever is more). If a payment is required by Participantypursuant to the terms hereof, Participant shall make such payment no later than ninety (90) days following the end of the reporting year (calendar year or fiscal year). If the first or final payment is based on a portion of a year, the payment shall be pro rata based on a 360-day year. r (b) Definition of Net Operating Income. As used herein, the term "Net Operating Income" shall mean, or any reporting period (calendar year or fiscal year), (a) all income derived by Participant from th Site, including without limitation all tenant rent, less (1)payments of principal and interest, if any, r quired to be paid in such year by Participant with respect to any note, mortgage, or deed of trust wi respect to the Site or Project, (ii)all expenses actually incurred(or to be incurred if accounted fo on an accrual basis) by Participant in leasing, managing, operating, maintaining, and repairing#Ie Site, (iii) all capital expenses incurred pertaining to the Site; (iv) the deposits into the Capital Reserve Account; and (v) property management fees, administrative costs, 20 SF-2000 Agree:oCCH:OPA 02125100 salaries, benefits, overhead costs, and such other and further operating and man2avearly !basis, ses incurred in operating the Site. Depreciation expenses shall not be a reduction agaNetng Income. 5.11 Financial Statements. Participant shall submit to Agency, o a true and correct copy of Participant's audited financial statements for the .ect. Before such statements are submitted to Agency, they should (but are not required to) b eviewed and certified by Participant's Board of Directors. After receipt of Participant's audite financial statements for the Project, Agency may, at its cost, request additional financial ana ses or obtain a third party review of Participant's financial statements for the Project to veri the accuracy of Participant's payments made to the Agency pursuant to Section 5.10 or the eposits by Participant into the Capital Resen-e Account pursuant to Section 5.9. 5.12 Operation of Project. Borrower shall le, e, operate and manage the Project in full conformance with the terms of the OPA and specifically the Regulatory Agreement. Further, all of the Units in the Project shall be designated as HO'v1E Units and the rents for these units shall not exceed the "low income' rent defined by the HO -E Program. as set forth at Section 92.252 of Title 24 of the Code of Federal Regulations. As sta�6d in Section 3.5(b), prior to close of Escrow, for the purposes of operating and managing the Project, Participant. subject to the Agency's review and approval, shall have contributed THIRTY HOUSAND DOLLARS (S30,000.00) in equity cash, or rehabilitation labor with a reasonable value of THIRTY THOUSAND DOLLARS ($30,000.00), or strictly defined and quantifiable services with a reasonable value of THIRTY THOUSAND DOLLARS ($30,000.00). Not later than sixty (60) days after close of Escrow, Participant shall submit to Agency, for Agency's review and approval. an annual budget outlining each proposed service to be offered by Participant in operating and managing the Project, and the anticipated cost of each such service. The first such proposed budget shall cover the period from the close of Escrow to the beginning of the second year of the term of this Agreement. Not later than sixty (60) days after the beginning of the second year of the term of this Agreement, and for every year thereafter during this Agreement's term, Participant shall submit an annual, proposed budget to Agency, for the latter's review andlapproval. 5.13 Lead-Based Eaint. Borrower shall ensure that it and its contractors and subcontractors shall not use lead-based paint in the construction or maintenance of the Property. Borrower shall insert his provision in all contracts and subcontracts for work performed on the Project which involve the application of plaint. Borrower will test both properties for the presence of lead-based paint as required by HUM regulations. Borrower will furnish copies of test results to Lender. Borrower will remediate any asbestos or lead-based paint hazards where the level of that substance is found to be in excess of acceptable thresholds. 5.14 Bamers to the Disabled. Borrower shall ensure that the Project shall be developed and the Property shall be maintained to comply with all applicable federal state, and local requirements for access for disabled persons. i i 21 SF-2000 Agree:OCCi[-OPA 02l2900 SECTION 6. DEFAULTS AND REMEDIES. / 1 6.1 Participant Defaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Participant hereunder if after receiving written notice from Agency as provided in Section 6.3 below identifying such event, Participant 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, Participant commences to cure said event within thirty(30) days and diligently and in good faith continues to cure the event of default: (a) Participant 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) Participant fails to observe o"r perform any material term of this Agreement or any agreement incorporated hereunder by,`reference including, but not limited to, the Regulatory Agreement, the Note, the Deed of Trust, oVihe Subordination Agreement(if applicable), within the time set forth in this Agreement or any of the documents referred to herein; or (c) Participant knowingly and intentionally makes or delivers to Agency any statement,report, or certificate that is not true or,correct in any material respect. I 6.2 AgencyDefaults. The occurrence of any one or more of the following events shall constitute a "Material Default" by Agency hereunder if, after receiving written notice from Participant as provided in Section 6.3 below identifying such event, Agency fails to cure said event within thirty(30) days; provided that if such default is not reasonably capable of being cured within thirty (30) days, Agency commences to cure said event within thirty(30) days and diligently and in good faith continues to cure the event of default: r (a) Agency fails to observe or perform any material term of this Agreement within the time set forth in this Agreement, including but not limited to timely deposit into Escrow of the required portion of Agency Loan funds; or i (b) Agency knowingly and intentionally makes or delivers to Participant any statement, report,or certificate-that is not true or correct in any material respect. 6.3 Notice of,Default. The non-defaulting party shall give written notice of any default under this Section Jto the defaulting party, clearly specifying the default. Copies of any notice of default given to the defaulting parry shall also be given to any permitted lender requesting such notice. Any failure or delay in giving such notice or in asserting any of either party's rights and remedies as to any defaulf shall not constitute a waiver of any default,nor shall it change the time of default, nor shall it deprive either 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. r i r 5F-2000 Agree:OCCH:OPA 02125/00 6.4 Agency's Remedies. (a) The Agency, at its option, may terminate this Agreement prior to the Close of Escrow in the event of any material default that the Participant 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 Participant 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 Agency's sole remedy shall be to foreclose on the Agency Deed of Trust pursuant to Agency's right and remedies thereunder. 6.5 Participant's Remedies. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a default/or breach of this Agreement by Agency, Participant may bring an action for specific performance of this Agreement or any term or provision hereof, or may terminate this Agreement. Part1c17t 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.' r 7.1 Participant's Warranties. Participant represents and warrants (1) that it has access to professional advice and support to the extent necessary to enable Participant to fully comply with the terms of this Agreement; (2) that it is1duly organized, validly existing and in good standing under the laws of the State of California; (3) that it has the full power and authority to undertake the Project and to execute this Agreement; (4) that the persons executing and delivery this Agreement are authorized to execute and deliver. such documents on behalf of Participant; (5) except as disclosed to the Agency in writing, there are no actions or proceedings pending or, to the best of the Participant's knowledge. threatened 'against the Participant before any court or administrative agency in any way connected with the Site or the Project which could adversely affect the Participant's ability to perform thef 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 Participant is a party or which affects the Project or any part thereof, (7) the Participant is not in default in Tespect 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 Participant has notrentered into any agreements which will adversely affect the title to the Project or the Participant's,'right to develop and use the Project as provided in this Agreement. and the Participant will not enter into any such agreements after the date hereof. { 7.2 Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 23 SF-2000 Aeree:OCCH!OPA 02!25100 7.3 Attorneys' Fees. In the event of litigation between the parties arising out of this Agreement each party shall bear its own attorneys' fees, and other costs. 7.4 Notices, Demands, and Communications Between the Parties. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if. (i) personally delivered; (11) 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: r If to Participant: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City,CA 92655 Attn: Jim Miller, President/CEO If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach,CA 92648 Attn: Executive Director Notices personally delivered or delivered by courier shall be effective shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of(1) receipt of refusal to accept delivery, or (h) 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 Participant against Agency, service of process on Agency shall be made by personal service upon Executive Director or the Secretary of Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Participant, service of process on Participant shall be made by in any manner provided by law, and shall be valid whether made within or without the State of California. 7.6 Conflicts of Interest. No member, official, or employee of Agency 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. 24 SF-2000 Agree:OCCH:OPA 02/25100 7.10 Merger of Prior Agreements and Understandings. ThisAgreement�-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, including but not limited to that certain "Deal Point Memorandum" approved by Participant and the Agency and/or City Council of the City of Huntington Beach, are merged herein and shall be of no further force or effect. 7.11 No Third Parties Benefited. Other than the general and! limited partners of Participant, 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. Participant and Agency each agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to accomplish the redevelopment of the Site in accordance with the provisions hereof. 7.13 Warranty_Against Payment of Consideration for Agreement. Except as provided in this Agreement, Participant 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 Agency Officials and Employees. No member, official, or employee of the Agency shall be personally liable to the Participant or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Participant or to its successor,or on any obligations under the terms of this Agreement. 7.15 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either 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 either party hereunder shall not be 25 SF-2000 Ame-OCCH:OPA 02/25i00 i deemed to be in default during an event of Force Majeure. An extension of time for an event of Force Majeure shall be limited to the period of such event, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. In the.event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. Times of performance under this Agreement may also be extended by mutual written agreement by Agency and Participant. In addition, the Executive Director shall have the authority on behalf of Agency to approve extensions of time not to exceed a cumulative total of one(1) year. 7.19 Inspection of Books and Records. The Agency or its designee has the right at all reasonable times to inspect the books, records, and/or other documents of the Participant pertaining to the Site and/or the Project as pertinent to the purposes of this Agreement. 7.20 Waivers. The waiver by Agency or Participant of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. , SECTION S. EXECUTION OF AGREEMENT; TIME FOR ACCEPTANCE This Agreement consists of t,,J ... (,29_) pages and ten (10) attachments which constitute the entire understanding and agreement of the parties. This Agreement does not take effect until executed by the Participant and Agency. This Agreement, when executed by the Participant and delivered to the Agency, must be authorized, executed and delivered by the Agency within thirty (30) days after the date of signature by the Participant, or this Agreement may be terminated by the Participant on written notice to the Agency. The Agency Executive Director is hereby authorized and directed to take such other and further actions, and sign such other and further agreements and documents on behalf of the Agency as may be necessary or proper to effect the terms of the Owner Participation Agreement on behalf of the Agency. (end.:- signature page follows] 26 SF-2000 Agree:OCCH:OPA 02::2500 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. "AGENCY" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Chairman ATTEST: APPROVED AS TO FORM: By: By: Z��-- " Agency Clerk p [te ncy Counsel F),j "PARTICIPANT" SHELTER FOR THE HOMELESS, INC., dba, AMERICAN LODGING, a California nonprofit corporation By: 40�pmwj�— udy Kam ann (1--lExecutive Director AND By: j Jim ler President/CEO t 27 SF-2000 Agree:OCCH:OPA 02/25/00 EXHIBIT "C" SCOPE OF DEVELOPMENT Participant's rehabilitation of an existing four-unit apartment building loca ed at 7802 Barton Lane in the City of Huntington Beach shall be undertaken as follows: 1. The rehabilitation shall be in substantial conformance with the Approved Plans and > Permits. In the event of any conflict bet-;seen the description of the Project and rehabilitation work described in this Agreement and in the Approved Plans and Permits the Approved Plans and Permits shall control. Notwithstanding the above, the rehabilitation of the Units shall result in Units meeting, at a minimum, federal housing quality standards as existing on the Effective Date of this Agreement; said standards are set forth at Title 24 of the Code o'f Federal Regulations, Section 982.401. Participant shall provide Agency with copies of all required permits under the City Municipal Code and proofs of City inspections. 2. Participant, prior to undertaking any work of rehabilitation on the Site (other than repairs immediately needed for habitability or removal of waste, debris, and general clean-up) shall submit to Agency for review a rehabilitation work list that describes the nature and order of the rehabilitation work. 3. Participant shall be responsible for testing and detecting the presence of asbestos and lead-based paint as required by HUD regulations or ariv applicable law. Participant shall also be responsible for remediating any asbestos and any lead-based paint where the levels of those substances are found to be in violation of HUD regulations or any applicable law. If Participant feels that remediation of asbestos and/or lead-basedI paint are too costly, it may request financial assistance from Agency. The decision to provide financial assistance, and the amount of such assistance, lie in the sole discretion of Agency. Copies of all test results, tenant notifications, and remediation plans shall be provided to the Agencyor its authorized representatives or consultants. 4. Agency shall have the right to independently inspect the progress of the rehabilitation work, including both interiors and exteriors of the Units, upon forty-eight (48) hours prior notice to Participant; provided that such inspections shall not interfere with Participant's rehabilitation work. In this regard, Participant shall provide access to the Units to Agency 5. Subject to Section 4.2(a) and.Exhibit D of the OPA, Participant shall complete the rehabilitation work within twenty-four(24)months after the Closing Date; unless this time period is extended by the mutual written agreement of the parties. I Exhibit"C" i Page t of 1 SF-2000 Agree:OCCH:Scope of Development i EXHIBIT "D" SCHEDULE OF PERFORMANCE ITEM OF PERFORM-kitiCE TIME FOR PERFORM,., :NCE REFERENCE 1. Participant and Agency each execute all documents Not later than twelve noon'on the §3.4(b); §3.4(c). and deposit all documents and funds into Escrow as business day immediately prior to the required by this Agreement. scheduled Closine Date. 2. Closing Date. lot later than April 30.2000 §3.4(a). 3. Participant obtains the Approved Plans and Permits Within sixty(60)days after the §4.2(a)-(e) for the Project and commences the rehabilitation Closing Date. work on the Site. 4. Participant submits a Management Plan to the Within sixty(60)days after the §4.4 of Exhibit 1 Agency. Closing Date. 5. Participants completes the rehabilitation of the Site. Within twenty-four(24)months after §4 2(i)_ commencement of the work. 6. Agency issues Release of Construction Covenants. Capon completion by Participant of the §4.7 rehabilitation work on the Site. 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 both the Participant and the Agency. The Executive Director of Agency shall have the authority to approve extensions of time without action of the Board of Directors of Agency not to exceed a cumulative total of one(1) year. Exhibit''D" Page I of I SF-2000 Agree:OCCH:Schedule of Performance 02i 1 6%O0-z I WHEN RECORDED RETURN TO: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City, CA 92655 Attn: Executive Director (Space Above This Line For Recorder's Office Use Only) (Exempt from Recording Fee Per Gov.Code Sec.6103 -See Below) This Release of Construction Covenants is recorded at the request and for the benefit of the Redevelopment Agency of the City of Huntington Beach and is exempt from the payment of the recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Its: Dated: RELEASE OF CONSTRUCTION COVENANTS WHEREAS, SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation, ("Owner"), is the owner of the fee interest in that certain real property more particularly described in the legal description attached hereto as Exhibit No. I and incorporated herein (the "Site"); and WHEREAS, by an Owner Participation Agreement (hereinafter referred to as the "Agreement") dated as of , 2000, by and between Owner and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (hereinafter referred to as "Agency"), Owner has constructed the improvements on the Site according to the terms and conditions of said Agreement; and Exhibit "E"—Release of Construction Covenants Page 1 of 5 SF:2000 Agree:OCCH:Rdease of Const-Covenants WHEREAS, pursuant to the Agreement, promptly after completion of all construction work by Owner upon the Site, Agency shall furnish Owner with a Release of Construction Covenants in such form as to permit it to be recorded in the Official Records of the County of Orange; and WHEREAS, the issuance by Agency of the Release of Construction Covenants shall be conclusive evidence that Owner has complied with the terms of the Agreement pertaining to the construction of improvements on the Site; and WHEREAS, Agency has conclusively determined that the construction of improvements on the Site has been satisfactorily completed as required by the Agreement; and NOW,THEREFORE: 1. As provided in the Agreement, Agency does hereby certify that construction of the improvements on the Site have been fully and satisfactorily performed and completed, and that such development is in full compliance with said Agreement. 2. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of Owner to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part thereof. Nothing contained herein shall modify in any way any other provision of said Agreement. 3. This Release is not a Notice of Completion as referred to in California Civil Code Section 3093. IN WITNESS WHEREOF, Agency has executed this Release as of this day of 52000. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic By: Its: ATTEST: Agency Clerk Exhibit"E" —Release of Construction Covenants Page 2 of 5 CONSENT TO RECORDATION SHELTER FOR THE HOMELESS, li11C., dba AMERICAN LODGING, a California nonprofit corporation, owner of the fee interest in the Site legally described in Exhibit No. 1 attached hereto does hereby consent to the recordation of the foregoing Release of Construction Covenants against the Site. „OWNTER" SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGNG, a California nonprofit corporation By: Judy Kampmann Executive Director AND By: Jim Miller President/CEO Exhibit"E"—Release of Construction Covenants Page 3 of 5 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public (SEAL) STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public (SEAL) Exhibit "E''—Release of Construction Covenants Page 4 of 5 EXHIBIT NO. 1 LEGAL DESCRIPTION OF SITE [TO BE INSERTED] Exhibit "E"—Release of Construction Covenants Page 5 of 5 FROM Panasonic =RX SYSTEM PHONE NO. : Feb. 09 2000 10:16AN P3 SCHEDULE A The estate or interest in the land hereinafter described or referred to covered by this report is: A FF . Title of said estate or interest at the date hereof is vested in: YAN-CHOW MA AND TAI-ANN MA, liusband and wife as joint tenants. The land referred to in this report is situated in the COUNTY OF ORANGE,.STATE OF CALIFORNIA, and is described as follows: LOT 33 OF TRACT NO. 4301, IN THE CITY OF HUNTINGTON BEACH,-COUNTY OF ORANGE,STATE OF.CALIFORNIA,'AS PER MAP REEORDED IN BOOK I77�I'AGES:'- i I AND 12, OF MISCELLANEOUS:`MAPS, IN.THE OFFICE OF THF. COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. ALSO EXCEPT THE SUBSURFACE WATER RIGHTS,BUT WITHOUT THE RIGHT OF F:NTRV TO THE SURFACE OR THE SUBSURFACE ABOVE A DEPTH OF 150 FEET AS DEDICATED ON THE MAP OF SAID TRACT. END OF SCHEDULE A w, ra . i 128633R1 calif ornia_ Counties. Title. Company FEB-09-2000 10:22 96i P.03 i Order No. Escrow No. Loan No. WHEN RECORDED MAIL TO. Redevelopment Agency of the City of Huntington Beach 2000 klain Street Huntington Beach,CA 92648 Attu: Agency Secretary SPACE ABOVE THIS LINE FOR RECORDER'S USE] EXEMPT FROXI RECORDING FEE PER GOV.CODE§61031 SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO NOTICE: THIS SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS «'ITH RIDER ATTACHED HERETO CONTAINS A SUBORDItiATION CLAUSE NNTHICH MAY RESULT IN YOUR SECURITY ItiTEREST IN THE PROPERTY BEING SUBJECT TO A LOVER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED HERETO ("Deed of Trust"), trade , 2000, between SHELTER FOR THE HOMELESS, NNC., dba AMERICAN LODGING, a California nonprofit corporation,herein called TRUST OR,%;hose address is 15161 Jackson Street,Mid«ray City,CA 92655, _,a California corporation,herein called TRUSTEE,and REDEVELOPMENT AGENCY OF THE CITY OF HUNTNNGTON BEACH, a public body, corporate and politic, herein called BENEFICIARY_ WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, County of Orange, State of California,described as: SEE EXHIBIT"A"ATTACHED HERETO together with the rents, issues and profits thereof.subject,however,to the right,power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of THREE HLNDRED FIFTY THOUSAND DOLLARS(S350,000.00)without 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 each agreement of Trustor incorporated by reference or contained herein; and(3)payment of additional sums and interest thereon which may hereafter be loaned to Trustor,or his 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 August 17, 1964,and in all other counties August 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: Subordinated Deed of Trust Page 1 of 9 SF-2000 Agree:OCCH:Sub.Deed of Trust 02!1 7/00-=1 COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 859 713 Placer 1028 3?9 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-3879 974 Sacramento 5039 124 Sonoma _067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Coltsa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa a684 1 Mariposa 90 453 San Francisco A-803 596 Tehama 457, 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2955 293 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolurme 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt Sol 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 74-1 Santa Cruz 1638 607 Yuba 398 693 lno 165 672 Nevada 363 94 Shasta 800 633 Kcm 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,temis and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 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. 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 LOR'ER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTR[ INTENT. Signature ofTrustor l SHELTER FOR THE HOMELESS,INC.,dba AMERICAN STATE OF CALIFORNIA ; LODGING,a California nonprofit corporation COUNTY OF ORANGE ; By: Judy Kampmann,Executive Director On before me, personally appeared AND personally known to me (or proved to me on the basis of satisfactory By: evidence) to be the person(s) whose names(s) is'are subscribed to the Jim Miller.PresidendCEO within instrument and acknowledged to tree that he/sheithey executed the same in his/heritheir authorized capacityjies), and that by his'her4heir signatures(s)on the instrument the persorl(s) or the entity;upon behalf of which the person(s)acted,executed the instrument_ WITNESS my hand and official seal. Signature (This area for official notarial seal) Subordinated Deed of Trust Page 2 of 9 SF-2000 Agrec_OCCH:Sub.Deed of Trust 0211&00-;tI 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 Huth 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 or 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. 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 of 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 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 be appointed by a court,and without regard to the adequacy of any security for the indebtedness hereby secured,enter upon and take possession of said property or any part thereof,in his own name sue for or otherwise collect such rents,issues,and profits,including those past due and unpaid,and apply the same,less costs and expenses of operation and collection,including reasonable attorney's fees,upon any indebtedness secured hereby,and in such order as Beneficiary may determine. The entering upon and taking possession of said property,the collecting of such rents,issues and profits and the application thereof as aforesaid,shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder,Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property,which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed,said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default,and notice of sale having been given as then required by law,Trustee,without demand on Trustor,shall sell said property at the time and place fixed by it in said notice of sale,either as a whole or in separate parcels, and in such order as it may determine,at public auction to the 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. Subordinated Deed of Trust Page 3 of 9 SF-2000 Agree:OCCH:Sub.Deed of Trust 02/16/00-#1 After deducting all costs, fees and expenses of Trustee and of 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 eonclusixe 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 pledgees.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. DO NOT RECORD REQUEST FOR FULL RECONIVEYA1tiCE TO TRUSTEE: The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed of Trust. Said note or notes,together with all other indebtedness secured by said Deed of Trost,have been fully paid and satisfied: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.an 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 Reconvevance 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 reconvevance will be made. Subordinated Deed of Trust Page 4 of 9 SF-2000 Agree:OCCH:Sub.Deed of Trust 02'1 G:'00-"I s DEED OF TRUST WITH ASSIGNMENT OF RENTS WITH RIDER ATTACHED TRUSTEE Subordinated Deed of Trust Page 5 of 9 SF-2000 Agee:OCCH:Sub.Deed of Trust 02/1600 t1 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 , 2000, by SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation ("Trustor"), and REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, 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 bettiveen the terms of this Rider and the terms of the Deed of Trust, the terms of this Rider shall control. 3. Priority; Subordination. Trustor and Beneficiary entered into that certain Owner Participation Agreement, dated , 2000 (the "OPA"), pursuant to which Beneficiary (named the "Agency" in the OPA) agreed to subordinate this Deed of Trust to the liens of the deeds of trust identified in the OPA as the Construction/Permanent 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 "H" to the OPA, 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 OPA or Regulatory Agreement. Subordinated Deed of Trust Page 6 of 9 SF-2000 Agree:GCCH:Sub.reed of Trust 02/t 7i00-=i IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Rider to Subordinated Deed of Trust With Assigiment of Rents as of the date of Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. "PARTICIPANT" SHELTER FOR THE HOMELESS, INC., dba AMERICANI LODGLNG a California nonprofit corporation By: Judy Kampmann, Executive Director AND By: Jim Miller, President/CEO BENEFICIARY: REDEVELOPMENT AGENCY OF THE CITY OF HiJNTINGTON BEACH, a public body, corporate and politic By: Chairman ATTEST: APPROVED AS TO FORM: Agency Clerk Agency Counsel v,} 1 i.sioo Subordinated Deed of Trust Page 7 of 9 SF-2000 Agree:OCCH:Sub.Deed of Trust 0211600-�i! STATE OF CALIFORINI A ) ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA } ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] Subordinated Deed of Trust Page 8 of 9 SF-2000 Agree:OCCH:Sub.Deed of Trust 02:]6'00-—,I EXHIBIT "A" TO DEED OF TRUST LEGAL DESCRIPTION OF REAL PROPERTY (TO BE INSERTED) Subordinated Deed of Trust Page 9 of 9 SF-2000 Agree:OCCH:Sub. Deed of Trust 021161:00-#l l FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: 7Ex1ectnhru-3irectvrCity Clerk (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 215 day of LI AI di , 2000, by and between REDEVELOPMENT AGENCY OF THE CITY OF HUlNTTINGTOI' BEACH, a public body, corporate and politic (".Agency") and SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation ("Participant"). RECITALS: A. Agency and Participant have entered into that certain Owner Participation Agreement, dated filAy.L� . _, 2000 (the "OPA"), concerning Participant's redevelopment of that certain real property, owned in fee by Participant, more particularly described in Attachment No. 1 attached hereto and incorporated by reference herein (the "Site"). The OPA describes the "Project" which generally consists of Participant's rehabilitation of an existing four(4) unit apartment building on the Site and subsequent management thereof as an affordable rental housing complex. B. Agency and Participant also entered into that certain Note (the "Note"), with a Note Date of 3 t , 2000, pursuant to which Agency has provided Participant with a loan in the principal amount of Three Hundred Fifty Thousand Dollars (S350,000.00) ("Loan Amount"). The Note provides for Agency's waiver and discharge of the Loan Amount by one- thirtieth (1/30) each year for thirty (30) years, subject to a minimum repayment as specified in the Note. C. Agency and Participant 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 in accordance with the terms set forth below for the term of this Agreement. Regulatory Agreement Page 1 of 13 SF-2000 Agree:OCCI1:Regulator;Agreement 02.11700-'2 AGREEMENT: NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for themselves, their heirs, executors, administrators and assigns, and all persons claiming under or through them, that the Site, for the term of this Agreement, shall be held, transferred, encumbered, used, sold. conveyed, leased and occupied, subject to the covenants and restrictions hereinafter set forth: 1. DEFINITIONS. 1.1 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean annual rentals whose amount does not exceed the maximum percentage of income that can be devoted to rent as set forth by California Health & Safety Code Section 50053, or its successor. 1.2 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer to Eligible Very Low Income Tenants, Eligible Low Income Tenants who are otherwise eligible to rent a Unit. 1.3 Eligible Very Low Income Tenant. As used in this Agreement, the term "Eligible Very Low Income Tenant" shall mean those tenants whose household income does not exceed fifty percent (50%) of the Orange County Median Income, or such other percentage as may be defined in California law from time to time as "very low income," and who are otherwise eligible to rent a Unit. 1.4 Orange County Median Income. For purposes of this Agreement, the "Orange County Median Income" shall be determined by reference to the regulations published by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50093, or its successor. 1.5 Unit and Units. As used in this Agreement, the term "Unit' shall mean one of the four (4) rental dwelling units in the Project, and the term "Units" shall mean two or more of the four(4) of the rental 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. TERM OF AGREEMENT, RESIDENTIAL RENTAL PROPERTY. The tern of this Agreement shall be thirty (30) years from the effective date of the OPA. Participant hereby agrees that the Project is to be owned, managed, and operated as a project for Eligible Tenants for the term of this Agreement. To that end, and for the term of this Agreement, the Participant hereby represents, covenants, warrants and agrees as follows: 2.1 Purpose. The Site will be acquired and the Project developed for the purpose of providing Eligible Tenants rental housing. Regulatoy Agreement Page 2 of 13 SF-2000 Agree:OCCH=Regulatory Agreement 02/3 7/00-#2 i 2.2 Facilities. All of the dwelling units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with the terms of the OPA. 2.3 Residential Use. None of the dwelling 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 without the Agency's prior written consent. 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Participant take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership,without the prior written approval of Agency. 2.5 Preference to Eligible Tenants. All of the dwelling units will be available for rental in accordance with the terms of this Agreement, and the Participant shall not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that the dwelling units are required to be leased or rented to Eligible Tenants and except as provided in Section 3.3 below. 2.6 Liability of Participant. Participant and Manager shall not incur any liability under this Agreement as a result of fraud or negligent or intentional misrepresentation by a tenant. 3. OCCUPANCY OF PROJECT BY ELIGIBLE TENANTS. Participant hereby represents, warrants, and covenants as follows: 3.1 income Restrictions. Except as expressly provided herein, throughout the term of this Agreement, the four(4) units shall be rented to Very Low Income Tenants and these Units shall be designated as "HOME Units' and the rents for these Units shall not exceed the "low income" rent as defined by HOME Program, as set forth at Section 92.252 of Title 24 of the Code of Federal Regulations. 3.2 Rental Rates. Participant shall rent each of the Units at no greater than the Affordable Rent applicable to the particular Unit. 3.3 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant at the commencement of occupancy shall be treated as occupied by an Eligible Tenant until the Unit is vacated. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until reoccupied. (a) As to the HOME Units, the HOME Program allows tenants to continue residing in income restricted units even if their income increases. Pursuant to the HOME Program, Participant may increase the tenant to no more than thirty percent (30%) of their actual household income if their income exceeds the maximum allowable income for the HOME Unit. Regulatory Agreement Page 3 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 02/l7.00-92 3.4 Income Computation. Immediately prior to an Eligible Tenant's occupancy of a unit, Participant shall obtain and maintain on file an Income Computation and Certification form from each such Eligible Tenant dated immediately prior to the date of initial occupancy in a Unit by such Eligible Tenant. Participant shall use its best efforts to verify that the income provided by an applicant is accurate by taking one or more the following steps as a part of the verification process: (i) obtain two (2)pay stubs for 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. 3.5 Rental Priority. Tenants living in the Project prior to Participant's rehabilitation of the Units as contemplated by the OPA ("Initial Rehabilitation") who are Eligible Tenants meeting the income restrictions of the Units as set forth in Section 3.1 shall be given first priority in re-leasing Units in the Project following completion of the Initial Rehabilitation. Except as set forth above, Units shall be rented to Eligible Tenants on a first-come, first-served basis; provided, however, that Participant may, in Participant's sole discretion, maintain an "interest list" or "eligibility list" of potential tenants but that Participant shall not be liable to Agency or any person, firm, or entity in the event a 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. 3.6 Renting Vacant Units. When a unit becomes available as a result of a tenant vacation, Participant shall rent the unit to an Eligible Tenant in accordance With the following procedure: (a) First, Participant shall rent the Unit to persons who have been displaced by Agency activities, pursuant to California Health and Safety Code Section 33411.3,provided that Agency provides Participant with reasonable notice. (b) Second, Participant shall rent any vacant unit in the order of priority as set forth in Section 3.5. 3.7 Maintenance of Records. Participant shall maintain complete and accurate records pertaining to the Units, and shall pen-nit any duly authorized representative of the Agency to inspect the books and records of Participant pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.8 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Participant has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Regulatory Agreement Page 4 of 13 SF-2000 Agree:OCCi :Regulatory Agreement 02117.100-02 3.9 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. 4. MAINTENANCE. 4.1 Maintenance Covenant. Participant 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. In addition, Participant shall keep the Site free from all graffiti and any accumulation of debris or waste material. Participant 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 approved materials. The maintenance covenant contained in this Section shall remain in effect for the term of this Agreement. 4.2 Agency Rights- Agency shall have the right annually to enter upon the Site to inspect both the interiors and exteriors of the Site, upon seventy-tiro (72) hours notice to Participant. Agency may perform or cause to be performed the maintenance necessary to cure any default of these maintenance covenants and Participant shall be liable for payment to Agency of Agency's reasonable costs (excluding staff salaries and overhead and other similar costs) to perform such required maintenance; provided, however, that Participant first be given written notice by Agency of the actions required to cure any default, and Participant, after receipt of such notice, shall have sixty (60) days to cure such defaults, but Participant shall not be deemed in default of the foregoing maintenance covenant if such default cannot reasonably be cured within the sixty(60)day period referenced above so long as Participant has commenced to cure such default within the same sixty(60)day period and is diligently proceeding with the work to cure such default. Notwithstanding the foregoing, if any property conditions are reasonably identified by Agency after a property inspection attended by a representative of Participant that pose an immediate danger to life or limb, Participant shall have three (3) days to effect corrections of such condition(s) to Agency's reasonable satisfaction. 4.3 Annual Report. Participant covenants and agrees to submit to the Agency an annual report (the "Annual Report") required by California Health and Safety Code Section 33418. The Annual Report shall include for each Unit the rental rate and the income and family size of the occupants. The income information shall be supplied by the tenant in a certified statement on a form provided by the Agency. The Participant shall submit the Annual Report on or before the end of the first calendar quarter of the year following the year covered by the Annual Report. The Participant shall provide for the submission of such information in its leases with tenants. Agency shall not charge Participant a fee for reviewing the Annual Report, or for Agency's or Participant's compliance with Health and Safety Code § 33418. Regulatory Agreement Page 5 of 13 SF-2000 Agree:OCCH-Regulatory Agreement 4.4 Management Plan. Participant shall prepare, submit to Agency Executive Director within sixty (60) days of Recordation of this Agreement and maintain in effect a Management Plan in accordance with the following: (a) The Management Plan, including such amendments as may be approved in writing by the Agency, shall remain in effect for the term of this Regulatory Agreement. Participant shall not amend the Management Plan or any of its components without the prior vvritten consent of the Agency. The components of the Management Plan shall include: (1) Management Agent. The name and qualifications of the proposed management agent. The Agency 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 Project. (2) Management Program. A description of the proposed management, maintenance, tenant selection and occupancy policies and procedures for the 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 Participant 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 Units. (5) Annual Operating Budgeet. Prior to the completion of construction and annually thereafter not later than fifteen (15) days prior to the beginning of the next fiscal year of the Project, Participant shall submit a projected operating budget to the Agency Executive Director for review and approval. The Agency shall not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder, and such matter shall be deemed approved unless the Agency provides to Participant its written disapproval within thirty(30) days after receipt of a request for approval, provided Participant includes with its request, a vvritten notice, in capital letters, stating as follows: NOTICE: PURSUANT TO SECTION 4.4 OF THE REGULATORY AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ORANGE COUNTY COMMUNITY HOUSING CORPORATION, FAILURE BY THE AGENCY TO APPROVE OR DISAPPROVE THE MATTER SUBMITTED WITH THIS REQUEST WITHIN 30 DAYS SHALL BE DEEMED AN APPROVAL. Regulatory Agreement Page 6 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 02/l7,'00- 2 Any disapproval shall be in writing and contain the Agency's reasons for disapproval. (b) Participant hereby covenants and agrees the Agency shall have the right, at any time and from time to time, to give notice to Participant if the Agency determines that the Project is not being managed or maintained in accordance with the Management Plan. The Agency may require the Participant to change management practices or to terminate the management agent and retain a different management agent, approved by the Agency. The Agency agrees that prior to requiring the Participant to change its management agent or the management practices the Agency shall informally consult with Participant, in an attempt to resolve the dispute. If the Agency determines that such an attempt at informal resolution has been unsuccessful, it shall give the Participant thirty(30) days written notice to change the management agent or practice, as the case may be. If Participant fails to do as requested by the Agency in the written notice, the Agency may then require the immediate change of the management practice or agent, as the case may be. The management agreement shall provide that it is subject to termination by the Participant without penalty, upon thirty (30) days prior written notice, at the direction of the Agency. Within ten (10) days following a direction of the Agency to replace the management agent, the Participant shall select another management agent or make other arrangements satisfactory to the Agency for continuing management of the Project. The Participant shall notify the Agency upon learning that there is a voluntary change in the management or control of the management agent, and, if the change is unsatisfactory to the Agency, the Agency shall be entitled to require the Participant to change the management agent in accordance with the terms of this paragraph. 5. ENFORCEMENT. In the event Participant defaults in the performance or observance of any covenant, agreement or obligation of Participant pursuant to this Agreement, and if such default remains uncured for a period of sixty (60) days after written notice thereof(or such longer period as may apply to the specific alleged default) shall have been given by Agency, or, in the event said default cannot be cured within said time period, Participant has failed to commence to cure such default within said sixty (60) days and diligently prosecute said cure to completion, then Agency shall declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: (a) By mandamus or other suit, action or proceeding at law or in equity, require Participant 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 pursuant to the OPA. Regulatory Agreement Page 7 of 13 SF-2000,agree:OCCH:Regulatory Agreement 0211 TOO-#2 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. NONDISCRIM]I IATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, 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(except as permitted by this Agreement). 6.1 Form of Nondiscrimination and Nonsegegation Clauses. The Participant shall refrain from restricting the rental, sale or lease of the property on the basis of race, color, religion, ancestry, national origin, sex or marital status 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, his heirs, executors, administrators and assigns, and all persons claiming under or through him, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection,location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) In Leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, ancestry, national origin, sex, or marital status in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself, or any person claiming under or through him, 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 land herein leased." (c) In Contracts: "There shall be no discrimination against or segregation of any person, or group of persons on account of race, color, religion, ancestry, national origin, sex, or marital status in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any Regulatory Agreement Page 8 cf 13 SF-2000 Agree:OCCH:Regulatory Agreement 02117..00-Y2 such practice or practices of discrimination or segregation with reference to the lessees, subtenants, sublessees or vendees of the land." 7. COVENANTS TO RUN WITH THE LAND. Participant hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. Agency and Participant 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 Participant's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire term of this Agreement, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. 8. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any covenant in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable attorney's fees and costs. Attorney's fees shall include attorney's 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(1) personal delivery, (ii) courier service that provides a receipt showing date and time of delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Executive reetar City Clerk Participant: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City, CA 92655 Attn: Executive Director Regulatory Agreement Page 9 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 02/17/00-#2 Notices personally delivered or delivered by courier shall be effective upon receipt. Mailed notices shall be effective on the earlier of receipt or Noon on the second business day following deposit in the United States mail. 11. SEVERABILITY/WAIVER/INTEGRATION. 11.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 11.2 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 11.3 Integration. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement. 12. GOVERNING LAW. This Agreement shall be governed by the 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. This Agreement shall be junior and subordinate to the liens of the deeds of trust identified in the OPA as the Construction/Permanent Lender's deed(s)of trust, and such other and further documents, including regulatory agreements, as such lenders may require,not to exceed Fifty Thousand Dollars (50,000.00) in debt. If, from time to time and at one or more times, Participant chooses to refinance the loan secured by any deed of trust which is superior to this Agreement, Agency agrees to subordinate this Agreement to the refinancing lenders 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. Agency agrees to execute such subordination agreements as may be required to effect the priority set forth in this Section. [end - signature page follows] Regulatory Agreement Page 10 of 13 SF-2000 Agree:OCCH:Regulatory Agreement 02/17.100-02 IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory Agreement-and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. "AGENCY" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: By: Agency Clerk Chairman APPROVED AS TO FORM: By: L Agency Counsel 212.5100 �bD "PARTICIPANT" SHELTER FOR THE HOMELESS, LN. C., dba AMERICAN LODGING, a California nonprofit corporation By: Judy K pmann Executive Director A7/Z_,�// By: �---� Jim Miller � President/CEO Regulatory Agreement Page 11 of 13 SF-2000 Agree:OCC}1:Regulatory Agreement 02/1 7100-=2 STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are , subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA } ) ss. COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s)or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] Regulatory Agreement Page 12 of 13 SF-2000 Agree:OCCli:Regulatory Agreement 02/17100-#2 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF SITE [To be inserted.] Regulatory Agreement Page 13 of 1.3 SF-2000 Agree:OCCH:Regulatory Agreement 02/l71W-#2 FROM PanaSonic FAX SYSTEM PHONE NO. Feb. 09 2000 10:16AM P3 SCHEDULE A The estate or interest in the land hereinaller described or referred to covered by this report is: A FEF. Title of said estate or interest at the date hereof is vested in: 'VAN-(,'HOW MA AND TAI-ANN MA, husband and wife:as joint tenants. The land referred to in this report is situated in the COUNTY OF ORANGE,.STATE OF CALIFORNIA, and is described as follows: LOT 33 OF TRACT NO. 4301, IN THE CITY-OF HUN-11NGTON BEACH;COUNTY OF. ORANGE,STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 17.7_PAGES"- I I AND 12, OF MISCELLANEOUSI.%MAPS, IN 'THE-'OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, r4IN- ERALS AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. ALSO EXCEPT THE SUBSURFACE WATER RIGHTS,BUT WITHOUT THE RIGHT OF VIvTRY TO THE SURFACE OR TI3E SUBSURFACE ABOVE A DEPTH OF 150 FEET AS DEDICATED ON THE MAP OF SAID TRACT. END OF SCHEDULE A z 8633R1 call1ornla. counties. Title Company FEB-09--2000 10:22 96i P_03 1 PROMISSORY NOTE SECURED BY SUBORDINATED CORPORATION 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 SUBORDINATED DEED OF TRUST Principal Loan Amount: S350,000.00 Note Date: .9A=JC, 31 72000 FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to the order of the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Holder"), at a place designated by Holder, the principal sum of THREE HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS (S350,000.00), or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof, pursuant to an Owner Participation Agreement (the "OPA") dated as of h,4" 20_ _, 2000 between Maker and Holder. 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 OPA and the Deed of Trust and Assignment of Rents dated 1*4.c, a.0, 0-0-e00 , executed by the Maker and recorded in the Recorder's Office of Orange County, California, on , as Document No. (the "Trust Deed"). The obligation of the Maker set forth in this Note is subject to acceleration as set forth in the OPA. The OPA and the Trust Deed are public records on file in the offices of the Holder. 1. Agency Loan. This Note evidences the obligation of the Maker to the Holder for the repayment of funds loaned to the Maker by the Holder (the "Agency Loan') to finance the development of the Site pursuant to the OPA. 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 OPA. 2. Payment of Obligation. Unless an uncured Material Default of Maker shall have occurred under the Deed of Trust (as hereinafter defined) or any obligation secured thereby (including the obligations in the OPA and the Regulatory Agreement [as such term is defined in the OPA]), or Maker has breached any promise or obligation in this Note, (i) no interest shall accrue on the unpaid principal of this Note; and (ii) a prorated portion of the total principal advanced hereunder shall be forgiven, waived, and discharged on each anniversary date of Note Date set forth above in an amount equal to the total principal advanced hereunder divided by thirty(30), i.e., one- Promissory Note Page 1 of 3 SF-2000 Agree:OCCIL Promissory Note N. thirtieth of the Note Amount shall be deemed waived and discharged by Maker as of each anniversary date of the Note Date. Holder is only requiring Maker to execute this Note as a promise to repay the Note Amount in the event of an uncured Material Default of Maker under the Deed of Trust, OPA, or Regulatory Agreement. Unless such uncured Material Default of Maker has occurred, Holder does not intend for Maker to make any principal payments or interest of any kind on this Note. Nottivithstanding the above, commencing on 2003 and every succeeding anniversary, Participant shall pay Maker One Thousand Two Hundred Dollars (S1,200.00) or fifty percent of Net Operating Income for the previous calendar year (whichever is more). Further, once the capital reserve is fully funded as determined pursuant to Section 5.9(a) of the OPA, Participant's annual payments to Maker shall be Two Thousand Four Hundred Dollars ($2,400.00) or 100% of Net Operating Income (whichever is more). Net Operating Income shall have the same meaning as that term is defined in the OPA. Upon the forgiveness, waiver, and discharge of this Note as set forth above, Holder shall mark this Note "PAID IN FULL" and shall the deliver this Note to the Trustee of the Subordinated Deed of Trust that secures this Note for the Trustee's delivery to Maker in conjunction with the reconveyance of the Deed of Trust. 3. No Prepayment. This Note may not be prepaid. 4. Acceleration of Obligation. Upon the occurrence of a uncured Material Default of Maker under this Note, the Deed of Trust or any obligation secured thereby (including the obligations in the OPA 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, and upon thirty (30) days prior written notice to Maker, declare this Note and the entire obligations hereby evidenced that has not been forgiven, waived, and discharged pursuant to Section l above, 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 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. Promissory Note Page 2 of 3 SF-2000 Agree:OCCK Promissory Note 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. Usurv. Notwithstanding any provision in this Note, 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. Govemin, Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Maker has executed this Note as of the date and year first above written. "PARTICIPANT" SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation By. --- Judy Kampmann Executive Director AND By: Jim Miller President/CEO Promissory Note Page 3 of 3 SF-2000 Agree:OCCH:Promissory Note + S t WHEN RECORDED RETURN TO: Shelter for the H eless. . 15161 Jacks Stree Midw ity, 2655 Exec rve Director CJf OfkA f4un •7j6n BE U-6, C4- Sz4,YS1 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 _ day of 2000, by and among REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public agency, corporate and politic (the "Agency"); SHELTER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation ("Participant"); and ("Lender"). RECITALS: A. Participant owns fee title to the real property described on Attachment No. "1" (the "Property") attached hereto and incorporated herein by reference. The Agency and Participant have entered into an Owner Participation Agreement dated as of , 2000 (the "OPA"). Pursuant to the terms of the OPA, Participant has executed a Mote in favor of the Agency in the amount of THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00) ("Agency Loan") to assist Participant in the redevelopment of the Property as an affordable housing complex. The Agency Loan is to be secured by a Subordinated Deed of Trust With Assignment of Rents With Rider Attached encumbering the Property(the "Agency Deed of Trust"). B. Agency and Participant have also entered into that certain Regulatory Agreement and Declaration of Covenants and Restrictions recorded against the Property ("Agency Regulatory Agreement"), which Agency Regulatory Agreement contains, among other terms, certain use restrictions affecting the Property. Subordination Agreement Page 1 of 9 5F:2000 Agree:OCCH:Sub.Agmt. 02/16/00-�2 C. Participant has obtained a loan from ("the Lender") to lend to Participant the sum of DOLLARS (S___) (the "Lender Loan"). To repay the Lender Loan, Participant 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, Participant may also be required by Lender to execute a regulatory agreement to be recorded against the Property,which may contain among other terms, use restrictions affecting the Property(the "Lender Regulatory Agreement"). D. Lender is willing to make the Lender Loan provided the Lender Deed of Trust and Lender Regulatory Agreement are a lien or charge upon the Property prior and superior to the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, and provided that the Agency will specifically and unconditionally subordinate the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement to the lien or charge of the Lender Deed of Trust and the Lender Regulatory Agreement. E. It is to the mutual benefit of the Lender, Agency, and Participant that the Lender make the Lender Loan to Participant; and the Agency has agreed that the Lender Deed of Trust and Lender Regulatory Agreement shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the lien or charge of the Agency Deed of Trust and Agency Regulatory Agreement, subject to the specific terms and provisions of this Subordination Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Participant, 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 Agency. 1.1 Subordination of Agency Deed of Trust and Agency_Regulatory Agreement to Lender Deed of Trust and Lender Regulatory Agreement. The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder), and the Lender Regulatory Agreement (and any amendments or modifications thereto) 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 the Agency Deed of Trust and the Agency Regulatory Agreement, (ii) all present and future indebtedness and obligations secured thereby, and (iii) all rights and privileges of Agency thereunder, provided that the Lender Deed of Trust does not exceed Fifty Thousand Dollars (S50,000.00). If Participant chooses to refinance the Lender Loan, Agency agrees to subordinate the Agency Deed of Trust and the Agency 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. Subordination Agreement Page 2 of 9 SF:2000 Agree:OCM Sub.Agmi. 02,17 00-42 i 1.2 Covenants of Agency. The Agency declares, agrees and acknowledges that: (a) The Agency consents to all provisions of the Lender Note and the Lender Deed of Trust; and (ii) all provisions of the Lender Regulatory Agreement. (b) To Agency's actual knowledge, there is no breach, event of default or default existing under the Agency Deed of Trust or Agency Regulatory Agreement, or any circumstances, event, omission or failure of condition which would constitute such a breach, default or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Agency. The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Agency Deed of Trust and Agency Regulatory Agreement without this Subordination Agreement and each of the undersigned understands that in reliance upon, and in consideration of this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this waiver, relinquishment and subordination. 3. Notice to Agency. In the event of a breach or default by Participant under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Participant. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the following rights so long as either the Agency Regulatory Agreement or the Agency Deed of Trust encumber any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or any lien under the Lender Regulatory Agreement. In connection therewith, the Lender agrees that (i) in the event of a monetary default, the Lender shall not foreclose Lender Deed of Trust or other lien prior to the date that is thirty (30) days after the date that the Lender would otherwise be legally entitled to foreclose Lender Deed of Trust and (ii) in the event of a nonmonetary default, the Lender shall not foreclose its Lender Deed of Trust or other lien prior to the date specified above for monetary defaults; provided that if said nonmonetary default is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary to obtain possession of the Property by either foreclosing the Agency Deed of Trust, and to cure the default, so long as the Agency does so with reasonable and continuous diligence. (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. (c) To negotiate with the Participant to purchase the Property from Participant, 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. Subordination Agreement Page 3 of 9 SF:2000 Agee:OCCH:Sub.Agmt. 02116W-#2 The Lender agrees that the exercise of any of the rights set forth in this Section 3.1 by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. 3.1 Foreclosure of Agency Deed of Trust. The Lender hereby agrees that in the event that Agency forecloses the Agency Deed of Trust, said foreclosure shall not 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 said 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 such Loan shall not defeat the subordination herein made in whole or in part. 4. Miscellaneous. 4.1 Entire Agreement. This Subordination Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and Lender Regulatory Agreement on the one hand, and the Agency Deed of Trust and Agency Regulatory Agreement on the other hand, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust and Agency 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 laws of the State of California. 4.4 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by Iaw. 4.5 Notice. Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by (i) personal delivery, (ii) by courier service that provides a receipt showing date and time of delivery, or (iii) by registered or certified mail, return receipt requested, postage prepaid. Notices shall be directed at the address of such party hereinafter set forth, or such other Subordination Agreement Page 4 of 9 SF:2000 Agree:OCCH:Sub.Agmt. 02/16!00-=2 i 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) forty-eight(48)hours after deposit in the United States mail. If to Agency: Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: -E1x'ecmNT'Dimc dT City Clerk If to Participant: Shelter for the Homeless, Inc. 15161 Jackson Street Midway City, CA 92655 Attention: Executive Director If to Lender: With copy to: 4.6 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. 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. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. Subordination Agreement Page 5 of 9 SF:2000 Agree-OCCH:Sub.Agmt. 02116.r00-#2 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. "AGENCY" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTIN ,GTON BEACH, a public body,corporate and politic By: By: Agency Clerk APPROVED AS TO FORM: By: Age y Counsel A+/v ry [Signatures continued on next page.] Subordination Agreement Page 6 of 9 SF 2000 Agree:OCCH:Sub.Agent. 02116'00--12 "Participant" SHELER FOR THE HOMELESS, INC., dba AMERICAN LODGING, a California nonprofit corporation By: Judy Kampmann Executive Director AND By: Jim Miller President/CEO "LEN-DER" By: Its: By: Its: Subordination Agreement Page 7 of 9 SF:2000 Agree:OCCI1:Sub.Agmt. 02/16r00-#2 L STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] [ADD ADDITIONAL ACKNOWLEDGMENT FORMS AS NECESSARY] Subordination Agreement Page 8 of 9 5F-2000 Agree:OCCH:Sub.Amt. 02/16/00-.#2 ATTACHMENT NO. "1" LEGAL DESCRIPTION OF PROPERTY [TO BE INSERTED] Subordination Agreement Page 9 of 9 SF:2000 Agee:OCCH:Sub.Agmt. 02/16/00-ft2 FROM : Panasonic FAX SYSTEM PHONE NO. Feb. 09 2000 10:16AM P3 SCHEDULE A The estate or interest in the land hereinafter described or referred to covered by this report is: A FEF.. Title of said estate or interest at the date hereof is vested in: VAN-CHOW MA AND TAI-ANN MA, husband and wife-as joint tenants. The land referred to in this report is situated in the COUNTY OF ORANGE, STATE OF CALI)"ORlti'[A, and is described as follows: LOT 33 OF TRACT NO. 4301,IN THE.CITY OF HUNTINGTON BEACKiCOUNT:Y OF ORANGE,STATE OF CALIFORNIA,AS..PER MAP RECORDED IN BOOK 177,PAGES- I I AND 12, OF MISCELLANEOUS.MAPS, IN THE-OFFICE OF THF. COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL OIL, GAS, MINERALS AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 150 FEET FROM THE SURFACE OF SAID PROPERTY, BUT WITH NO RIGHT OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD. ALSO EXCEPT TIDE SUBSURFACE WATER RIGHTS,BUT WITHOUT THE RIGHT OF V,N'I'RV TO THE SURFACE OR TI3E SUBSURFACE ABOVE A DEPTH OF 150 FEET AS DEDICATED ON THE MAP OF SAID TRACT. END OF SCHEDULE A 3.724)x' 1 t?632R1 California. Counties Title Company FE19-09-2000 10:22 96% P.03 Location Map ATTACHMENT #2 PLANNING DM 31L U SECTIONAL DISTRICT MAP •• 26 - 5 - 11 CITY OF H[.TNTINGTON BEACH ORANGE COUNTY, CALIFORNIA USE OF PROPERTY MAP I WARNER AVE �!j il is I ail = Tull ' IF rlo Cw- I Y III I N CF—E � I CF-R i {:'nn[I gyp ' cco.w cdE I i i i � I I 1 I l i ; .F-E h i I 9ETTT C F—CEU. L BezTpR D0. M ill ii l l � Rill SLA EQ I S VEEn ♦y� C F—R —r 1 1 1 I Pill I I I I i I 4 DR = V l '1' TALBERY AVE i PLANNING ZONING DM 31Z SECTIONAL DISTRICT MAP 26 - 5 - II AOYC, CITY of .� �. 11.I%e CITY COUNCIL ORDINANCE W. 759 c��:••-��••,• LEGEND: adem� !� ..nem � a � 'asa.]I...rxuLnw.. osrwcT HLTI�TTINGTO�T BEACH �b . [�..,.]T,/ACILITIE]IfWGTIpR'gs'.ICT i-i!<] rR1 la e[•b:v aEsoo]r+�ns+lvr ORANGE COUNTY. CALIFORNIA �� � _ - ;� '©'"-"a °""" DMT�-T FIAUTIE]IKC.[—NS—: _ _ IC.=C. �0•—V,-Tt Tz�41'I[s¢rvLI E6.9i' I Inf •/// �•V:F. l -FP2'- aOfn+lfr =7 FIYI V]Tt['roA[M! .•dz c-• --�.— a-Tnu•u[ Z3i n WARkcP, AVE •z[,z L R2 op n� r--'-----�-- j rl j [R45 MI •• rIM DR.J C4-MS2 r CAI, AYE ' R2 R2 C F—E ]a I::. ; R2z R2 I ,I fR3-FP2 I K. _ q, CF-R ULr� LilF �z R2 rrpA9 AVE �� I f `Ji' R 2 ;wRZ mi R2 R'+ - RI T°r,J 9ETTY oR _ M 1_M OR lRI .� - M1 MI R3 I' R3 I �RI RII1 R1 ¢� RI z`RI - -C I-JIju" I' J cone cR i `J O N N i J RI-Cb Rl CD SR31 Idtllpp - - I I- R1 C Rl-CD o� rCD R{-Cblu IR3/ ` W I I _cD U �., M — D MI lyj 1 MH U O O IRAI O OO I - 3aE[R E 4 � 6 �� 3(C�4 I � � �r yCF_FtM I R3R3R2 f IRS: es,w O I - aovc tiE n+•wr. •...T-.- '� MI-GD I �M1r R2 g� 1 - RoRaLo op. s8 I Mi R2 I J-L 8 03-R3 I G L oIM I-CD a R2� R2 C4� MI-Cl% I M�x MI I �7 R75 R TALBERT AVE Ik Shelter Pro Forma ATTACHMENT #3 Shelter For The Homeless Projected Budget 7802 Barton Rent$550/month $ 2,200 $ 26,400 Less Vacancy $ 200 $ 2,400 Net Rental Income $ 2,000 S 24,000 Management Fees $ 200 $ 2,400 Carpet Repair $ 50 $ 600 Landscaping $ 75 $ 900 Maintenance & Repair $ 225 $ 2,700 Insurance $ 50 $ 600 Utilities- Electric $ 80 $ 960 Utilities-Gas $ 50 $ 600 Utilities-Sanitation S 200 $ 2,400 Depreciation $ 840 $ 7,680 Total Operating Expense S 1,670 $ 18,840 Corporate Management $ 250 $ 3,000 Reserves 10% $ 180 $ 2,160 rota!Other Expenses $ 430 S 5,160 'Total Income 3 2,000 S 24,000 Total Expenses S 2,000 $ 24,000 JAN-17-2000 15:09 P.08 Deal Point Summary ATTACHMENT #4------,, DRAFT DEAL POINT MEMORANDUM Acquisition of 7802 Barton Drive The Redevelopment Agency of the City of Huntington Beach and Shelter for the Homeless (SHELTER) January 14, 1999 ; Deal Points: 1. The Huntington Beach Redevelopment Agency will provide $350,000 in HOME 1 ' Investment Partnership funds as a loan to SHELTER (SHELTER). These funds will be used to acquire a rental property (consisting of four units) located at 7802 Barton Drive. The funding breakdown (approximate) is as follows: ❑ $285,000 toward acquisition costs ❑ $ 10,000 in closing costs (maximum) ❑ $ 55,000 toward rehab costs 2. All four (4) units will be subject to income and affordability restrictions, which can be defined as follows: a. Four (4) two bedroom units must be rented to households earning less than 50% of the county median income. The maximum rent can not exceed the standard established by the U.S. Department of Housing and Urban Development (HUD) for the HOME program. 3. SHELTER will contribute a minimum of $30,000 in equity, rehab labor or strictly defined and quantifiable services to the operation of the property. A budget must be submitted by SHELTER that outlines each proposed service and cost. 4. The Agency's financing will be secured in first position. No other financing will be permitted without the written approval of the Agency. 5. SHELTER agrees to the amount of capital reserves that it shows on the final approved pro forma that is to be submitted to the Redevelopment Agency. SHELTER will submit its audited financial statements to the Redevelopment Agency annually after acceptance and certification of such statements to Barton Drive Deal Points, continued SHELTER's Board of Directors. The Redevelopment Agency will review the statements and capital reserves account and may choose to require further analysis or review by an third party, but must do so at its own expense. 6. Beginning in the third year of the agreement, and continuing annually through the thirtieth year, SHELTER will forward the proceeds of a residual receipts account to the Redevelopment Agency as a means of repayment of the HOME funds. The minimum amount of the annual repayment will be fifty percent (50%) of the available cash flow or twelve hundred ($1,200) dollars. The remaining fifty percent (50%) will be used for a Capital reserve account until said account reaches an amount equal to an amount determined by the Agency and SHELTER to be appropriate. After the Capital Account has reached the agreed balance, one hundred percent (100%) of the available net cash flow will be used for repayment. Should the economics of the project not allow for the minimum repayment as described above, then SHELTER will have the right to appeal to the Redevelopment Agency and request that the minimum repayment be reduced, suspended Or forgiven. SHELTER agrees to bear the entire burden of proving its inability to meet the minimum payment. The Redevelopment Agency will reserve 0 the right to reduce, suspend, forgive or renegotiate the terms of repayment based on the evidence submitted by SHELTER. The Redevelopment Agency further reserves the right to audit the financial statements of SHELTER to determine or verify the balance of the residual receipts account at its own expense. Resale Provisions 1. The Agency will have a first-right-of-refusal to purchase at any time SHELTER wishes to sell the property to a qualified third party. An option period to purchase will commence at the time of written notification by SHELTER and end no early than ninety days from the date of such notice. 2 Barton Drive Deal Points, continued 2. The Agency will also have the right to approve any subsequent buyer. SHELTER agrees to make every reasonable effort to sell the property to another nonprofit housing corporation with similar experience and reputation. Default Provisions 1. SHELTER agrees to the default provisions contained within the HOME program loan agreement. To summarize, the default provisions involve the immediate repayment of the set aside and HOME assistance, with interest fixed at the prime lending rate plus two points, should any default by SHELTER occur during the affordability period (30 years). 2. Reverter clauses will also be included in the loan agreement. This language will allow the Agency to take over the ownership and management of the project in the event of a major, uncured default by SHELTER. Relocation 1. If required, a relocation plan must be submitted to the Redevelopment Agency for approval erior to the relocation of any tenants from the property. Name, gender, age, ethnicity, household income, and amount of relocation payment must be furnished in the relocation plan. Further, copies of all notices required by the Uniform Relocation Act must be furnished to the tenants as part of the relocation and official copies must be given to the Redevelopment Agency for its records. SHELTER must keep original copies in its files as required by HUD. 2. SHELTER must agree to indemnify the Redevelopment Agency against any relocation obligations and expenses that arise from the acquisition or rehabilitation of the subject properties beyond those obligations identified in the relocation plan, as required in the Affordable Housing Agreement; and also from any relocation and expenses that arise afterthe acquisition and rehabilitation activities are complete. 3 Barton Drive Deal Points,continued Rehabilitation 1. SHELTER will rehabilitate the subject properties to conform with (at a minimum) federal housing quality standards. SHELTER agrees to maintain the properties for the duration of the affordable housing agreement and will allow the Redevelopment Agency to inspect both the interiors and exteriors of the subject properties on an annual basis. ❑ Shelter will have twenty-four (24) months from the close of escrow to complete rehab of the interior of the property. Extensions may be negotiated. 2. SHELTER will furnish a list of proposed repairs and improvements to the Agency for informational purposes p i2fto rehabilitation. SHELTER is funding the rehabilitation work with HOME Investment Partnership (HOME) funds, and the Agency will have the right to review and approve the list prior to the start of any rehabilitation work. 3. The Agency will conduct progress inspections once rehabilitation work has started. The Agency reserves the right to independently inspect the units and SHELTER agrees to provide access to the Agency with forty-eight (48) hours notice. 4. SHELTER will furnish copies of all building permits for all items required to be permitted under the Huntington Beach Municipal Code, with proof of inspection by the Huntington Beach Building Department, where applicable. , at a , a 1.1 units must be Fohalamlitated Re lateF thaR eightGe;; (18) Fnenths- f ro.m.-the Giese Of essrer►w 6. SHELTER will test for the presence of asbestos and lead-based paint as required by HUD regulations. SHELTER will remediate any asbestos or lead-based paint hazards where the level of those substances is found to be in excess of acceptable thresholds and may request additional Agency financial assistance, if required. 4 e Barton Drive Deal Points, continued Copies of all test results, tenant notifications, and remediation plans must be provided to the Redevelopment Agency, or to authorized representatives of the Redevelopment Agency. _ f Environmental Issues 1. The Redevelopment Agency will conduct an environmental review of the site in accordance with the California Environmental Quality Act (CEQA) and HUD regulations at 24 CFR Part 58. Using those regulations as a guide in past projects, the Redevelopment Agency will probably determine that the project is considered "categorically exempt" from CEQA and NEPA (the National Environmental Policy Act of 1969) and is not subject to further, more complicated assessment. 2. This review, while thorough, cannot be considered as exhaustive or all-inclusive as a Phase I due diligence exercise. Because of this, SHELTER agrees to indemnify and hold the Redevelopment Agency harmless from all liabilities (including penalties, fines, and monetary sanctions) arising from hazardous materials storage on the subject properties, or hazardous materials contamination of the subject properties. SHELTER agrees to provide any notices, orders, or reports concerning environmental matters that may affect the subject properties to the Redevelopment Agency rp rorto the funding of the acquisition loan. Property Management Issues 1. SHELTER will maintain the sites during the affordability period in accordance with a restrictive covenant that will be secured against the properties. Should SHELTER fail to adequately maintain such areas, and any problems identified by the Redevelopment Agency are not corrected within sixty (60) days from the date of written notice from the Redevelopment Agency, the Redevelopment Agency may perform the necessary maintenance and SHELTER will pay all reasonable costs for that maintenance. Further, if any conditions are identified as health and safety violations that pose a danger to life and limb, the violations must be corrected within three (3) days. 5 Barton Drive Deal Points, continued Accepted: Date: Shelter Executive Director By: 6 CITY OF HUNTINGTON BEACH InterOffice Communication Economic Development Department TO: Honorable Mayor/Chairman and City Council Members Redevelopment Agency Members FROM: Ray Silver, City Administrator/Executive Director PREPARED BY: David C. Biggs, Director of Economic Development DATE: March 16, 2000 SUBJECT: Late Communication for Agenda Item F-1 Substitution of Page 5 - Owner Participation Agreement, Attachment 1. Attachment 1 — Owner Participation Agreement: Please substitute Page 5 in your packets with the attached page. Thank You. bDO`�.r D\,P NOV ,I-A4 p 3- U ro C 0 0 d =� L > C c-n c, r.j b The term "Vern° Low Income Households" shall mean a family or individual whose annual income does not exceed fifty percent (50%) of the median income for the Orange County Metropolitan Statistical Area as determined by HUD with adjustments for smaller and larger families. SECTION 2. SUBJECT OF THIS AGREEMENT. 2.1 Purpose of the Agreement (a) The purpose of this Agreement is to implement the Community Redevelopment Law by providing a loan(the "Agency Loan') to assist Participant to pay a portion of the Project costs, in an amount not to exceed THREE HUNDRED FIFTY THOUSAND DOLLARS (S350,000.00), as evidenced by the Note secured by the Agency Deed of Trust, which Agency Loan is composed entirely of HOME funds. (b) This Agreement is intended to facilitate Participant's acquisition of the Site and rehabilitation of an existing apartment building located thereon for rental to very low income tenants. 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 thirty(30) years as rental housing, with all of the Units restricted to occupancy to Very Low Income Tenants. 2.2 The Redevelopment Plan. This Agreement is made in accordance with the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project") which was approved by adoption of Ordinance No. 3343 on December 16, 1996, and which merged together four different, previously approved project areas. The Site is located outside of the Merged Redevelopment Project. Agency intends this Agreement to meet its obligations pursuant to Health and Safeh? Code Sections 33413, 33334.2 and 33413(b)(2)(A)(10. 2.3 Participant. The Participant is Shelter for the Homeless, Inc., dba American Lodging, a California nonprofit corporation, whose address is 15161 Jackson Street, Midway City, CA 92655. 2.4 Term of Agreement. The term of this Agreement shall be for a period of thirty (30) years; with such period commencing on the Effective Date of this Agreement. 2.5 Prohibition Against Transfers,• Right of First Refusal. (a) The qualifications and identity of the Participant are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant. No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein. 5 Sf-2000 AQree:OCC H:O PA 0212 5M r fi f I i/g" � y� i a � ♦ //� �� i g,l %s_: ��J /� Y I III 3 G City of1Huntngton Beach' March 20, 2000 . A 6h dirl Item F 1 z ° D} k IR Yr L3 h Background Shelter forEthe Homeless currently owns an 8 unit building::at 7801 Barton Drive in Oakview x i Thzs facility is usedym con�urichon with supportive services to transition at risk very low income families into stable housing= An adjacent 4=unrtsbuilding is for sale which Shelter ,z will buy;rehabihtate;�and manage R� 4 - , Proposal # Shelter will buy the Barton.Drive building-for $285,000 * The City will provide $350,000 of HOME funds as a residual receipts loan to cover: 771 - ■ Acquisition $285,000 ■ Closing costs $10,000 ■ Rehabilitation S55,000 * Shelter will invest not less than $30,000 of its own funds for rehabilitation. - Proposal X All units will be"rented-to very low-income families with supportive,services provided by Shelter x Rents will be affordable to very low-income families ■ All units are 2-bedroom ■ The current affordable rent is $550 per month 2 5 _ 3 Household Income Limits Household Size Median Income Very Love•-Income 1 S48,700 $24,350 2 555,700 $27,850 3 S62,600 $31,300 4 S69,600 $34,800 5 $75,200 $37,600 6 $801700---T $40,350 Loan Terms- . X Income and rent restrictions will.remain on property for 30-years • Loan repayment will begin in 3-years • Monthly payments will be the higher of; ■ $1,200 ■ Half of residual cash flow • City has first right to re-purchase or right to approve any subsequent buyer • Shelter will use any excess rent revenue to establish a threshold project reserve s 3 C Additional Loan Terms # During Rehabilitation ■ Tenant relocation will be provided by Shelter ■ Asbestos & lead-based paint will be remediated ■ All work will be approved by the Agency • After Rehabilitation ■ Maximum unit occupancy will be enforced ■ Property maintenance will be monitored ■ Adequate fire and hazard insurance will be provided ■ In case of default by Shelter,the Agency's loan will become immediately due Recommended City Action X Temporarily waive the City's insurance requirements until the close of escrow. This will allow the Agency to approve the loan with Shelter in time to close escrow. 4 Recommended Agency Action * Approve the $350,00 loan agreement with Shelter for the Homeless for the purchase and rehabilitation of 7802 Barton Drive * Authorize the Chairman and Clerk to execute/record the loan agreement and all attachments * Authorize the transfer of HOME funds to escrow at Apex Escrow Company for the property acquisition The End 5 COVER PAGE REQUEST FOR LATE SUBMITTAL (To accompany RCA) 7,1 IDepartment: Economic Development Eub';ct : Approve rt Council Meetin Date: 3/20/00 Date of This Request: 3/9/00 REASON (Why is this RCA being submitted late?): Unexpected delivery of a document from the City Attorney. EXPLANATION (Why is this RCA necessary to this agenda?): The seller of the property is anxious to close escrow by the end of March, if possible. CONSEQUENCES How shall delay of this RCA adversely impact the City?): Possible loss of the opportunity to purchase this strategic property. Signature: proved enied DepartmAl Head Ray Silver City Administrator LATESUBM.DOC 07/14/94