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HomeMy WebLinkAboutCDC/2009-39 1 2 3 4 5 6 7 8 (NOTE: COMPANION RESOLUTION 2009-289) RESOLUTlON NO. CDC/2009-39 RESOLUTlON OF THE COMMUNITY DEVELOPMENT COMMISSlON OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE INTERIM EXECUTlVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE 2009 AFFORDABLE SENIOR CITlZEN RENTAL HOUSING ACQUlSITlON, DISPOSITlON AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE AGENCY AND META HOUSING, INC. - MAGNOLIA HIGHLAND, L.P. (NORTHWEST REDEVELOPMENT PROJECT AREA) WHEREAS, the Redevelopment Agency of the City of San Bernardino ("Agency") is a 9 public body, corporate and politic; and 10 WHEREAS, the Agency will own properties located on the southwest corner of Highland 11 Avenue and Medical Center Drive (APN's: 0143-191-38, 46, and 63 collectively, the "Property"); 12 and 13 WHEREAS, the Agency will acquire the Property through an assignment of interest under a 14 purchase contract between Meta Housing, Inc. - Magnolia Highland, L.P. (the "Developer"), and 15 the respective property owners for purchase ofthe Property pending final disposition; and 16 WHEREAS, the Agency proposes to transfer the Property to the Developer in accordance 17 with the terms and conditions of the "2009 Affordable Senior Citizen Rental Housing Acquisition, 18 Disposition and Development Agreement (the "DDA"); and 19 WHEREAS, the Developer shall develop and improve the Property as may hereafter be 20 transferred by the Agency to the Developer pursuant to the DDA with 79 units of affordable senior 21 citizen rental housing and one on-site manager's unit ("Project"), using the design and 22 improvement standards which are consistent with City Tentative Parcel Map No. 19200 23 (Subdivision No. 09-02) and City Conditional Use Permit No. 09-05, as previously approved by the 24 Planning Commission on May 19,2009; and 25 WHEREAS, the Developer has the background, expenence and financial capability to 26 develop the Project and is seeking a deferred payment second trust deed residual receipts loan from 27 the Agency in an amount up to $4,000,000; and 28 1 D_' '''~riA.<'.l>~o^'''''nn.\l>p."I",;,,"<\'~~Q\n~_01_OQ MM" Hnll,in<! Ino COC Resolution (Con'tl,doc CDC/2009-39 1 WHEREAS, the Agency loan will be combined with other funds the Developer is seeking 2 including an allocation of low-income housing tax credits from the California Tax Credit Allocation 3 Committee ("TCAC") to provide funds in the amount of $10,621,198, and a permanent first trust 4 deed loan in an amount up to $2,928,053 to complete the financing of the Project with an estimated 5 total development cost of $17,549,251; and 6 WHEREAS, it had been determined that the environmental review of the Agreement with 7 regards to the disposition and development of Agency Property is a "categorically exempt project" 8 for the reasons indicated in the Agency Staff Report, and no potentially adverse environmental 9 effects are anticipated to be associated with the redevelopment of the Project; and 10 WHEREAS, the Agency has prepared and published a notice of joint public hearing in The 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 San Bernardino County Sun Newspaper on July 4, 2009, and again on July 10, 2009, regarding the consideration and disposition of the Property to the Developer; and WHEREAS, pursuant to Health and Safety Code Section 33433(b), the Agency may transfer the Property to the Developer subject to the Mayor and Common Council of the City of San Bernardino ("Council") and the Community Development Commission of the City of San Bernardino ("Commission") adopting a Resolution by the Council authorizing the Agency to transfer the Property in light of the findings set forth in such Resolution, pursuant to Health and Safety Code Section 33433; and WHEREAS, the Agency has prepared a Summary Report that describes the salient points of the DDA and identifies the cost to the Agency of the disposition and development of the Property. NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: Section 1. The Recitals ofthis Resolution are true and correct. Section 2. On August 3, 2009, the Commission conducted a full and fair joint public hearing with the Council, and considered the written Agency Staff Report relating to the DDA, the Summary Report and the testimony submitted relating to the disposition and development of the Property by the Developer pursuant to the terms and conditions of the DDA. The minutes of the 28 2 1> \A",.n~,.\1l~...1"t;""<\R~<<lh,ti,,n<\2009\08.03_09 Meta Housin~. Inc. CDC Resolution (Con't).doc CDC/2009-39 1 City Clerk for the August 3, 2009, joint public hearing of the Commission and the Council shall 2 include a record of all communication and testimony submitted to the Commission and the Council 3 at the joint public hearing by interested persons relating to the Summary Report, the Project and the 4 approval of the DDA. 5 Section 3. This Resolution is adopted in order to satisfy the provisions of Health and 6 Safety Code Section 33433 as those provisions relate to the disposition of the Property by the 7 Agency to the Developer on the terms and conditions set forth in the DDA. The Commission 8 hereby finds and determines as follows: 9 10 11 12 13 (i) The Summary Report contains the information described in Health and Safety Code Section 33433(a)(2)(B); (ii) The disposition and redevelopment of the Property by the Developer in accordance with the DDA is consistent with the affordable housing supply preservation and expansion programs of the Agency Housing Implementation Plan; 14 (iii) The terms and conditions of the DDA contain assurances that the Developer will 15 16 17 18 19 20 21 22 23 24 25 26 27 28 redevelop the Property; (iv) As required by Health and Safety Code Section 33433(b)(2), the disposition and redevelopment of the Property by the Developer in accordance with the DDA is not less than the fair reuse value at the use and with the covenants and conditions and development costs as affordable senior housing and with the covenants and conditions and development costs authorized by said DDA; and (v) The disposition of the Property to the Developer on the terms set forth in the DDA shall assist in the elimination of conditions of blight on the Property and in the Northwest Redevelopment Project Area. Section 4. The Commission hereby finds and determines that the enviromnental review of the DDA and the redevelopment activities contemplated thereunder is a "categorically exempt project" for the reasons indicated in the Agency Staff Report. No potentially adverse enviromnental effects are anticipated to be associated with the redevelopment of the Property, and accordingly based upon its own independent review of the information provided to the Commission regarding 3 P-\Aopnrl..\Rp<Cll,ltjon<\Rp<ollltin",\2009\08-03-09 Meta Hoosin~. Inc. cve Resolution (Con'tl.doc CDC/2009-39 1 the Property; the Commission hereby authorizes the filing of a Notice of Exemption under CEQA 2 relating to the Project. 3 Section 5. The Commission hereby receives and approves the Summary Report aod the 4 DDA in the form as submitted at this joint public hearing. 5 Section 6. The Commission hereby approves the disposition of the Property by the 6 Agency to the Developer on the terms set forth in the Agreement and hereby authorizes the Interim 7 Executive Director of the Agency to execute the DDA on behalf of the Agency aod the Interim 8 Executive Director of the Agency is hereby authorized to make minor corrections, additions, 9 clarifications, interpretations to the DDA, provided said chaoges are not substaotive in nature, do 10 not increase the monetary impact to the Agency aod are consented to by the Agency Counsel. 11 Section 7. 12 /II 13 /II 14 /II 15 /II 16 /II 17 /II 18 /II 19 /II 20 /II 21 /II 22 /II 23 /II 24 1/1 25 /II 26 /II 27 /II 28 /II This Resolution shall take effect upon its adoption aod execution. 4 P:\;\.~enda,\R.sotut;om\Re,oluliom\2009\OS-03-09 Meta Hou,ing.. Inc. CDC Resolution (Con't),doc 1 2 3 4 5 6 7 CDC/2009-39 RESOLUTlON OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDlNO APPROVING AND AUTHORlZING THE INTERlM EXECUTlVE DlRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE THE 2009 AFFORDABLE SENIOR CITlZEN RENTAL HOUSING ACQUISITION, DlSPOSITlON AND DEVELOPMENT AGREEMENT ("DDA") BY AND BETWEEN THE AGENCY AND META HOUSING, INC. - MAGNOLIA HIGHLAND, L.P. (NORTHWEST REDEVELOPMENT PROJECT AREA) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 8 Development Commission of the City of San Bernardino at a i oint regular 9 thereof, held on the 3rd 10 Commission Members: 11 ESTRADA 12 BAXTER 13 BRINKER 14 SHORETT 15 KELLEY 16 JOHNSON 17 MC CAMMACK 18 19 20 meeting day of Augus t ,2009, by the following vote to wit: Aves Navs Abstain Absent X X X X X X X ~ C... secre~ . . . ... 21 The foregoing Resolution is hereby approved this 6th day of August 22 ,2009. ~ Mo~rperson Community Development Commission of the City of San Bernardino 23 24 25 26 Approved as to Form: 2287 By: \t~Aui . gency b~s~l 5 P:\A~endas\Resolotjons\Resolutions\1009\Og-03-09 Meta Housin~, Inc. CDC Resolution (Con'l).doc CDC/2009-39 2009 AFFORDABLE SENIOR CITIZEN RENTAL HOUSING ACQUISITION, DISPOSITION AND DEVELOPMENT AGREEMENT (Northwest Redevelopment Project: Meta Honsing Corporation and Magnolia Highland, LoP.) THIS 2009 AFFORDABLE SENIOR CITIZEN RENTAL HOUSING ACQUISITION, DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is dated as of August 3, 2009, by and between Magnolia HigbIand, L.P., a California limited partnership (the "Developer"), and the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency"). This Agreement is entered into with respect to the facts presented in the following Recitals: FOR GOOD AND VALUABLE CONSIDERATION, THE DEVELOPER AND THE AGENCY HEREON PROMISE, COVENANT AND AGREE FOR THEMSELVES AND THE SUCCESSORS AND ASSIGNS OF EACH OF THEM AS FOLLOWS: SECTION 1.1. Intel!ration of Understandinl!: Identification of Parties. (a) The Agency has previously accepted the proposal of the Developer's predecessor in interest, Meta Housing Corporation, under certain correspondence of the Agency, dated March 20, 2009 (the "NOF A Ranking Letter") to undertake the "Project" as this term is described in this Agreement. The Developer and the Agency hereby acknowledge and agree that on the "Effective Date," as this term is defined below in this Agreement, this Agreement shall supercede the NOF A Ranking Letter, and , no provision of the NOF A Ranking Letter shall have any further force or effect after the Effective Date. (b) This Agreement constitutes the entire agreement of the Developer and the Agency with respect to the subject matter covered herein. The Developer and the Agency agree that there are no other agreements or understandings between the Agency and the Developer except as set forth in this Agreement. The Developer and the Agency further agree that no representation has been made by either party to the other as an inducement to enter into this Agreement. The Developer and the Agency agree that all prior representations and negotiations between the parties under the NOF A Ranking Letter or subsequent to the date of the NOFA Ranking Letter, are superceded by this Agreement. (c) The text of the Agency resolution approving this Agreement, is incorporated by this reference into this Agreement and is made a part hereof. (d) Prior to the execution of this Agreement, Meta Housing Development Corporation, a California corporation ("Meta"), entered into the various agreements for the acquisition and purchase of the Property as defined herein and has formed the Developer prior to the date of this Agreement. Meta has extensive experience through the individuals acting as the principals of Meta to undertake all obligations required by Meta and the Developer pursuant to this Agreement and to enter into the Meta Housing Corporation Guaranty for the repayment ofthe Initial Agency Loan Advance, the Agency Loan Note, the Agency Loan Deed of Trust, the Developer Assignment of Licenses, Permits and Contracts as further provided in the definition of Agency Loan Documents. I P:\AgendasIAgenda Attachments\Agenda AllachmentslAgenda Anacnments\Agrmls-Amend 2009\08-03-09 Meta Housing _ Final DDAdoc CDC/2009- 39 SECTION 1.2. Environmental Impact Evaluation of the Proiect Under the California Environmental Oualitv Act. (a) As part of the consideration of the City of San Bernardino Planning Commission of the development project application for approval oftentative Parcel Map No. 19200 and City Conditional Use Permit No. 09-05, the City of San Bernardino has previously certified under the California Environmental Quality Act ("CEQA"), that the Project is a "Class 32 Categorically Exempt Project", as this term is defined under the applicable regulations ofCEQA. The Community Development Commission ofthe City of San Bernardino acting by and for the Agency, as a "responsible agency" to the City of San Bernardino, finds and determines that the Project is a categorically exempt Class 32 project under CEQA. (b) In the event that the implementation by the Developer of one or more particular elements of the Project may require additional review under CEQA, the parties shall consult with each other with respect to such additional CEQA study, as may then be indicated. Nothing in the preceding sentence shall be deemed to be a commitment or an obligation of the Agency to pay for any such additional cost of CEQA study, and the Agency reserves its discretion to approve or disapprove any such additional CEQA study cost or expense which would be payable by the Agency. SECTION 1.3. Purno.e of Al!reement. The purpose of this Agreement is to effectuate the Redevelopment Plan for the Northwest Redevelopment Project by providing affordable rental housing loan assistance to the Developer to: (i) acquire the Site from the Agency for redevelopment as affordable senior citizen rental housing and; (ii) design, construct, install, finance and place the Project in use and occupancy by Senior Citizens Households and Lower-Income Senior Citizen Households. The redevelopment of the Project on the Site 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 regulations under which the Project has been undertaken and is being assisted. SECTION 1.4. Definitions. In addition to the meaning ascribed to certain words and phrases as set forth in the Recitals of this Agreement or in other sections of this Agreement including any of the Attachments to this Agreement, other words and phrases shall have the meaning described below: . Affordable Rental Units. The words "Affordable Rental Units" mean and refer to the senior citizen multi-family rental housing dwelling units to be constructed by the Developer as part of the Project. Each ofthe Affordable Rental Units shall be reserved for occupancy by Senior Citizen Households at an "affordable rent" in compliance with the lowerrent level for each Affordable Rental Unit set forth in either the State TCAC Regulatory Agreement or the Agency Regulatory Agreement. . Agency Acquisition Escrow. The words "Agency Acquisition Escrow" mean and refer to the land transfer transaction account by and among the Escrow Agent, each of the owners of the parcels of land which comprise the Property and the Agency. The Agency shall acquire the Property upon the close of the Agency Acquisition Escrow. . Agency Grant Deed. The words "Agency Grant Deed" mean and refer to the instrument of conveyance for the transfer by the Agency of the Site to the Developer. The general form of the Agency Grant Deed is Attachment No.6 of this Agreement. 2 I)'\A_~~.o\Annn~. A""'~"'''''f<\A''nn~' A"or.~m,."..\A,,~nd, Att.dment,\A01"mt...Amend 2009\08.03.-09 Meta Housin~ - Final DDA.doc CDC/2009-39 . Agency Loan. The words "Agency Loan" mean and refer to the loan to be originated by the Agency in favor of the Developer in a principal amount not to exceed Four Million Dollars ($4,000,000). The provisions ofthe Agency Loan are set forth in Section 2.8. The Agency Loan shall be evidenced by the Agency Loan Note (Attachment No. 10) and shall be secured by the Agency Loan Deed of Trust (Attachment No. II) and the other Agency Loan Documents. . Agency Loan Deed of Trust. The words "Agency Loan Deed of Trust" mean and refer to the deed of trust which encumbers the Site and the Project as security for the repayment ofthe Agency Loan. The general form of the Agency Loan Deed of Trust is Attachment No. I I of this Agreement. . Agency Loan Documents. The words "Agency Loan Documents" means and refers to collectively, all of the documents executed by the Developer in favor of the Agency which either evidence the Agency Loan or provide the Agency with security for the repayment of the Agency Loan. The Agency Loan Documents include without limitation the Meta Housing Corporation Guaranty for the repayment of the Initial Agency Loan Advance, the Agency Loan Note, the Agency Loan Deed of Trust, the Developer Assigmnent of Licenses, Permits and Contracts. . Agency Loan Note. The words "Agency Loan Note" mean and refer to the promissory Note of the Developer payable to the Agency which evidences the Agency Loan. The form of the Agency Loan Note is Attachment No. 10 of this Agreement. . Agency Regulatory Agreement. The term "Agency Regulatory Agreement" means and refers to that certain Lower-Income Senior Citizen Household rental housing regulatory agreement and declaration of covenants and restrictions by and between the Developer and the Agency affecting the Site and the Project subject to subordination by the Agency to the Construction Loan and the Permanent Loan. The form of the Agency Regulatory Agreement is Attachment No. 9 of this Agreement. . Agency Subordination Agreement for Project Financing. The words "Agency Subordination Agreement for Project Financing" mean and refer to the form of one or more loan subordination agreements by and between the Developer and the Agency in favor of a lender who provides permitted development financing for the Project as set forth in this Agreement. The first such Agency Subordination Agreement for Project Financing shall be in favor ofthe Construction Lender in support of the Construction Loan, and the second shall be in favor of the Permanent Lender in support of the Permanent Loan. The Agency Subordination Agreement for Project Financing with respect to the Construction Loan and/or Permanent Loan may be in the form of an intercreditor agreement among the Agency and other holders of security interests in the Project in the event that the Developer may obtain a Construction Loan or a Permanent Loan, as applicable, from multiple lending sources, such as a portion of such construction financing from a conventional lender and a portion from an instrumentality of the State of California, including without limitation the California Housing Finance Agency. Each such Agency Subordination Agreement for Project Financing shall be for a permitted Security Financing Interest and shall be subject to the terms and conditions ofthis Agreement; provided, however, that the Senior Citizens Rental Housing Use Covenant as set forth in Attachment No.7 to this Agreement shall never be subject to such subordination. The Agency shall not be obligated nor required to execute and deliver any subsequent Agency Subordination Agreement for Project Financing except at its sole discretion. 3 P:\A)l;endasIAl(cnda AttachmentslA;:enda AllachmentslMtenda Altachment,\A~rmts-Amend 2009\08-03-09 Meta HQusin~. Fi""J nnA ~"c CDC/2009-39 . Certificate of Completion. The term "Certificate of Completion" means and refers to that certain Certificate of Completion which is Attachment No. 12 of this Agreement. . City. The term "City" means and refers to the City of San Bernardino. . Closing/Closing Date/Close of Site Transfer Escrow. The terms "Closing", "Closing Date" and "Close of Site Transfer Escrow" shall mean the date on which the conditions for the transfer of the Site to the Developer (Parcel No. I of tentative Parcel Map No. 19200) have been satisfied and the Agency Deed of Trust and the Agency Grant Deed, the Agency Regulatory Agreement and the related Agency instruments are filed for record in the Office of the County Recorder of San Bernardino County, California. The Closing shall occur on or before the date provided in the Schedule of Performance. . Construction Lender. The words "Construction Lender" means and refers to the entity or entities which provides the Construction Loan to the Developer. . Construction Loan. The words "Construction Loan" mean and refer to the loan (or collectively loans from multiple sources, including instrumentalities of the State of California) which the Developer shall hereafter obtain in an approximate principal amount presently estimated to be that amount as set forth on the Developer Project Pro Forma submitted by the Developer to the Agency, subject to modifications as may be approved by the Agency Executive Director, in order to provide for the construction and improvement of the Project. The Construction Loan may be derived from one or more sources of financing obtained by the Developer, including without limitation from an instrumentality of the State of California, from the proceeds of a construction loan provided by a state or federally regulated third-party lending institution, or from a combination of these. . Construction Loan Documents. The words "Construction Loan Documents" mean and refer to the various documents and instruments by and between the Developer and the Construction Lender which evidence the Construction Loan for the improvement of the Project. . Construction Loan Escrow. The words "Construction Loan Escrow" mean and refer to the loan financing transaction account by and between the Developer, Construction Lender and the Escrow Agent through which the initial disbursement of the Construction Loan shall be paid to the Developer. The Construction Loan Escrow shall close concurrently with the Close of the Site Transfer Escrow. The Agency shall not be party to the Construction Loan Escrow. . Days. The word day or days shall mean calendar days in all instances unless modified specifically to mean business days to thus exclude weekends and holidays from the calculation of the number of days. . Developer. The words Developer means Magnolia Highland, L.P., a California limited partnership, duly formed by Meta Housing Corporation ("Meta"), as an affiliate of Meta. unless otherwise specifically set forth to the contrary in this Agreement. . Developer Acquisition Escrow Assignment Agreement. The words "Developer Acquisition Escrow Assignment Agreement" means and refers to the agreement by and between the Developer and the Agency, whereby the Developer assigns to the Agency the real property purchase agreements by and between the Developer and each of the following owners of property which comprise the Property and as set forth on Attachment No.5 to this Agreement: 4 P.\A~enda,\Nlenda Attachments\A~enda Attachmenls\A,<(enda Attachments\A;!;rmls-Amend 2009\08,03.09 Meta Housing _ Final DDAdoc CDC/2009-39 (i) Elias C. Antonovich, et al; (ii) 11026 Long Beach, LLC, et al; and (iii) Harold Mirsh Survivors, et al. . Developer Assignment ofLieenses, Permits and Contracts. The words "Developer Assignment of Licenses, Permits and Contracts" means that certain assignment document to be executed and delivered by the Developer pursuant to this Agreement as further required by Section 2.8(f)(iii)(C). . Developer Equity. The words "Developer Equity" mean and refer to: (i) amounts of Developer Equity as shall be contributed to the Project by the Developer including such Developer Equity as may be provided by the Investor Limited Partners, as necessary in order to provide for the improvement ofthe Project, including such amounts as may be required by the Construction Lender under its construction loan underwriting standards; and (ii) other equity as the Investor Limited Partners may provide or require the Developer to contribute as set forth under the Tax Credit Limited Partnership Agreement; and (iii) if requested and approved by the Developer, other equity as the Agency may in its sole and absolute discretion elect to contribute to the Developer following the commencement of construction of the Project. . Developer Investigations. The words "Developer Investigations" means and refers to the Developer's due diligence investigations ofthe Property and the Site to determine the suitability of the Site for the Project. The scope ofthe Developer Investigation shall include all matters relevant to the Project as determined at the discretion of the Developer. . Developer Project Pro Forma. The words "Developer Project Pro Forma" mean and refer to the document dated June 3, 2009, prepared by the Developer and approved by the Agency on the date of approval ofthis Agreement, in support of the Developer's request for the Agency to consider the approval ofthis Agreement. The Developer Project Pro Forma, includes the Project Construction Budget. The Developer Project Pro Forma is included as part of Attachment No.4 of this Agreement. . Development Project Application. The words "Development Project Application" mean and refer to collectively the completed development project application materials as prepared by the Developer and submitted to the City for approval of each of the following Development Project Permits: (i) City tentative Parcel Map No. 19200; and (ii) City Conditional Use Permit No. 09-05. . Development Project Permit. The words "Development Project Permit(s)" means and refers to all ofthe regulatory and building permits which the Developer shall hereafter apply for and obtain from the City (and each of the other agencies with regulatory jurisdictions over the improvement of each element of the Project) following the approval by the City of the Project Development Application for the Project. 5 P.\Aopn~.<\A"pn~' Att.~hment.,\Aoenda Atla<:hm~nl,\A~enda Altachmem.\A.,,-ml,.Amend 2009\08-03-09 Meta Housin~. Final DDA.doc CDC/2009-39 . Due Diligence Period. The words "Due Diligence Period" mean and refer to the period of time following the Effective Date and prior to the Close of the Site Transfer Escrow, when the Developer shall conduct and complete all of its Developer Investigations. . Effective Date. The words "Effective Date" mean and refer to the date after the conclusion of a public hearing by the governing board ofthe Agency for the approval oflhis Agreement when each of the following events shall have occurred: (i) the governing board of the Agency has adopted its approving resolution containing the findings required by Health and Safety Code Section 33433; (ii) this Agreement has been fully executed by the Developer and the Agency; and (iii) the Developer Acquisition Escrow Acquisition Assignment Agreement has been fully executed by the Developer and the Agency. . Escrow Agent. The words "Escrow Agent" mean and refer to First American Title Insurance Company or such other escrow agent as mutually acceptable to the Developer and the Agency. The Escrow Agent shall administer each of the escrow accounts as identified in this Agreement, including the Agency Acquisition Escrow, the Site Transfer Escrow, the Construction Loan Escrow and the Permanent Loan Escrow, unless the parties to each such escrow may otherwise appoint another agent to serve as escrow agent for a particular transfer or transaction. . Hazardous Substances. The term "Hazardous Substances" means and refers to (i) any hazardous or toxic substance or material including petroleum, petroleum-based products, asbestos and asbestos containing materials ("ACM") and lead-based paint ("LBP"), or waste which is or becomes regulated by any local governmental authority, the State ofCalifomia or the United States Government and/or (Ii) any substance or material identified by the United States Government, the State of California or any local governmental authority as hazardous or toxic and which is included on any list of such substances published by any such governmental entity, provided, however that any such substance or material which is authorized by the United States Government or the State of California for use as a consumer product or in connection with the development, operation or maintenance ofthe Project when used in accordance with applicable law, shall not be deemed to be a Hazardous Substance for the purpose of subphase (ii) of this definition of Hazardous Substance. . Investor Limited Partner. The words "Investor Limited Partner" mean and refer to the tax credit equity investor who is a party to the Tax Credit Limited Partnership Agreement with the Developer. . Lower-Income Senior Citizen Household. The term "Lower-Income Senior Citizen Household" shall refer to a Senior Citizen Household which has the household income characteristics of a lower income household as defined in Health and Safety Code Section 50079.5. . Notice of Acceptance ofthe Site. The words "Notice of Acceptance of the Site" means and refers to the acknowledgment of acceptance of the condition of the Site as executed and delivered by the Developer to the Agency in the form reasonably acceptable to the Interim Executive Director of the Agency. The Developer shall execute such Notice of Acceptance of the Site based solely upon the Developer's Investigations of the Property and the Site as set forth in Section 2.13. 6 P;\Agendas\Agend. ArtachmentslAgenda AttachmeIlt,\A~enda Anachmenls\A~rmts-Amend 2009\08-03-09 Meta Hnu<;na _ Finol nnA rlM CDC/2009-39 . "Operating Expenses" shall mean actual, approved reasonable and customary costs, fees and expenses directly attributable to the operation, recordkeeping, maintenance, taxes and management ofthe Project, including but not limited to, a commercially reasonable property management fee; taxes and assessments; payroll and payroll taxes for property employees; insurance; security, painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, cleaning and building supplies; approved recreational amenities and supplies; purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishing; fire alarm monitoring; fees and expenses of accountants, attorneys, consultants and other professionals. Expenses for the purpose of calculating residual receipts are subject to Agency's reasonable approval and shall be calculated on a cash basis. Depreciation and debt service payments are not eligible operating expenses for calculating residual receipts. . Permanent Lender. The words "Permanent Lender" mean and refer to the mortgage lender who shall provide a permanent mortgage loan to the Project following the completion of improvement of the Project. The Permanent Lender shall provide a loan to the Developer and the Project which shall be used and applied to repay the Construction Loan in full. . Permanent Loan. The words "Permanent Loan" mean and refer to the permanent mortgage loan which the Developer shall hereafter obtain in an approximate principal amount presently estimated to be that amount as set forth on the Developer Project Pro Forma as submitted by the Developer to the Agency, subject to modifications as may be approved by the Agency Executive Director, in order to provide for the release and reconveyance of the Construction Loan and the long term financing for the capital costs associated with the development and financing ofthe Project. The Permanent Loan may be provided by the Construction Lender and shall be subordinate to the Senior Citizens Rental Housing Use Covenant. Any refinancing of the initial Permanent Loan may be undertaken by the Developer provided that any such refinancing does not increase the then outstanding principal balance of the initial Permanent Loan or extend the repayment thereof unless approved by the Agency at its sole discretion. Any other refinancing of the initial Permanent Loan that is not in compliance with the preceding sentence shall not be subordinate to the Agency Loan Deed of Trust and the Agency Regulatory Agreement. . Permanent Loan Documents. The words "Permanent Loan Documents" mean and refer to the various documents and instruments by and between the Developer and the Permanent Lender which evidence the Permanent Loan for the development and financing of the Project. . Permanent Loan Escrow. The words "Permanent Loan Escrow" mean and refer to the loan financing transaction account by and between the Developer, the Permanent Lender and the Escrow Agent through which the Construction Loan shall be repaid in full to the Construction Lender and the proceeds of the Permanent Loan are disbursed to the Developer. . Project. The term "Project" shall mean all of the work of investigation, design, construction, improvement, modification, and financing necessary in order for the Developer to acquire the Site and construct and place in service thereon the affordable senior citizen rental housing project consisting of not more than seventy nine (79) rental units reserved for occupancy by Senior Citizen Households and one (I) unit for occupancy by on-site management personnel. The Project also includes all related landscaping, driveways, utilities, and any improvements which may be required by the City on the Site or within the public rights-of-way adjacent to the Site. The functional 7 P'\Aopn~..\Aapnrl. A".r~mp~"\"'a"nrl, Att.rhm...,t<\Aopnrl, Attorhmp"t<\,Aa.m".Ampnrl ?nn<l\M_m_~QM.... l-l"".;m,. ~;m] nru rlne CDC/2009-39 elements of the Project are more particularly described in the Scope of Development and Site Improvement Plan at Attachment No.2 of this Agreement (the "Scope of Development"). . Project Accounting Year. The term "Project Accounting Year" means and refers to the tax year accounting period designated by the Developer in its Tax Credit Limited Partnership Agreement. . Project Construction Budget. The words "Project Construction Budget" means and refers to the budget of construction costs for the Project as prepared by the Developer. The Project Construction Budget includes a reasonable course of construction contingency reserve and reserves for marketing and leasing the completed rental units in the Project for initial occupancy by Senior Citizen Households. The Project Construction Budget is included in the Developer Project Pro Forma. . Property. The word "Property" means and refers to the lands as depicted in the land subdivision document approved by the City as tentative Parcel Map No. 19200 upon approval of the Development Project Application. The Property is located in the redevelopment project areaofthe Northwest Redevelopment Project. A composite legal description of the three (3) separate parcels of land which comprise the Property which is Attachment No. I A of this Agreement. The Site comprises only a portion of the Property, which is generally depicted as Parcell of tentative Parcel Map No. 19200 which is Attachment No. IB of this Agreement. . Purchase Price. The term "Purchase Price" shall mean that amount payable by the Developer to the Agency for the purchase of the Site from the Agency, which Purchase Price is Two Million Four Hundred Seventy Seven Thousand Six Hundred and Five Dollars ($2,477,605), exclusive of any Site Transfer Escrow Closing costs. . Redevelopment Plan. The term "Redevelopment Plan" shall mean the Redevelopment Plan for the Northwest Redevelopment Project. A copy of the Redevelopment Plan is on file in the Office of the City Clerk of the City. The Redevelopment Plan is incorporated herein by this reference as though fully set forth herein. . Residual Rental Receipts of the Project. The term "Residual Rental Receipts of the Project" and "Residual Rental Receipts" and "Residual Receipts" mean and refer to fifty percent (50%) of "Revenues" of the Developer remaining on any scheduled debt service date or other payment date under the Agency Loan Note, reduced in the following order: (1) Operating Expenses calculated on a cash basis; (2) debt services on senior debt secured by the senior position deeds of trust; (3) cash payments to any reserves required by the Tax Credit Limited Partnership Agreement or the documents evidencing the Construction Loan and/or the Permanent Loan; (4) repayment of general partner loans; (5) cash payments of deferred Developer fees; and 8 P:\A""nd..IA<!enda Anaohmenl,\A~end. Allachmem,\A~enda Anachmenls\A,mm,.Amend 2009\08_03.09 Meta Hnu,lnQ _ Final DDA doc CDC/2009-39 (6) partnership management fees and asset management fee each Project operating year up to Fifteen Thousand Dollars ($15,000) in the aggregate, increasing by three percent (3%) armually following the completion date of the Project as provided in Section 3.11 of this Agreement. . "Revenue" with respect to a particular fiscal year shall mean all revenue, income, receipts, and other consideration actually received from the operations of the Project. Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance (if not used to replace or repair the Project or repay any permitted financing); and condemnation awards for a taking of part of all ofthe Project for a temporary period. Revenue shall also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion ofthe Project. Revenue shall not include tenants' security deposits, interest on security deposits, loan proceeds, capital contributions or similar advances, amounts released from reserves or interest on reserves provided that such reserves and interest are used for the purposes for which the reserves were established. . Schedule of Performance. The term "Schedule of Performance" shall mean that certain schedule of Project development performance milestones set forth in Attachment No.3 ofthis Agreement, and as the same may hereafter be amended by the mutual written agreement of the parties. . Security Financing Interest. The words "Security Financing Interest" means and refers to any permitted third-party financing security interest which may encumber the Site as set forth in Section 3.9 Security Financing Interest include the Construction Loan Documents and the Permanent Loan Documents, as applicable. . Senior Citizen Household. The term "Senior Citizen Household" shall mean and refer to a person or family eligible to occupy a rental dwelling unit at the Project under the Agency Regulatory Agreement, who is/are at the time of initial occupancy of the rental dwelling unit by such person(s): (i) 62 years of age or older; and, if applicable (ii) provided at least one (I) member of the household is (i) 62 years of age or older with such household limited to two (2) adult individuals, and (ii) a "qualified permanent resident", as this term is defmed in Civil Code Section 51.3(b)(2) with no minor children comprising such household except as required by Civil Code Section 51.3(b)(3). . Senior Citizen Rental Housing Use Covenant. The words "Senior Citizen Rental Housing Use Covenant" mean and refer to the land use covenant by and between, the City and the Agency which shall be recorded concurrently with Parcel Map No. 19200. The form ofthe Senior Citizen Rental Housing Use Covenant is set forth in Attachment No.7 of this Agreement and at all times shall be in a first recorded priority position superior to that of the Construction Loan and the Permanent Loan for the period of time as set forth in said Covenant provided that the Project remains in existence. 9 P.\A~pn~.<\A""n~' A".~~mpn',\Aopnrl, A!t.~hmpnt<\Aopnrl. An.~hmpnt,\Ao'm".Amp~~ ?llnQ\~R_l\l_n{) M... I-t~,,,;~,, _ l';n.l nnA ~~ CDC/2009-39 . Site. The term "Site" means and refers to that portion of the Property, consisting of approximately 2.5 acres ofland (more or less) and more particularly illustrated or depicted as Parcell of tentative Parcel Map No. 19200. A copy of tentative Parcel Map No. 19200, in the form as approved by the City as part of the Development Project Application, is set forth in Attachment No. 1B of this Agreement. . Site Transfer Escrow. The words "Site Transfer Escrow" means and refers to land transfer transaction account by and among the Developer, the Escrow Agent and the Agency. The parties shall cause the Site (e.g., Parcel I of Parcel Map No. 19200) to be conveyed from the Agency to the Developer upon the Close of the Site Transfer Escrow. . State TCAC. The words "State TCAC" mean and refer to the State of California Tax Credit Allocation Committee. . State TCAC Regulatory Agreement. The words "State TCAC Regulatory Agreement" mean and refer to the affordable rental housing regulatory agreement by and between the Developer and the California Tax Credit Allocation Committee (as established under Health and Safety Code Section 50199.8) which shall affect the Site and the Project, whereby the Project shall be made subject to compliance with the conditions of affordable rental dwelling unit tax credit eligibility under Section 42 of the Internal Revenue Code, and all applicable Revenue Rulings of the Internal Revenue Service. . Tax Credit Limited Partnership Agreement. The words "Tax Credit Limited Partnership Agreement" mean and refer to the federal affordable rental housing tax credit limited partner investor agreement by and between the Developer and one or more ofits Investor Limited Partners. A draft of which document is on file with the Agency as of the date of execution of this Agreement. The final form of such Tax Credit Limited Partnership Agreement shall be subject to the written approval of the Agency prior to the Close of the Construction Loan Escrow and such approval shall not be unreasonably withheld, conditioned or delayed. . Title Company. The term "Title Company" shall mean First American Title Insurance Company or such other title company mutually agreeable to the Agency and the Developer. SECTION 1.5. Parties to this Aereement. (a) The parties to this Agreement are the Developer and the Agency. The City is not a party to this Agreement nor is the City responsible in any manner for the representations of the Agency contained herein, for any financial obligation ofthe Agency set forth in this Agreement or for any other covenant or undertaking of the Agency in favor of the Developer as arise, under this Agreement. (b) The Developer is as identified above. The principal office ofthe Developer for purposes of this Agreement is currently located at 1640 South Sepulveda Boulevard, Suite 425, Los Angeles, California 90025. (c) Prior to the Effective Date, the Developer has provided the Agency with satisfactory evidence of the legal formation and existence ofthe Developer and the good standing of the Developer to transact business within the State, and to accept transfer of the Site from the Agency by the Developer. 10 P:\A~enrl..\AQend.. Atl.cbm"m.\A~"nda Attachment.IAQenda AnachmetlIS'AQrmt,.Amend 2009\0&_0]_09 Met. Hn",inQ _ Fin.l nnA dnc CDC/2009-39 SECTION 1.6. Chan!!e in Developer Ownership Mana!!ement and Control of the Develooer--Assit!oment and Transfer. (a) The word "Transfer" as used in this Section 1.6, and elsewhere in this Agreement means: (I) Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any other mode or form or series of such sales, assignments or contracts or agreements to do any ofthe foregoing or the like which results in a change in: (i) more than twenty-five percent (25%) of the shareholders of the Developer; (ii) if all of the interest of the Developer in this Agreement has been transferred to a partnership in which the Developer is the sole general partner and thereafter, there is a change of more than twenty-five percent (25%) of the interests ofthe shareholder in Meta Housing Corporation or in the sole general partner of the Developer such that Meta Housing Corporation is not the sole general partner or managing general partner of the Developer; or (iii) if none of the foregoing subphrases applies to a particular Transfer, more than fifty percent (50%) of the ownership or equity interest ofthe Developer's interest in this Agreement is sold assigned, conveyed or the like, (each of the events described in subphrases (i), (ii) and (iii), above being referred as "Change of Control"); or (2) Any total or partial sale, assignment, conveyance, or transfer by the Developer of the Project and/or this Agreement in any other mode or form, of or with respect to any ownership interest in Developer which results in a Change of Control; or (3) Any merger, consolidation, sale or lease of all or substantially all of the assets of the Developer in this Agreement, any Developer Land, the Site or any part thereof or any interest therein or the improvements construction thereon (or series of such sales, assignments and the like) which results in Change in Control; or (4) Any total or partial sale, assignment or conveyance or any trust or power, or any transfer in any other mode or form (or series of such sales, assignments or other transfers) which results in the reduction of the ownership interest of Meta Housing Corporation having less than a fifty percent (50%) ownership interest in the Developer; or (5) Any sale, assignment or conveyance or any trust or power, or any transfer in any mode or form which results in a disposition or transfer by the Developer of any interest in the Site, except that Changes in Control of the Developer shall not be deemed a disposition or transfer of the Site for these purposes; or (6) The leasing, licensing or grant of any concession of or relating to part or all of the Project or any part thereof or any interest therein, except for Project purposes of this Agreement. (b) For the purposes of this Section 1.6, the following Transfers shall not be deemed to result in a Change of Control: (I) Any Transfer of any interest in the Developer resulting from the execution of the Tax Credit Limited Partnership Agreement in the form as approved by the Agency prior to the Close ofthe Site Transfer Escrow, provided, however that such transfer is not a default under any permitted Security Financing Interest or other covenant of the Developer in favor of State TCAC; 11 P.\AopnA..\A~.n~. ....t.~hmpn"\Aa~nrlR Att"~hm~nt<\Aa~nd. Allachrn.m,\A~rmts-Am.nd 2009\08-03-09 Meta Hou5in~ - Final DDA.doc CDC/2009-39 (2) Any Transfer of any interest in the Developer, voluntarily or involuntarily or otherwise provided such a Transfer is not a default under any pennitted Security Financing Interest or other covenant of the Developer in favor of State TCAC; (3) An amendment to the Tax Credit Limited Partnership Agreement: (i) which does not result in a reduction of the installments of the Investor Limited Partner's capital contributions to be made during and at the time of completion ofthe Project on the date and subject to the existing tenns and conditions set forth in the Tax Credit Limited Partnership Agreement (including without limitation credit adjusttnents as provided therein) or (ii) which does not materially and adversely affect the ability of the Developer to perfonn its obligations under this Agreement, or (iii) which does not result in a default under the permitted Security Financing Interest or State TCAC covenant; (4) Notwithstanding anything to the contrary contained herein, the respective interests of the Developer's Investor Limited Partner may be transferable in accordance with the tenns of the Tax Credit Limited Partnership Agreement without the consent of the Agency, so long as the Developer is not then in default under the pennitted Security Interest or the Agency Loan Documents and upon the expiration of the tax credit compliance period, the interests of the Investor Limited Partner in the Developer may be transferred to the Developer, or its affiliate, without the consent of the Agency; (5) Notwithstanding anything to the contrary contained herein, the Developer's Investor Limited Partner shall be pennitted to remove either Magnolia Highland, LLC, a California limited liability company, or any other general partner for cause in accordance with the Tax Credit Limited Partnership Agreement without the consent ofthe Agency; provided, however, that Investor Limited Partner shall not elect and appoint a successor general partner therefore without the consent of the Agency, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, the substitute general partner shall assume all of the rights and obligations of the removed general partner hereunder; (6) Agency transfer of the interests of the Developer in this Agreement, and the Site, if then applicable, by the Agency at the request of the Developer to a limited partnership in which the Developer acts as a general partner. (c) This Agreement is entered into solely for the purpose of the redevelopment of the Project. The Developer recognizes that the qualifications and identity of Developer are of particular concern to the Agency, in view of: (I) The importance ofthe redevelopment of the Site to the general welfare ofthe community; and (2) The fact that a Transfer by the Developer of this Agreement or the Site is for all practical purposes a transfer or disposition of the responsibilities of the Developer, with respect to the Project. The Developer further recognizes and acknowledges that it is because of the qualifications and identity of the Developer, and in particular, the qualifications of John M. Huskey, President, of Meta Housing Corporation that the Agency is entering into this Agreement with the Developer, and, as a consequence, Transfers are pennitted only as provided in this Agreement. 12 n._ .~__,__, 'H_~" .___.___,"\.~"_~. """._."'.\'nQn~' 'H.~h~_"\"M~'O_"~.ftrl ?I\M\I\'_""U"O"".... Hnm;nn .1';"0' nnA.""" CDC/2009-39 (d) The limitations on a Transfer as set forth in this Section 1.6 by the Developer shall apply until the first anniversary following the end of the tax credit regulatory compliance period for the Project. Except as expressly permitted in this Agreement in the case of permitted Transfers, the Developer represents and agrees that it has not made nor will it create or suffer to be made or created, any Transfer, either voluntarily or by operation of law without the prior written approval of the Agency until such time as a Certificate of Completion has been approved for the Project by the Agency. Any Transfer made in contravention of this Section 1.6 shall be deemed to be a default under this Agreement whether or not the Developer knew of or participated in such Transfer, and shall be voidable at the election of the Agency. (e) The following types of a Transfer shall be permitted and approved by the Agency and are referred to herein as a "Permitted Transfer"; (I) Any Transfer by the Developer following a Site Transfer Escrow Closing creating a permitted "Security Financing Interest" which conforms to the provisions of Section 3.8 and Section 3.9; (2) Any Transfer directly resulting from the foreclosure of a Security Financing Interest created by the Developer in the Project; or the granting of a deed in lieu of foreclosure of a Security Financing Interest in the Project; (3) A Transfer under (I) or (2) above, which includes a collateral assignment to the beneficiary of the Security Financing of the Developer's beneficial interest in the Project; (4) Any Transfer of any interest in Developer to any affiliate of or other entity related to the Developer which does not result in a Change of Control under Section 1.6(a); (5) Any Transfer of any interest the Developer which does not result in a change of Control in the Developer under Section 1.6(a); (6) Any Transfer which is a lease of either an Affordable Rental Unit (dwelling) which is consistent with the applicable Affordable Rental Housing Regulatory Agreement; (7) Any Transfer which is a sale, lease, exchange, or other conveyance of the Site, or any portion thereof, by the Developer to the City or the Agency or to an entity which is controlled by the City and/or the Agency, including a joint powers authority or a non-profit corporation in which a majority of the directors are appointed by the City and/or the Agency; (8) Any Transfer which grants a construction-related or public utility easement on the Site or which establishes a reciprocal easement for ingress, egress and maintenance affecting lands adjacent to the Site. (I) No Permitted Transfer of this Agreement, the Project or the Site by the Developer (other than a Permitted Transfer created pursuant to a Security Financing Interest under Section 3.9 and Section 1.6(e)(6) and (8)) shall be effective unless, at the time of the Permitted Transfer, the person or entity to which such Transfer is made, shall expressly assume the obligations of Developer under this Agreement (or to the extent that the Permitted Transfer arises under Section 1.6( e)( 4) or (5), such person shall assume the obligations of the Developer with respect to the Project) and such person or entity also agrees to be subject to the conditions and restrictions to which Developer is subject under this Agreement. Such an 13 D.' ,___~__, .___~^ '~__~_A~'"\'_.MA" Ao"_~_~n'o\'nAn~. ...._~_.~..\.~~h ._.~A '''M\M_M_MH...o U~".'"~ _ '''nOI "n. AM CDC/2009-39 assumption of obligation shall be evidenced by a written instrument delivered to the Agency in a recordable form which is reasonably satisfactory to the Agency not less than sixty (60) days prior to the date on which such Permitted Transfer is proposed to occur. (g) Provided the particular transaction is a Permitted Transfer, the Developer is not required to give the Agency more than sixty (60) days advance notice of such a Permitted Transfer. Concurrently with the delivery of notice of the Permitted Transfer, the Developer shall also provide the Agency with a suitably detailed written description of the proposed Permitted Transfer. If the Developer desires to effect a Transfer for which Agency prior approval is required, the Developer shall submit to the Agency as part of its request for consent from the Agency, the form of an assigmnent and assumption agreement which shall set forth the terms and conditions of the proposed Transfer and the transferee's assumption of the Developer's obligations under this Agreement which are assigned to such transferee. The Agency's approval of any Transfer requiring Agency approval shall be evidenced in writing and the Agency agrees not to unreasonably withhold delay or condition its approval of any such Transfer, provided such proposed transferee can demonstrate successful and satisfactory experience in the development ownership, operation, and management of a facility comparable in size and quality to the Project, or portion thereof, as proposed for Transfer. Any such transferee for itself and its successors and assigns, and for the benefit of the Agency shall expressly assume all of the obligations of the Developer to the Agency under this Agreement with respect to the interest to be transferred. The Agency agrees that it shall be unreasonable for the Agency to: (i) require the Developer or the proposed transferee to pay any fee or charge to the Agency in consideration for the Agency's approval of such a Transfer, except for reimbursement of reasonable Agency overhead costs, allocated on an hourly basis for Agency employees and consultants who are engaged in the documentation of such a Transfer; or (ii) require the Developer or the proposed transferee to consent to the approval of any material change requested by the Agency in any prior condition of approval affecting the Project; except as may be reasonably required in connection with the Agency's approval of such a transfer to offset a specific cost or expense of the Agency or to compensate the Agency for a material adverse financial impact upon the Agency in connection with such a Transfer. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such Transfer; and the approval or disapproval of the Agency shall be provided to the Developer in writing setting forth the grounds for the Agency's disapproval of a transfer, if applicable, within thirty (30) days of receipt by the Agency of Developer's request and the form of assigrunent and assumption agreement proposed to be used in the transaction. SECTION 1.7. Transfer Escrow. Recordation of Notice of Aereement at Time of Close of the Site Upon the Close of the Site Transfer Escrow, the parties shall jointly cause to be completed, execute and cause to be recorded the form of the Notice of Agreement (Attachment No.8) in the Office of the Recorder of San Bernardino County. The Notice of Agreement shall include a legal description of the Site. SECTION 1.8. List of Attachments to Aereement. Each of the following items or documents are hereby deemed to be approved by the parties as of the date of approval of this Agreement by the governing board of the Agency and each such item or document is incorporated into the text of this Agreement by this reference: Attachment No. lA Legal Description of the Property (From Developer Acquisition Escrow Assignment Agreement) 14 __"_ .___~~__.., .___"_ '~__~___"\'M_'. A_AR~ ~lVIm,," m MU... U^".;M_ ";~ol nnA ~~, CDC/2009-39 Attachment No. IB Copy of Tentative Parcel Map No. 19200 Attachment No.2 Scope of Development Attachment No.3 Schedule of Performance Attachment No.4 Developer Project Pro Forma Attachment No.5 Developer Acquisition Escrow Assignment Agreement Attachment No.6 Agency Grant Deed Attachment No.7 Senior Citizen Rental Housing Use Covenant Attachment No.8 Notice of Agreement Attachment No.9 Agency Regulatory Agreement Attachment No. 10 Agency Loan Note Attachment No. II Agency Loan Deed of Trust Attachment No. 12 Certificate of Completion ARTICLE II SECTION 2.1 Ae:encv Purchase oUhe Prollertv. (a) Subject to the terms and conditions of this Agreement, the Agency hereby agrees to accept an assignment from the Developer of all of the equitable right-title and interest of the Developer in the Property as arises under each of the followiug real estate purchase agreements: (i) Property located 2120 Medical Center Drive: Seller - First American Trust, John and Rodney Edmunds, The Edmunds Family Trust (Escrow number 232682-PD and Title number 6022385- 62) ; and (ii) Property located at Highland Avenue and Medical Center Drive: Seller - 11026 Long Beach, LLC, et al. (Escrow/Title number 8378221); and (iii) Property located at 2196 Medical Center Drive: Seller - Elias Chehade Antoun (Escrow/Title number 835425). (h) As of the Effective Date, the Developer covenants and warrants to the Agency that: (i) each of the real estate purchase agreements referenced in Section 2.I(a) is in full force and effect and that no default by either the buyer or the seller exists thereunder; 15 P:\A~end""\A~enda Att.chments\A~enda Allachment,\Ap~nrl" Att"~hmpn',\AQ'mt,_Am~nA 7flnO\nR_1\1_M u.... l-f~".:"~ I;:~^' "',"" "u CDC/2009-39 (ii) the Developer has the right and authority under each of the real estate purchase agreements referenced in Section 2.1 (a) to assign the rights of the buyer thereunder to the Agency; (iii) as ofthe Effective Date, the Developer has accepted the condition of each of the parcels of land as more particularly described in each of the real estate purchase agreements referenced in Section 2.l(a) as evidenced by the Developer's executed Notice of Acceptance of the Property; and (iv) no real estate broker commission or property finder's fee is or shall be payable by the Agency to any person upon the close of the Agency Acquisition Escrow. (c) Prior to the close of the Agency Acquisition Escrow, the Developer shall execute and deliver to the Agency the Notice of Acceptance of the Condition of the Property in a form reasonably acceptable to the Interim Executive Director of the Agency. (d) The Agency shall acquire the Property as set forth in the Developer Acquisition Assignment Agreement upon the close of the Agency Acquisition Escrow. The Agency shall cause its conditions to close the Agency Acquisition Escrow to be satisfied or waived as provided in the Developer Acquisition Assignment Agreement. (e) In the event that any condition of close of the Agency Acquisition Escrow is not satisfied or waived by the Agency within the time period set forth in the Developer Acquisition Assignment Agreement through no fault of the Agency, then upon ten (10) days written notice by the Agency to the Developer which references this Section 2.I(d), the Agency may terminate the Developer Acquisition Assignment Agreement and this Agreement, and thereafter, the Developer and the Agency shall be mutually released from any further liability except as arises under Section 5.9, and as may be specifically provided in the Developer Acquisition Assignment Agreement. SECTION 2.2 IReserved - No Text! SECTION 2.3. Proiect Implementation Consultations. (a) Commencing upon the Effective Date, and thereafter through the completion ofthe Project or earlier termination of this Agreement, the Developer and Agency staff shall conduct regular meetings at the Agency offices, to review the status of each of the following matters of mutual interest as applicable: (i) the Developer Investigations; (ii) the administration of the Developer Acquisition Escrow Assignment Agreement and the Agency Acquisition Escrow; (iii) the administration of the Site Transfer Escrow; (iv) review of the preparation by the Developer of applications for each of the Development Project Permits based upon the Development Project Application as previously approved by the City, including the preparation of the form of tentative Parcel Map No. 19200 for recordation by the City at the Close of the Site Transfer Escrow; 16 P.\Aopnrl..\Aopnrl. A"M~mpnt<\Aopnrl. All.rhmp",,\Aopnrl. An.cnmpnt<\Aormt<.Ampnrl ?Oo<j\n~_rn_o<j Me', H"",;na _ l';n.1 nOA rlnc CDC12009-39 (v) review of the Developer Project Pro Forma and the sources of funds available to the Developer and the Agency to pay for Project costs which are the responsibility of the applicable party to pay for; (vi) finalization of the text of the Agency Loan Documents in preparation for the Close of the Site Transfer Escrow; (vii) review of the State TCAC submissions of the Developer and the Tax Credit Limited Partnership Agreement; (viii) review of the status of Developer financing for the development of the Project including the Developer Construction Loan commitment as provided under Section 2.22 and the Construction Loan financing under Section 3.8 and Section 3.9 and the Permanent Loan financing; (ix) review of the Project Construction Budget and the Developer's preparation of construction project documentation for the Project under Section 2.19; (x) review of the implementation of the Project Job Employment Outreach Program under Section 3.3; (xi) review the Developer marketing plans for the rental housing dwelling units, and the preparation of one or more community outreach plans for the preparation of a tenant eligibility list for senior citizen households who may qualify, to initially occupy the Affordable Rental Units; (xii) review of the progress of specific items of construction and improvement by the Developer of each element of the Project; (xiii) review of applications of the Developer for disbursements of the principal balance of the Agency Loan as part of the Site Transfer Escrow Closing and thereafter until the full amount of the Agency Loan has been disbursed to the Developer; (xiv) review the status of audit and accounting of various costs incurred by the parties under this Agreement, including without limitation the audit of amounts disbursed by the Agency to the Developer under the Agency Loan; (xv) review of the CEQA documents for the Project and the Mitigation Monitoring and Reporting Plan, as appropriate, during the implementation of the Project; (xvi) review and confirmation of the dates set forth in the Schedule of Performance for the performance of the obligations of the parties and the satisfaction of various conditions precedent with respect to the redevelopment of the Project; and (xvii) review of other malters as requested in writing by either party. (b) In the event that either party delivers a notice in writing to the other party within ninety (90) days following the Effective Date that the dates of one or more milestones set forth either in this 17 P:\All:endas\All:end. Attachments\All:enda Auaohment..\Auend. Att~chm~nl<\Anrrn.._Ampnrl ?MQ\nR.nVlO U..t, Hn".;M _ J;'M' nn. ~M CDC/2009-39 Agreement or in the Schedule of Performance cannot be feasibly accomplished within the time frame set forth in the Schedule of Performance, as such date or milestone appeared in the Schedule of Performance or this Agreement on the Effective Date, the parties shall consider under the provisions of Section 2.3( c) one or more specific extensions ofthe applicable date to a new time of not more than one hundred eighty (180) days later than as originally set forth in the Schedule of Performance. (c) This Agreement and the Schedule of Performance set forth various dates and times relating to the implementation of the Project, and the accomplishment of the various tasks assigned to the responsible party including without limitation, the satisfaction of the conditions precedent for Site Transfer Escrow Closings. The parties agree and declare that time is ofthe essence in the performance of such tasks and the satisfaction of conditions precedent for the Site Parcel Escrow Closing in view of the large investment of resources which both parties recognize will be required forthe redevelopment of the Project. In the event that the date for the completion of a task or the satisfaction of a condition relating to the implementation of the Project and/or the Site Transfer Escrow Closing may not be achieved by the particular date ascribed to the task or condition as set forth either in the text of this Agreement or in the Schedule of Performance, including any extensions for delays due to force majeure if applicable, then at least thirty (30) days prior to such date the parties shall, as part of their consultations under Section 2.3(a), consider whether a modification to the Schedule of Performance may be indicated. Any decision to approve a modification or a series of such modifications to the time for performance of a task which in the aggregate does not exceed one hundred and eighty (180) days for a particular time or date as provided in either this Agreement or the Schedule of Performance, shall be subject to the mutual reasonable discretion of the Interim Executive Director ofthe Agency and the Developer and shall not be unreasonably withheld, conditioned or delayed by either party. Each such modification of a date in the Schedule of Performance shall be evidenced by a written modification of the Schedule of Performance, signed by the Interim Executive Director of the Agency and the Developer which references this Section 2.3( c). Notwithstanding the foregoing, any modification or series of modifications of a time or date for performance of a particular matter set forth in this Agreement or in the Schedule of Performance which results in a delay or extension of more than one hundred and eighty (180) days later than the time as originally provided in the Schedule of Performance on the Effective Date, shall be subject to the approval of the Developer and the governing board of the Agency in the reasonable discretion of each of them. (d) Notwithstanding any provision of Section 2.3(c) to the contrary, the date assigned in the schedule of Performance for the Agency Acquisition Escrow closing shaIl not be subject to modification or adjustment by the Interim Executive Director of the Agency of more than ninety (90) days after October I, 2009 under the provisions of Section 2.3(c). Any change to the date set for the Site Transfer Escrow Closing of more than ninety (90) days shall be subject to the prior written approval of the Developer and the governing board of the Agency in the sole and absolute discretion of each of them. (e) During the course of consultations between the Developer and the Agency as provided in this Section 2.3, the Developer shall provide the Agency with detailed evidence as the Agency may reasonably request that the Developer is making diligent and reasonable progress in securing all necessary Developer Equity in an amount sufficient to undertake the acquisition, completion and operation of this Project. The Site Transfer Escrow pursuant to Sections 2.15 and 2.16 hereof shall not close until the conditions set forth in this Section 2.3(e) have been met to the reasonable satisfaction of the Agency. Failure ofthe Developer to comply with the conditions ofthis Section 2.3 shall not cause the final date for the close of escrow to be extended nor shall such failure be deemed to be an enforced delay as provided in Section 6.6 hereof. 18 P:\A~endas\A2.nda Atlachments\A2enda Attachment.IAgend. At"chm"nt<\Ap""'I<_Am."~ 'OOQ\IlR.m.<"l<! M... I-In,,<;nn _ J;,ftO' T"lfl A ~ne CDC/2009-39 SECTION 2.4 [Reserved - No Text] SECTION 2.5. Al!reement of the Al!encv to Sen the Site to the Developer for the Improvement ofthe Proiect. Subiect to the Close of the Al!eucv Acauisition Escrow. (a) Subject to the Agency's acquisition of the Property upon the satisfaction of the conditions in favor of the Agency and the close of the Agency Acquisition Escrow as set forth in the Developer Acquisition Assignment Agreement and further subject to the terms and conditions of this Agreement, the Agency hereby agrees to sell the Site to the Developer and the Developer agrees to purchase the Site from the Agency. The Developer shall pay the Agency the Purchase Price for the Site. The Purchase Price for the Site payable by the Developer to the Agency shall be in an amount as provided in Section 2.6. (b) The applicable amount of the Purchase Price for the Site, shall be paid to the Agency in cash at the time of the Site Transfer Escrow Closing. (c) In the event that the Agency may not acquire the Property under the Developer Acquisition Escrow Assignment Agreement, through no fault of the Agency, the obligation of the Agency to sell the Site to the Developer and to provide the Developer with the proceeds ofthe Agency Loan shall terminate and be of no further force or effect and the parties shall thereupon be mutually released from any further liability under this Agreement. SECTION 2.6. Purchase Price for the Site. (a) As of the Effective Date, the Purchase Price for the Site is Two Million Four Hundred Seventy-Seven Thousand Six Hundred and Five Dollars ($2,477,605) in United States currency. (b) The Purchase Price for the Site has been established by the parties based upon the configuration of the Site as Parcel I of tentative Parcel Map No. 19200 as a legal parcel ofland upon the recordation of the final form of Parcel Map No. 19200. In the event that the final configuration of Parcel I of Parcel Map No. 19200 may be materially different than as shown on tentative Parcel Map No. 19200 as of the Effective Date, each of the parties reserves the discretion to adjust the Purchase Price on a per square foot basis utilizing the dollar amount of $2,400,000 as the intended Purchase Price for the Site to be calculated on a square foot basis pursuant to that land area shown on tentative Parcel Map No. 19200 for the change in square footage whether a lesser or greater amount than shown on tentative parcel Map No. 19200 for any such material difference in land area, upon giving ten (10) days prior written notice to the other party. SECTION 2.7. [Reserved - No Text] SECTION 2.8. Al!encv Loan. (a) Subject to the terms and conditions of this Agreement, the Agency shall make a special affordable housing development loan (the "Agency Loan") to the Developer in the principal amount of Four Million Dollars ($4,000,000). The outstanding principal balance of the Agency Loan shall bear a rate of interest of three percent (3%) per annum calculated on a simple interest basis on the outstanding principal balance until all principal and accrued and unpaid interest is paid in full subject to such interest rate being adjusted to a higher or lower rate of interest per annum at the time of the closing on the Construction Loan upon the request of the Developer if required by the terms of the Tax Credit Limited Partnership Agreement, which change shall be subject to the written approval of the Agency Executive Director: 19 P:\A~endas\A~enda Attachments\Ao;end. AtlachmenlSIAl!enda Altachmem,\A~rmts.Amend 200~\08_0]-09 MM. Hn....jn~. Fin.1 nnA ~n~ CDC/2009-39 (b) The Agency Loan shall be for a term of the longer period of: (i) five (5) years from the date on which the Initial Advance of the Agency Loan has occurred Wlder Section 2.8(t); or (ii) fifty five (55) years from the date when the Site Transfer Escrow is closed and the Escrow Agent disburses the proceeds of the Construction Loan to the Developer and the Construction Loan Escrow is closed; provided, however that the Site Transfer Escrow shall have occurred by a date not later than December 31, 20 II. (c) The Agency Loan shall be evidenced by a promissory note substantially in the form as set forth in Attachment No. 10 (the "Agency Loan Note") to be executed by the Developer in favor of the Agency at the time of the close of the Agency Acquisition Escrow and shall be secured initially by Meta Housing Corporation and upon the Close ofthe Site Transfer Escrow, the Agency Loan shall be secured by a subordinate deed of trust on the Site substantially in the form as set forth in Attachment No. II (the "Agency Loan Deed of Trust") and this Agency Loan Documents. Both the Agency Loan Note and the Agency Deed of Trust shall contain the provisions relating to permitted subordinate debt in compliance with the applicable provisions ofthis Agreement. The Agency Loan Note and the Meta Housing Corporation Guaranty shall be fully executed and delivered to the Agency at the time of the close of the escrow for the Agency's acquisition of the Property as provided in the Developer Escrow Assignment Agreement. The Agency Deed of Trust and the other Agency Loan Documents shall be executed by the Developer prior to the Close of the Site Transfer Escrow. (d) The Developer shall, prior to the maturity date of the Agency Note, repay the Agency Loan plus interest in installments as set forth in the Agency Note. The installments of principal and interest are due Wlder the Agency Note shall be payable by the Developer prior to its maturity solely from the special source of funds defined in the Note as "Residual Rental Receipts of the Project". (e) The Agency Loan Note shall be initially secured by the Meta Housing Corporation Guaranty as provided in Section 2.8(t) and upon the Close ofthe Site Transfer Escrow, the Agency Loan shall be secured by the Agency Loan Deed of Trust, pursuant to which the Developer grants to the Agency a lien on the Site and the Project, subordinate to the lien created in favor of the Construction Lender (and later, the Permanent Lender) and its assigns, for the purpose of providing financing for the acquisition and rehabilitation of the Project. (t) The principal amount ofthe Agency Loan shall be disbursed to the Developer as set forth in this Section 2.8(t). (i) The term "Meta Housing Corporation Guaranty" means and refers to the payment guarantee of Meta Housing Corporation in favor of the Agency in which Meta Housing Corporation Wlconditionally guarantees to repay the Agency the full principal amount of the Initial Advance of the Agency Loan, plus interest thereon, in the event that the Developer may suffer an Event of Default to occur under this Agreement prior to the close of the Site Transfer Escrow or in the event that the Site Transfer Escrow may fail to close for any reason not attributable to the fault of the Agency on or before December 31, 2011, and the Agency elects to cause an acceleration of the Agency Loan Note. Upon the close of the Site Transfer Escrow, the Meta Housing Corporation Guaranty shall be released and discharged by the Agency, and thereafter, the Agency Loan shall not be further secured by the Meta Housing Corporation Guaranty. The 20 P:\AgendasIAgenda Attachments\Agenda Auachment,\A)l:enda Attachments\A.o:rmu-Amend 2009\OB.03_09 Meta Homino _ Fin.' nn'!',j"" CDC/2009-39 final form of the Meta Housing Corporation Guaranty shall be subject to the approval of the Interim Executive Director of the Agency in his reasonable discretion. (ii) The term "Initial Advance of the Agency Loan" means and refers to a sum not to exceed One Hundred Thousand Dollars ($100,000), which may be disbursed to the Developer to pay for pre development expenses of the Developer which have been approved by the Interim Executive Director of the Agency. (iii) The Initial Advance ofthe Agency Loan shall be disbursed to the Developer following the close of the Agency Acquisition Escrow and the satisfaction of the following conditions by the Developer: (A) the Developer has submitted a suitably detailed written listing of necessary and reasonable third party predevelopment costs for the Project as incurred by the Developer. Such a written listing of predevelopment costs shall be subject to the reasonable review and approval by the Interim Executive Director of the Agency; (B) the Developer has caused to be executed and delivered to the Agency the Meta Housing Corporation Guaranty; (C) the Developer has executed and delivered to the Agency the Agency Loan Note and the Developer Assignment of Licenses, Permits and Contracts, in final form as approved by the Interim Executive Director ofthe Agency; (D) Developer has delivered a legal opinion of its counsel in a form reasonably acceptable to the Interim Executive Director of the Agency that the Agency Loan Note and related documents executed by the Developer, has been duly executed by the Developer and is a valid, lawful and binding obligation of the Developer. (iv) the remaining balance of the Agency Loan shall be disbursed to the Developer following the Initial Advance of the Agency Loan at the time of the Site Transfer Escrow Closing as follows: (A) the Interim Executive Director of the Agency has confirmed that the conditions in favor of the Agency under Section 2.15 have been satisfied and that the Site Transfer Escrow is in a condition to close. (B) the Developer has delivered its written Notice of Acceptance of the Site to the Agency in a form reasonably acceptable to the Interim Executive Director of the Agency and the Developer has executed its acceptance of the Agency Grant Deed for the Site and the Agency Loan Deed of Trust, the Agency Regulatory Agreement and the other Agency Loan Documents and the Developer has delivered these documents to the Escrow Agent; (C) the Escrow Agent shall use and apply a portion of the Agency Loan as disbursed to the order and account of the Developer upon the close of the Site Transfer Escrow to pay the Purchase Price for the Site to the Agency; and (D) the Escrow Agent shall use and apply the remaining balance of the Agency Loan, after the Initial Advance of the Agency Loan under Section 2.8(f)(iii) and the payment of the Purchase Price, to pay for development costs of the Project as charged by the City, 21 P.\Ao~n~".\A~n~. "'''.e''~."N\An.n~. A".~h_an'o\'_."A. '~"^"_A~'"\ .__.. '___A "n~.no ^' M". .. CDC/2009-39 including without limitation, the costs of City building permits, City development permits, City sewer and water capacity and capital charges, City development impact fees and such other necessary and reasonably development costs of the Project as approved by the Interim Executive Director of the Agency. Any amount ofthe Agency Loan which is disbursed for the order and account of the Developer to pay for Project development costs other than Project development costs payable to the City, shall be delivered by the Agency to the Construction Lender for final disbursement to the Developer under the Construction Loan, subject to the building construction loan disbursement controls of the Construction Lender as set forth in Section 3.8. (E) The Interim Executive Director of the Agency shall approve the disbursement of the amount of the Agency Loan as provided in Section 2.8(f)(iv)(D) upon the submission by the Developer of a written Agency Loan draw request delivered to the Interim Executive Director of the Agency not less than fifteen (15) days prior to the scheduled date of close of the Site Transfer Escrow which sets forth the following information: (1) is signed by the Developer and is certified to the Agency to be true and correct; (2) contains a detailed written description of the Project development costs to be paid for using such proceeds of such advance of the Agency Loan. The Interim Executive Director of the Agency shall not unreasonably withhold, condition or delay approval ofthe written Agency Loan disbursement request submitted by the Developer under this Section 2.8(f)(iv)(E). (g) The Developer shall not be in default under this Agreement at the time of the close of the Site Transfer Escrow or at this time of the close of the Construction Loan Escrow. (h) The Developer shall instruct the Escrow Agent for the Construction Loan Escrow to comply with the written instructions of the Agency addressed to the Escrow Agent for the Construction Loan Escrow as relate to the disbursement by such escrow agent of the proceeds of the Agency Loan for the order and account of the Developer under Section 2.8(f)(iv)(E). (i) Notwithstanding any other provision of the Agency Loan Note to the contrary, on the "maturity date" of the Agency Loan Note the outstanding principal balance and all accrued and unpaid interest thereunder shall be due and payable. Ul The Agency hereby acknowledges that following the close ofthe Site Transfer Escrow, the Agency Loan Note is non-recourse obligation of the Developer and shall contain substantially the following text: "Except as set forth in the next sentence of this paragraph, following the date on which the Site Transfer Escrow is closed, upon the failure to pay any sum provided for in this Promissory Note when due, or a material breach of this Agreement or the Agency Loan Deed of Trust by the Borrower, no partner of the Borrower (or in the case of an assignee of the Borrower - no affiliate, member, partner, shareholder or subsidiary of such assignee) shall have personal liability for payment of the principal or interest then due under this Promissory Note. The sole recourse of the Holder to recover any sum under this Promissory Note following the date on which the Site Transfer Escrow is closed, shall be to the Property subject to the Agency Deed of Trust, except in 22 P:\Agendas\Agenda AnachmentSIA]lenda Anachments\A.o;enda Anachment,\A~rmt,.Amend 2009\OR.01_n<i M"', H",,.;",,. ";n.1 nnA ~^" CDC/2009-39 the event of: (A) fraud by the Borrower (or its assignee), (B) aoy material misrepresentation made by the Borrower to the Agency under this Agreement, (C) misappropriation by the Borrower (or its assignee) of aoy rents, security deposits, tax collection amounts, security deposits, or insuraoce or condemnation awards of the Project, (D) commission of bad faith waste by the Borrower (or its assignee) or (E) the presence of "Hazardous Substaoces" on the Site, as this term is defined in the Agency Deed of Trust." (k) Upon the close of the Site Traosfer Escrow, the Agency shall release aod caocel the Meta Housing Corporation Guaranty. SECTION 2.9. Evidence ofDeveroper Eqnity Funds Sufficient to Initiate the Proiect and to Provide Certain Developer Costs in Support of the Proiect. As of the Effective Date, the Developer has provided the Agency with a full and complete copy of the State TCAC tax credit reservation application for the Project, aod the Agency has made a preliminary determination that the Project, as proposed by the Developer, is commercially aod economically feasible aod that the Developer is reasonably likely to obtain all of the funds necessary for the Project, including amounts of Developer Equity which, when added to the Agency Loan and the Construction Loao, will be in an amount sufficient to pay for all of the costs of acquisition, construction, aod initial operation of the Project. SECTION 2.10. Site Transfer Escrow. (a) Following the Effective Date aod concurrently with the opening of the Agency Acquisition Escrow under the Developer Acquisition Escrow Assignment Agreement, the Agency aod the Developer shall jointly establish the Site Traosfer Escrow for the traosfer of the Site to the Developer. The Developer aod the Agency shall exchange the appropriate documents as relate to the transfer from the Agency to the Developer of the Site for redevelopment by the Developer through the Site Traosfer Escrow. The Developer aod the Agency shall execute such additional escrow instructions as consistent with the assembly, traosfer aod conveyance of the Site to the Developer. Upon indicating its acceptaoce in writing of its duties under this Section 2.10, the Escrow Agent is hereby empowered to carry out its function as Escrow Agent for the Site Transfer Escrow. The Agency aod Developer each agree to deliver to the Escrow Agent all documents necessary for the traosfer of the Site Parcels to the Developer, in conformity aod, within the times, as provided in this Agreement and Schedule of Performaoce. The Developer also pay the Escrow Agent: (i) all of the applicable Site Traosfer Escrow fees charged by the Escrow Agent to the parties, including the fees, costs aod expenses of the Escrow Agent, recording fees, messenger fees aod the like, promptly after the Escrow Agent has notified the Developer of the amount of such fees, charges aod costs; aod (ii) the Developer shall also pay the documentary traosfer taxes due upon the recordation of the Agency upon the Site Traosfer Escrow Closing. (b) The Escrow Agent is authorized to: (I) serve concurrently as the Escrow Agent under the Agency Acquisition Escrow, aod later under the Construction Loao Escrow; 23 P:\A~ndas\Agenda Attachments\Agenda AUachmems\Al\enda Atl.chmenl,\A~rmls_Amend 2009\08.01_09 MM. H"''';M _ Fin.1 nnA AM CDC/2009-39 (2) pay and charge the Developer for the applicable Site Transfer Escrow fees, charges and costs; (3) record the applicable instruments delivered through the Site Transfer Escrow at the instruction of the parties; and (4) otherwise comply with the supplemental written escrow instructions of the parties as addressed to the Escrow Agent. (c) The Site Transfer Escrow Closing sha11 occur when a11 of the conditions have been satisfied or waived by the applicable party; provided, however, that the Site Transfer Escrow Closing shall have occurred by a date not later than December 31,2011, unless at least sixty (60) days before such date, the parties have agreed to an extension of the date for such Site Transfer Escrow Closing as provided in Section 2.3( c), provided, however that if the Site Transfer Escrow Closing should fail to close by such date and neither party is in default, then either party may terminate this Agreement and the Developer sha11 cause the Initial Advance of the Agency Loan to be repaid in full to the Agency, whereupon, the parties shall each be released from further liability under this Agreement except as arises under Section 5.9. (d) Promptly following the opening of the Site Transfer Escrow, the Agency shall cause the Title Company to deliver to the Developer a preliminary title report and title insurance pro-forma policy for the Site for the Developer's review and approval as provided in Section 2.11. (e) The Site Transfer Escrow Closing sha11 be subject to the satisfaction of the conditions of the parties under Section 2.15, in the case of the Agency, and Section 2.16, in the case of the Developer. (I) Notwithstanding any other provision ofthis Agreement to the contrary, the Agency shall have no duty or obligation to cause the Site Transfer Escrow Closing to occur until such time as the Agency has confirmed that the Agency Acquisition Escrow is in a condition to close concurrently with the Site Transfer Escrow and the City has either (i) caused the final form of Parcel Map No. 19200 to be recorded or (ii) the City has authorized the Escrow Agent to record the final form of such parcel map as part of the Site Transfer Escrow Closing. (g) The Escrow Agent shall comply with the written escrow closing instructions of the Agency which references this Section 2.1 O(g) at the time when the Site Transfer Escrow Closing occurs. The Escrow Agent sha11 record the following instruments in the recording order indicated below, with the office of the Recorder of San Bernardino County upon the Close of the Site Transfer Escrow: (i) the Senior Citizen Rental Housing Use Covenant by and among the City, the Developer and the Agency; (ii) the Agency Grant Deed; (iii) Agency Affordable Senior Citizen Rental Housing Regulatory Agreement; (iv) the Agency Loan Deed of Trust; (v) other Agency Loan Documents as instructed by the Agency; P:\AgendasIAgenda Attathments\Agenda Atlachmenls\Agenda Anachments\A.o.rmls_Amend 2009\08_01_09 M.... Hn"';n~ _ ",nol nnA ~~" 24 CDC/2009-39 (vi) the Notice of Agreement; and (vii) other instruments as directed by the mutual written instructions of the Developer and the Agency. (h) Promptly upon the Close of the Site Transfer Escrow the Escrow Agent shall deliver to the parties the final form of the Escrow Agreements escrow closing statement of costs and fund balances and the Escrow Agent shall deliver to the Agency the executed original copy of the Agency Loan Notice and such other fully executed original copies of Agency Loan Documents and other documents deposited into escrow the parties as may be described in the Agency's final written escrow closing instructions addressed to the Escrow Agent. SECTION 2.11. Obli!!ation ofthe A!!encv to Provide Title Insurance at Time ofthe Site Transfer Escrow Closin!!. (a) Subject to the completion ofthe recordation ofthe final form of Parcel Map No. 19200 as approved by the City as part of the Development Project Application, the Agency shall exercise its best effort to cause the condition of title to the Site, to be transferred to the Developer upon the Site Transfer Escrow Closing which shall be in a marketable condition for the purposes of the redevelopment of the Project, subject to the terms and conditions of this Agreement. (b) Within thirty (30) days following the date when the Escrow Agent has accepted its duties under the Site Transfer Escrow, the Agency shall cause the Title Company to deliver to the Developer a preliminary title report for all of the lands included in the Site subject to the cooperation of the Developer in verifYing the field results of any survey as may then be required for the recordation of the Parcel Map, in a form tentatively acceptable to the Title Company for purposes of this Section 2. I I and thereafter, the Agency shall cause also to be delivered to the Developer legible copies of all instruments referred to in the preliminary title report as a title exception. Within thirty (30) days following its receipt of the preliminary title report for an Extended Coverage AL T A Developer's Policy as referenced in this Section 2. I I, the Developer shall specifically identify and give notice in writing to the Agency as part of its Developer Investigations of each exception or disapproval of any matter relating to title in the Site, which the Developer may in its reasonable discretion indicate (each referred to as a "Title Exception"). Each Title Exception shall reference the particular land parcel, to which it corresponds, and describe in suitable detail the action which the Developer believes is indicated to cure or correct such Title Exception. If the Developer fails to disapprove a title matter in writing delivered to the Agency as a Title Exception within thirty (30) days following receipt, then each Title Exception shall remain and be deemed a Title Exception. The Agency shall have no obligation to cure any Title Exception, other than obtaining the release of any monetary liens upon the Site subject to the close of the Agency Acquisition Escrow, nor shall the Agency be considered in default for failure to cure any title defect or Title Exception for any portion of the Site. The sole remedy of the Developer with respect to a Title Exception shall be to either accept such defect, cure such defect or to cancel the Site Transfer Escrow and terminate this Agreement as provided in this Section 2. I 1. (c) Within thirty (30) days following its receipt of notice of a Title Exception from the Developer under this Section 2.1 I, the Agency may, but is under no obligation to do so, confirm in writing to the Developer whether each such Title Exception shall be cured, at the time of the Site Transfer Escrow Closing. If the event the Agency fails to confirm within such thirty (30) day period whether one or more of such Title Exceptions shall be cured by the Agency at or prior to the Site transfer Escrow Closing, then the 25 P'\A~a"~..\A~AnA. '~,^~_4A"\'".RA. .,,^^~___'"\ ,___~_ .,,__~___.., '___0. .___" "^M'M M ~n... .. CDC/2009-39 Title Exception shall remain, and the Agency shall have no further duty to cure such Title Exception, and the Developer may, within five (5) days thereafter in writing addressed to the Agency and the Escrow Agent, elect to waive its objection to such Title Exception. (d) If by the date set forth in the Schedule of Performance, any Title Exception remains that was caused by the actions or inactions of the Agency during the period of time that the Site was owned in fee by the Agency which has not been cured by the Agency under this Section 2.11, or which has not been expressly waived in writing by the Developer, or otherwise not resolved to the mutual satisfaction of the parties, then the Developer may upon thirty (30) days' written notice to the Agency which references this Section 2.II(d), cancel the Site Transfer Escrow and terminate this Agreement. In the event of a termination ofthis Agreement on the grounds set forth in this Section 2.11 (c) above, and the Agency is not then in default as provided in Article V hereof, the Developer shall be responsible for paying for all of the reasonable and customary escrow cancellation and preliminary title report costs of the Title Company, if any, and the parties shall each be released from any further responsibility or liability hereunder, except as may arise under Section 5.9. (e) As part of its Developer Investigations of the Site the Developer shall prepare and complete a survey of the lands included in the Site by a civil engineer selected by the Developer to enable the Title Company to issue at the time of the Site Transfer Escrow Closing, such additional items of survey title insurance coverage or title insurance survey endorsements as the Developer may require; provided, however that no exception to title as may be indicated by such survey shall be deemed to be a Title Exception for the purposes of Section 2.11 unless the Developer delivers written notice of such title survey exception to the Agency by no later than ninety (90) days following the date on which the preliminary title report is delivered to the Developer under Section 2.11. (f) For the purpose ofthis Section 2.11, matters affecting the condition of title of the Site which may be imposed by the City prior to the recordation of the final Parcel Map No. 19200 creating the legal parcel of land which comprises the Site, shall not be deemed to "Title Exceptions". The effect of a Development Project Permit, or other title matter imposed by the City on the Site as part of the City's review and approval of a Development Project Application or a Default Project Permit, shall be subject to the provisions of Section 4.5(b). (g) The Developer shall pay the cost of the premium of title insurance in favor of the Developer for the Site upon Site Transfer Escrow Closing. SECTION 2.12. Due Dilil!ence Period and Develoner lnvestil!ations of the Site. (a) The Due Diligence Period is the time when the Developer shall undertake certain investigations of the Site, in order to ensure that the acquisition and redevelopment of the Site and the Project by the Developer is feasible, and may be undertaken by the Developer subject to the terms and conditions of this Agreement. (b) The Developer is solely responsible for undertaking all Developer Investigations of the Site and for each Phase of the Project as the Developer may believe to be indicated. The Agency shall reasonably cooperate with the Developer in the Developer's performance of any such Developer Investigations, including the performance of conduct of such Developer Investigations as relate to potential Title Exceptions and subsurface soil investigations relating to geotechnical and soil engineering study and the potential presence of Hazardous Substances, provided, however, such cooperation by the Agency with 26 P:\Agendas\A.o;enda Anachmenh\Al'Ienda Attachment.IA2enda Altachmen,,\Aermt<.Am.n~ ?MQlna.m.no "'~,. un...,.... !t;M' "". Au CDC/2009-39 the Developer for the conduct of the Developer Investigations during the Due Diligence Period shall not require the Agency to incur any cost or expense payable by the Agency to a third party, except as may be expressly provided in this Agreement. (c) The Agency makes no representation or warranty to the Developer relating to the suitability of the Site, for use by the Developer. The Developer shall rely solely and exclusively upon the results of its Developer Investigations ofthe Site, for the purpose of the Developer's: (i) acceptance of the condition of the Site as may hereafter be transferred by the Agency to the Developer, and (ii) the Developer's approval or confirmation of the feasibility of the redevelopment of the Project as set forth in this Agreement. In addition to the consideration of the potential effect on the Project of one or more Title Exceptions and the economic feasibility of redevelopment of the Project, the scope of the Developer Investigations shall also include without limitation the Developer's consideration of the results of the geotechnical soil investigations and conditions and compliance of the design and improvement of the Project and each element thereof with applicable laws pertaining to the remediation of any Hazardous Substances which may be present on any portion of the Site, and any other matters relevant to or arising from the suitability of the Site and each portion thereof for the Project as the Developer may deem necessary and proper. (d) The Developer shall give the Agency and the Escrow Agent written notice ofits completion of its Developer Investigations and the Developer's satisfaction with the condition of each Site Parcel which references this Section 2.12, (each a "Notice of Acceptance") not later than thirty (30) days prior to the Site Transfer Escrow Closing. In the event that the Developer, in its sole and absolute discretion, is not satisfied with any aspect of the condition of the Site, then the Developer shall deliver to the Agency and the Escrow Agent a written rejection statement for the Site Parcel which references this Section 2.12( d). The Developer's rejection statement shall include a description of the particular matter which the Developer rejects. If such a statement of rejection is delivered, then the parties shall confer about the means by which such rejection may be withdrawn by the Developer. Until such time as the rejection may be withdrawn by the Developer at its option, or if this Agreement is terminated by the parties as set forth in the next sentence, the Agency shall have no further obligation to proceed in preparation for the Site Transfer Escrow Closing. If the Developer does not accept the condition of the Site as evidenced by the timely submittal by the Developer of the appropriate Notice of Acceptance, the Developer shall be deemed to have rejected the condition of the Site and neither party shall be deemed to be in default, and thereafter, this Agreement may be terminated by either party upon thirty (30) days written notice and the parties shall each be released from any further responsibility or liability except, as provided in Section 5.9. (e) The Developer acknowledges that there is a significant probability that there exists many unknown physical conditions, including, but not limited to, below ground structures, debris, non-native soils, unconsolidated or non-compatible soils within the Site that will an adverse impact upon the feasibility and the costs of the Project. The Developer acknowledges and agrees that the location ofthese physical conditions cannot be determined or inferred by review of any drawing, record or study as of the Effective Date for which the Agency has notice of such physical conditions. The location of physical conditions cannot be determined or inferred by review of any drawing, record or study as of the Effective Date for which the Agency has notice of such physical conditions. There is a probability that unknown physical conditions will be discovered as of and during the time of the preparation, demolition, grading and improvement by the Developer of the Project for which the Developer undertakes the covenants and agreements as set forth in subsection (I), (g) and (h) below. 27 P:\Agendas\Agenda Altachmenls\Agenda Allachments\A.o;enda Alt.chment.\Aarmt<_Amp,,~ ,I\t1Q\~~_~l-"Q u... l-l~"':M ,,,__, n",. .u CDC/2009-39 (f) At its option and in the exercise of its sole discretion, the Developer shall accept the transfer from the Agency of the Site at the time of the Site Transfer Escrow Closing, in its "AS IS", "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. (g) THE DEVELOPER HEREBY SPECIFICALLY ACKNOWLEDGES AND AGREES THAT THE AGENCY SHALL TRANSFER AND THE DEVELOPER SHALL ACQUIRE THE SITE FROM THE AGENCY IN ITS "AS IS", "WHERE IS" AND "SUBJECT TO ALL FAULTS" CONDITION AND THAT THE DEVELOPER IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, MADE BY THE AGENCY OR THE AGENTS OF THE AGENCY AS TO ANY MATTER CONCERNING THE SITE OR OF THE PROPERTY OR OF ANY OF THE DEVELOPER INVESTIGATIONS OR OTHER DEVELOPER DUE DILIGENCE OR INFORMATION OR MATERIALS INCLUDING, WITHOUT LIMITATION: (i) THE QUALITY, NATURE AND ADEQUACY OF THE PHYSICAL CONDITION OF THE SITE, (ii) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF THE SOILS, GEOLOGY AND/OR ANY GROUNDWATER UNDER OR IN THE VICINITY OF THE SITE, (iii) THE EXISTENCE, QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF UTILITIES SERVING THE SITE, (iv) THE DEVELOPMENT POTENTIAL OF THE SITE, AND THE USE, HABITABILITY, MERCHANTABILITY, OR THE FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE SITE FOR ANY PARTICULAR PURPOSE, (v) THE ZONING OR OTHER LEGAL STATUS OF THE SITE, OR ANY OTHER PUBLIC USE DEDICATION OR PRIVATE RESTRICTION AFFECTING THE SITE, (vi) COMPLIANCE OF THE SITE, EITHER BEFORE OR AFTER A SITE TRANSFER ESCROW CLOSING, REGARDING ANY USE OR OCCUPANCY WITH ANY APPLICABLE CODE, LAW, INCLUDING ENVIRONMENTAL LAWS, REGULATION, STATUTE, ORDINANCE, COVENANT, CONDITION AND/OR RESTRICTION OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY, (vii) THE PRESENCE OF HAZARDOUS SUBSTANCES IN, ON, UNDER OR ABOUT THE SITE, EITHER BEFORE OR AFTER THE SITE TRANSFER ESCROW CLOSING, OR IN OR UPON ANY OTHER PARCEL OR LAND ADJOINING OR NEIGHBORING OR OTHERWISE AFFECTING SUCH SITE PARCEL (viii) THE QUALITY OF ANY LABOR AND MATERIALS USED TO CONSTRUCT ANY IMPROVEMENT ON THE SITE, (ix) THE CONDITION OF TITLE TO THE SITE, EITHER BEFORE OR AFTER THE SITE TRANSFER ESCROW CLOSING, AND (x) THE PROBABILITY OF SUCCESS EITHER FINANCIAL OR OTHERWISE OF THE ACQUISITION, IMPROVEMENT OR OPERATION OF THE SITE FOR THE PROJECT. BY ITS ACCEPTANCE OF THE DELIVERY OF THE AGENCY GRANT DEED, THE DEVELOPER AGREES THAT IT IS ASSUMING FOR THE BENEFIT OF THE AGENCY ALL OF THE OBLIGATIONS OF THE AGENCY WITH RESPECT TO THE MANAGEMENT OR ABATEMENT OF ANY HAZARDOUS SUBSTANCE INCLUDING WITHOUT LIMITATION, ASBESTOS CONTAINING MATERIALS AND LEAD-BASED PAINT, AND COMPLIANCE WITH ENVIRONMENTAL LAWS AND THE TITLE MATTERS FROM AND AFTER THE RECORDATION OF SUCH AGENCY GRANT DEED. Developer's Initials 28 CDC/2009-39 (h) Without limiting the provisions of this Section 2.12, the Developer, on behalf of itself and its successors and assigns, waives its right to recover from, and forever releases and discharges the Agency and the officers, employees, attorneys, agents of the Agency, from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever, including, without limitation, attorneys' fees and costs, whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with (i) the Site including, without limitation, declarations, restrictions, grants of easements, parking agreements andlor maintenance agreements, (ii) the physical condition ofthe Site including, without limitation, all structural and seismic elements, the enviromnental condition of the Site, any Hazardous Substances in, on, under or about each and every Site Parcel, or (iii) any law or regulation applicable to the Site including, without limitation, any Enviromnental Law andlor any other federal, state or local law (collectively, the "Released Claims"). The Developer represents, warrants and agrees that: (i) it understands that it is releasing potentially unknown claims; (ii) such releases are fairly and knowingly made; (iii) it is aware that it has limited knowledge with respect to certain of the Released Claims, and (iv) it specifically allocates the risk of any mistake by any party in entering into this Agreement to the party or parties who later claims it was mistaken. The Developer hereby waives any and all rights which it may have under or pursuant to the provisions of Section 1542 of the Civil Code of the State of California, and any rights it may have under any other similar statute, regulation or common law of any state or of the United States. Section 1542 of the Civil Code of the State of California provides: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FA VOR AT THE TIME OF EXECUTING THE RELEASES, WHICH IF KNOWN BY HIM OR HER MUST HAVE MA TERIALL Y AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." The Developer understands fully the statutory language of Section 1542 of the Civil Code ofthe State of California and, having been so apprised, by placing initials of officers in the space provided below, the Developer nevertheless releases Agency from all known or unknown Released Claims, as provided above. Developer's Initials (i) In addition to the matters relating to potential Title Exceptions with respect to the Site, promptly following the Effective Date, the Agency shall make available for inspection and copying by the Developer all of the public record documents requested by the Developer pertaining to the redevelopment of the Site then in possession of the Agency. 0) Prior to the Effective Date, the Developer initiated certain subsurface soil enviromnental investigations of the Site and the Property in order to conduct a more focused inquiry of certain environmental matters relating to the potential presence of Hazardous Substances within the soils of a portion of the Property which includes the Site. The Developer acknowledges and agrees that it shall proceed with the purchase of the Property and the Close of Site Transfer Escrow solely upon information obtained by Developer at its sole discretion without reliance upon any information or other facts or documents obtained from the Agency. 29 P\A~endas\~enda AttachmentslAl!enda Attacbments\N!enda AllachmenlslAgrmls-Amend 2009\08-03-09 Meta Housilljl;. Final DDAdoc CDC/2009-39 SECTION 2.13. Access to the Site for Developer Investie:ation. During the Due Diligence Period, the Developer and the Developer's agents shall have access to the Site and the Property as set forth in the Developer Acquisition Escrow Assignment Agreement, during normal business hours in order for the Developer to conduct its Developer Investigations thereon as may be requested by the Developer. The performance of any work of the Developer Investigations on the Site shall not unreasonably disrupt the use or occupancy of the Site by the occupant thereof. The Developer shall be liable for any damage to property or injury to any person occasioned by the acts of the Developer, its employees, agents or representatives during the course of performance of any Developer Investigation on the Site and the Property and the Developer shall indemnify, defend and hold harmless Agency, and the officers, attorneys and agents ofthe Agency from any and all liens, claims, demands or liability resulting from such access by the Developer to the Property and any portion thereof. SECTION 2.14 SECTION 2.15. [Reserved - No Text] Ae:encv Conditions for Site Transfer Escrow Closine:s. (a) The Agency shall not be required to transfer the Site to the Developer or to cause the Site Transfer Escrow Closings to occur until the following conditions have been satisfied: (i) the Developer is not in default under this Agreement; (ii) the Escrow Agent has confirmed its acceptance to the Agency of its duties under the Site Transfer Escrow and has issued its preliminary escrow closing statement to the Developer and the Agency; (iii) the Title Company has confirmed to the Agency that it is prepared to issue its ALTA - lender's policy of title insurance in favor of the Agency in form and substance reasonably acceptable to the Agency, upon the close ofthe Site Transfer Escrow; (iv) the Agency has approve the update ofthe Project Construction Budget as provided in Section 2.19 and the update of the Developer Project Pro Forma as provided in Section 2.24 and the Developer has demonstrated to the reasonable satisfaction of the Agency that the Developer has the equity funds necessary to support the Project as provided in Section 2.9; (v) State TCAC has issued its reservation of affordable rental housing tax credits to the Developer and the Project in an amount sufficient, when added to other Developer Equity and financing for the Project, is deemed by the Agency to be sufficient for the Developer to undertake the Project, and such reservation of tax credits has been accepted in writing by the Developer and is in full force and effect atthe time of the Site Transfer Escrow Closing; (vi) the City has authorized the recordation ofthe final form of Parcel Map No. 19200 and such parcel map is in a condition to be recorded concurrently with the Close of the Site Transfer Escrow and the Developer has made arrangements acceptable to the Agency to pay for all of the costs and expenses of the Agency associated with the preparation and recordation of Parcel Map No. 19200; 30 P:\A"enda.\A"enda Attachment.\A"enda Artachmenn\A".nda AnachmennlA"tmt!l-Amend ?()[)Q\o~.m_()q M.." 1-ln,,,ino. r;n,1 nnA rlnc CDC/2009-39 (vii) the Developer has accepted the condition of the Site as set forth under Section 2.12; (viii) the Agency has approved the final text ofthe definitions of such words and phrases as "Operating Expenses", "Operating Reserve Fund", "Replacement Reserve Fund", "cash payments of deferred Borrower fees" and the like, as used in the definition of the term "Residual Rental Receipts of the Project", as set forth in Section 1.4; (ix) the Agency has approved the final form of the Tax Credit Limited Partnership Agreement and such agreement has been fully executed by the Developer and its limited partner(s); and (x) the Developer has complied with the conditions set forth in Section 2.3(e) all to the reasonable satisfaction of the Agency. (b) In the event that the foregoing conditions may have failed to occur for the Site Transfer Escrow Closing by December 31, 2011, without the fault of the Agency, the Agency may terminate this Agreement accelerate the repayment of the outstanding principal balance of the Agency Note plus interest thereon, (e.g., the Initial Advance of the Agency Loan) to the date of such termination and upon the collection of such payment by the Agency the parties shall each be released from any further responsibility or liability except as provided in Section 5.9. SECTION 2.16. Developer Conditions for Site Transfer Escrow Closin!!. (a) The Developer shall not be required to accept the transfer ofthe Site Parcel arto cause the Site Transfer Escrow Closing to occur until all ofthe following conditions precedent have been satisfied: (i) the Agency is not in default under this Agreement; (ii) the Escrow Agent has confirmed its acceptance to the Developer of its duties under the Site Transfer Escrow and has issued its preliminary escrow closing statement to the Agency and the Developer; (iii) the Title Company has confirmed to the Developer that it is prepared to issue its ALTA - Owner's policy oftitle insurance in favor ofthe Developer in a form and substance reasonably acceptable to the Developer upon the close of the Site Transfer Escrow; (iv) State TCAC has issued its reservation of affordable rental housing tax credit to the Developer and the Project in an amount when added to other Developer Equity and financing for the Project is deemed by the Developer to be sufficient to undertake the Project; and such reservation of tax credits is in full force and effect at the time of the Close of the Site Transfer Escrow; (v) the final form of the Tax Credit Limited Partnership Agreement has been fully executed by the limited partners of the Developer; 31 P:\A""nrl~_,\A~'nd. Att.chrnenl.,\A~enda AU.."nment.\AQend. Att.ohm.nt,\A2rml.,_Am~nd 1000\OR.m.M MM. 1-1...".;<10. Fin.1 nn/>.,;"" CDC/2009-39 (vi) the Developer has accepted the terms and conditions of the Construction Loan and Construction Loan Escrow is in a condition to close concurrently with the Site Transfer Escrow; (vii) the Agency has executed all of the documents required by the Agency for the close ofthe Site Transfer Escrow and that all such documents are in the possession of the Escrow Agreement; (viii) the Agency has confirmed to the Developer that its conditions for the close of the Site Transfer Escrow have been satisfied. (b) In the event that the foregoing conditions may have failed to occur for the Site Transfer Escrow Closing by December 31,201 I, without the fault of the Developer, the Developer shall repay the outstanding principal balance ofthe Agency Note, plus interest, then due and payable to and including the date of such termination and terminate this Agreement and thereupon, the parties shall each be released from any further responsibility or liability except as provided in Section 5.9. SECTION 2.17. Construction Loan Escrow. (a) The final delivery and exchange of the documentation and instruments evidencing the Construction Loan and the initial disbursement of funds by the Construction Lender to the Developer for the construction and development of the Project shall be accomplished upon the close ofthe Construction Loan Escrow. The Agency shall not be a party to the Construction Loan Escrow; provided, however, that the inclusion in the Construction Loan Escrow as set forth in this Section 2.17 are part of the consideration for the Agency entering into this Agreement. (b) The Developer and the Construction Lender shall mutually establish the Construction Loan Escrow and the Developer and the Construction Lender shall each instruct the Escrow Agent, as designated by the Construction Lender and the Developer, to comply with the written Construction Loan Escrow instructions of the Agency addressed to such Escrow Agent for the Construction Loan Escrow which are consistent with the Construction Loan Documents and/or this Agreement. (c) The Developer shall cause the Escrow Agent for the Construction Loan Escrow to deliver to the Agency, the final form of all documents and instruments as delivered to the Escrow Agent by either the Construction Lender or the Developer. The Escrow Agent for the Construction Loan Escrow shall deliver to the Agency the final escrow closing statement of the Escrow Agent addressed to the Developer, as the borrower under the Construction Loan Documents. (d) The Agency may obtain an appropriate lender's title insurance endorsement ofits Agency Deed of Trust from the Title Company at the time of the close of the Construction Loan Escrow at the cost and expense of the Developer, which the Developer hereby agrees to pay. (e) Provided the Developer is not then in default under this Agreement, or any of the Agency Loan Documents, the Agency shall remit the remaining principal balance of the Agency Loan in accordance with Section 2.8, to the Escrow Agent for the Construction Loan Escrow for disbursement to the Developer for the payment of Project costs as may be approved by the Agency and the Construction Lender, as set forth under Section 2.8(g) subject to the satisfaction of the following conditions: 32 P.\A".."~..\A,,.."~. Att.~~m..",.,\A"..nrl. A""~hm..n,,\A,,.."rl. Ar..chm.nt<\A",m',,-Ampnrl ?or)Q\nH_f\l_nQM..,.I-f~"';M. l';Ml nnA rlM CDC/2009-39 (i) the Agency has approved an update of the Project Construction Budget as provided in Section 2.19; (ii) the Agency has approved the update of the Developer Project Pro Forma as provided in Section 2.24; (iii) the State TCAC has issued its reservation of affordable rental housing tax credits to the Developer and the Project in an amount acceptable to the Agency Executive Director that will generate net funds available for the Project and such reservation of State TCAC has been accepted by the Developer and is in full force and effect at the time of the close of the Construction Loan Escrow; (iv) the Agency has approved the final form of the Tax Credit Limited Partnership Agreement and the Developer has confirmed to the Agency that upon the close of the Construction Loan Escrow, the Agency shall receive a written opinion of a nationally recognized firm of lawyers that such Tax Credit Limited Partnership Agreement is a valid lawful binding obligation of the Developer and is in full force and effect; (v) the Agency has approved the form of the Project construction documentation as set forth in Section 3.6; (vi) the Agency has approved the form of the Construction Loan Documents as set forth in Section 3.6; (vii) the Construction Lender has confirmed its approval of the Agency Subordination Agreement for Project Financing, in a form as acceptable to the Agency under Section 3.9; and (viii) the Developer has provided the Agency with written evidence reasonably acceptable to the Agency that the Developer Equity is available to fund the cost of the construction ofthe Project. SECTION 2.18. [Reserved - No Text] SECTION 2.19. Project Construction Budeet. (a) As of the Effective Date, the Developer has included a preliminary Project Construction Budget as part of the Developer Project Pro Forma. The preliminary Project Construction Budget has been prepared by the Developer based upon the Development Project Application as approved by the City and the Developer represents and warrants to the Agency that as of the Effective Date, the preliminary Project Construction Budget contains an accurate estimate of the actual and reasonable costs necessary to design, construct, improve, furnish and finance the Project, based upon development assumptions which the Developer believes to be reasonable. (b) The State TCAC application materials for the Project as prepared and submitted by the Developer to State TCAC, includes development costs assumptions and estimates for the Project which are based upon the preliminary Project Construction Budget. 33 P,\A~enda"\A2enda Atlachment,\Al1enda Atlachment.\A"en~. Art.chm~n,,\A,,'m'<-Ampn~ ?MO\.....n1_...O u.... U~".:n.. ,,:"", rl'" ~M CDC/2009-39 (c) Upon the Effective Date, the Developer hereby agrees to diligently prepare applications for issuance of Development Project Permits to the City for improvement of the Project based upon the Development Project Application as approved by the City. The plans and specifications prepared by the Developer in connection with such applications for issuance of Development Project Permits shall provide the Developer and the agency with the basis to confirm, update and further refine the preliminary Project Construction Budget for purposes of obtaining the Construction Loan from the Construction Lender. (d) Concurrently with the Developer's submission of the Construction Loan Documents to the Agency for its review and approval under Section 3.8, the Agency shall confirm that the final form of the Project Construction Budget as accepted and approved by the Construction Lender is reasonably consistent with the preliminary Project Construction Budget and the Development Project Application for the Project as approved by the City. SECTION 2.20. the Proiect. State TCAC Aoolication for Affordable Rental Tax Credit Allocation to (a) Prior to the Effective Date of this Agreement the Developer has caused to be submitted to State TCAC an application for affordable rental tax credit allocation for the Project. (b) The Developer hereby agrees to exercise its best effort to cause State TCAC to consider and approve the application for a reservation of affordable rental tax credits for the Project in accordance with the application as previously submitted by the Developer for the Project. The Developer hereby agrees to provide the Agency with copies of all correspondence and written communications by and between State TCAC staff and the Developer with respect to the processing, review and approval by State TCAC of the affordable rental tax credit reservation for the Project. SECTION 2.21. Review of Proiect ODeratinl! Cost Budl!et. (a) As part of the ongoing consultations between the Developer and the Agency as provided in Section 2.3 of this Agreement, the Developer hereby agrees to provide the Agency with all relevant information with respect to the finalization of the terms on which the Tax Credit Limited Partnership Agreement shall be executed by the Investor Limited Partners and the finalization of such terms as the following for purposes of completing the final form of the Agency Loan Note: (I) "Operating Expenses" of the Project; (2) actual debt service schedules as projected for all of the "Senior Debt" as may be secured under the "Senior Lender Documents"; (3) the starting balance of the "Operating Reserve Fund" and the estimated amounts to be deposited each year to the Operating Reserve Fund by the Project; (4) the starting balance ofthe "Replacement Reserve" and the estimated amounts to be deposited each year for the Replacement Reserve Fund by the Project; (5) the estimated amount of the general partner loans, if any, to the Project and the repayment schedule of such general partner loans; 34 D.\ ^~QnA".\ A~~~A. A".e~~~~h\A~.~,1. A""^~m....,,\Ao~nA. An.rhmpn..\A",m.<-Ampn..J 'm)CJ',O~.Ol_nQ M.," Hn",i.." _ Pin.1 onA AM CDC/2009.39 (6) estimated amounts of the deferred Developer fee for the Project, and the payment schedule for such deferred Developer fee; (7) other accounting items which effect the calculation of the amount of Residual Rental Receipts of the Project which may be available during the Project compliance period, each Project Accounting Year for the repayment ofthe Agency Loan. (b) Based upon the consultations between the Developer and the Agency under Section 2.21 (a), the Parties shall finalize the text of the Agency Loan Note and the related Agency Loan Documents prior to the Close of the Site Transfer Escrow. SECTION 2.22. Construction Loan Commitment. The Developer and not the Agency shall have the sole obligation to use commercially reasonable efforts to obtain a construction loan commitment from a recognized commercial lender at such time as the State TCAC has issued its reservation of low income housing tax credits and prior to the Close of Site Transfer Escrow. SECTION 2.23 [Reserved - No Text] SECTION 2.24. Developer Proiect Pro Forma. (a) As of the Effective Date, the Developer has prepared and presented the Agency with a Developer Project Pro Forma for the Project. The Developer Project Pro Forma for the Project is on file with the Agency. Upon the completion of the improvement ofthe Project, the Developer shall provide an accounting to the Agency for the actual cost incurred by the Developer in connection with the acquisition and construction of the Project as set forth in Section 2.25. (b) At all times following the Effective Date, the Developer shall keep and maintain and make available for review and inspection by the Agency and its auditors accounting books and records for Project acquisition and development costs incurred in connection with the Project in accordance with generally accepted principles of business accounting. The Agency and its accountants and auditors shall have the right upon reasonable prior notice to conduct inspections and reviews ofthe accounting books and records of the Developer relating to the Project, at the business offices ofthe Developer. The Developer shall cooperate with the Agency in the production of its accounting books and records for the Project, as reasonably required by the Agency and its auditors to conduct an audit or review of actual Project acquisition and development costs at any time during the course of improvement of the Project. (c) [RESERVED] (d) The Parties acknowledge and agree that the Agency Loan is intended to partially finance the financing "gap" of the Project (i.e., the amount needed to pay the dollar amouint of the total acquisition, development and construction costs incurred and paid by Developer during the course of construction of the Project (collectively, the "Total Project Costs") that is in excess of the financing and other funding sources available to the Developer for the acquisition, development and construction of the Project), but in no event to provide funding in excess of the Total Project Costs. [fthe Total Project Costs are less than the anticipated Project costs as set forth in the Developer Project Pro Forma as the same may be amended prior to the commencement of construction with the reasonable approval ofthe Agency Executive Director (the "Estimated Project Costs") (as used herein the dollar amount representing the difference between the 35 P \A"..n<l..\A"..,,~. A.ucnm..n,,\Aocnd. An...hm."t<IA"..nd. Att.chment<IA",mt<_Am..nd 200Q\OR.01.1lQ M.... He,",,;"<< _ F;n.l J)nA rl"" CDC/2009-39 Estimated Project Costs and the Total Project Costs shall be a "Cost Reduction"), then an amount equal to the Cost Reduction shall first be applied to pay any outstanding portion of the Developer fee, and thereafter remaining amounts shall be paid to Agency to reduce the principal amount of the Agency Loan. (e) In the event that following the Effective Date either the Developer or the Agency may propose a substantial modification to the Development Project Application for the Project as approved by the City, the parties acknowledge that the mutual approval of any such proposed modification of the Development Project Application insofar as the Project is concerned could also have a material effect on the Developer Project Pro Forma. SECTION 2.25. Proiect Audit and Accountinl!. (a) The Developer (including for purposes hereof any Developer affiliate that owns or has any interest in the Project) shall provide the Agency with annual financing statements of its operations with respect to its ownership and operation of the Project no later than one hundred twenty (120) days after the conclusion of each Project Accounting Year, beginning for calendar year 20 I 0 through the end of the regulatory period under the Agency Regulatory Agreement. Such information as shall be contained in the annual financial statements ofthe Developer for the Project shall be utilized by the Agency in determining the amounts payable by the Developer from the Project each year to the Agency pursuant to the repayment requirements as set forth in the Agency Loan. Upon reasonable notice from the Agency, Developer shall make available for inspection at the office of the Agency all updated financial information of the Developer for the confidential inspection by either a financial consultant to the Agency or a certified public accountant retained by the Agency to review such information. Such financial information shall be made available on a confidential basis. No financial information of the Developer shall be disclosed by the Agency or its consultants to third persons, other than such consultants ofthe Agency shall be permitted to comment to the Agency regarding the financial condition of the Developer as it relates to the ability of the Developer to continue with the Project consistent with this Agreement. The Agency shall use all reasonable efforts to protect the confidentially of the Developer's financial information, subject to disclosures required by applicable law. (b) The Agency shall have the right at reasonable times to conduct its independent audit of the financial statements, or any component thereof, of the Developer as to those matters set forth in Section 2.25(a) above at its sole cost and expense. Each party shall reasonably cooperate with the other party during the conduct of any such audit. Notwithstanding the foregoing, the Agency shall have any right to inspect books and/or records of the Developer as to which the Developer reasonably asserts a claim of attorney/client communications or other attorney work product under applicable law. ARTICLE III REDEVELOPMENT OF THE PROJECT, AND EACH ELEMENT THEREOF SECTION 3.0. Consequences of Exercise of Discretion bv the City. The Developer and the Agency mutually agree that one or more of the Developer's and the Agency's respective conditions precedent to the Close of the Site Transfer Escrow may fail to be met as a result of any studies, revisions or proceedings involving the exercise of discretion by the City with respect to the approval of any Development Project Application, the conditions imposed under any Development Project Permit or as a result of intervening State or federal legislation or regulation or judicial ruling. 36 P.\A~."~oo\A~~n~. A>..~h~~n..\A"~n~. A".ehm~,.\AffPn.1. A...~h~~"..\Aa,~.._A~~n" ?MO\no_~1_M~<.... Un...;"," _ ":no' nnA ~~" CDC/2009-39 Upon the occurrence of such an event, neither party shall be in default under this Agreement, and this Agreement shall be subject to termination by either party and the parties shall be released from any further responsibility or liability except as provided in Section 5.9. SECTION 3.1. Developer Demolition Activities on the Site. (a) It shall be the sole duty and responsibility of the Developer to cause all above and below ground structures situated on the Site, to be demolished and the corresponding demolition wastes to be removed from the Site at the sole cost and expense of the Developer promptly following the demolition activities of Developer. Developer shall not store such demolition waste on the Site for a period of time equal to the lesser of (i) the time prior to any scheduled demolition waste removal or (ii) ten (10) days whichever is the first to occur. (b) Pursuantto Section 2.12, the Developer has agreed to accept the transfer from the Agency of the Site at the time of Escrow Closing in an "AS IS", "WHERE IS" condition with all known faults and defects including the existence of ACMs, LBP, Hazardous Substances, and USTs and other matters, which shall be the sole obligation and responsibility, of the Developer to remove, remediate or otherwise manage in such manner as is appropriate under the applicable Development Project Permit and other applicable law. The Developer recognizes that additional costs and expenses, and time delays in the demolition of any structure on the Site or the grading of the Site may result due to the presence and abatement work associated with such ACMs, LBPs, Hazardous Substances, USTs, and the removal or correction of non- native or non-compactable soil and debris from the Site. SECTION 3.2. Development of the Proiect bv the Developer. (a) Subject to Site Transfer Escrow Closing, the Developer hereby agrees to construct and complete the improvement of the Project in a manner which is consistent with each applicable Development Project Permit. Notwithstanding the foregoing, the Developer acknowledges and agrees that no work of improvement of the Project, or any Phase thereof, other than on-site geotechnical testing and survey work, as authorized in Section 2.12 and Section 2.13, shall occur on the Site until such time as the Developer has; (i) acquired the fee interest the Site, (ii) the City has issued the applicable Development Project Permit to the Developer for the improvement of the Site and (iii) the occupants of the Site, if any have surrendered possession of the Site to the Developer or the Agency, as applicable under a notice of displacement or otherwise. (b) The Developer shall not submit a Development Project Application for the modification of tentative Parcel Map No. 19200 or City Conditional Use Permit No. 09-05 until after the Agency has first approved the Developer Project Application for such a modification of either tentative Parcel Map No. 19200 andlor City Conditional Use Permit No. 09-05. Subject to the approval and the issuance by the City of the applicable Development Project Permits for the construction of improvements on a the Site, the redevelopment of the Project by the Developer shall be accomplished in substantial accordance with the Developer Project Application as approved by the Agency, together with such changes in the Developer Improvement Plan, if any, as may be approved by the Agency either before or after the dates of submission by the Developer to the Agency or the submission by the Developer of one or more Development Project Applications to the City pursuant to this Agreement. This Agreement, including the Schedule of Performance specifies various dates for the submission by the Developer to the City and/or to the Agency, of various documents and items of information for review, including geotechnical reports, preliminary and final drawings, and structural engineering studies, building elevations, renderings, construction implementations, facility operation plan reports and Project cost audit reports and the like for the Project. 37 P:\A~endas\A~end. Att.chment.\A~end. Attachments\A~enda Anachmenls\A~rmls.Amend 2009\O~_Ol-llQ MM. Ho",ino _ Fin.1 nnA rloc CDC/2009-39 (c) No action by the Agency with reference to this Agreement or any of the related documents or the Attachments hereto shall be deemed a waiver of any City development standard which is applicable to the improvement and redevelopment of the Project, the Site or any portion thereof. (d) In the case of a Development Project Application, the word "Plans" means and refers to the preliminary and final drawings, site development plans, tentative subdivision map, building elevations, design engineer reports, landscape plans and other written materials as may then be indicated by the City staff or required under the City Municipal Code in support of the submission and completion of one or more Development Project Applications. In the case of a Development Project Permit, the word "Plans" means and refers to preliminary and final drawings, final subdivision maps, demolition plans, grading plans, architectural plans, civil engineering plans and specifications for building and structural elements, building, electrical, plumbing, mechanical and all related life safety plans, material samples and the like, as may then be indicated by the City staff or required to support the issuance of one or more Development Project Permits. The Developer shall prepare at its sole cost and expense for submission to the City all Plans necessary to accompany each Development Project Application in sufficient detail for the City to accept as complete each such Development Project Application. Following the approval or conditional approval by the City of each such Development Project Application, the Developer shall prepare at its sole cost and expense for submission to the City all Plans necessary and in sufficient detail to obtain from the City each Development Project Permit which authorizes the construction or installation of a specific item of improvement of the Project on the Site. In the event that after the Agency has approved the Developer Improvement Plan, the Developer may seek to: (i) prepare a Development Project Application or a Plan in support ofa Development Project Application; or (ii) modifY, revise or amend a Development Project Application or Plan, which in either such case of (i) or (ii) the Interim Executive Director of the Agency determines in a written notice issued to the Developer is a "material change" as this term is defined in this Section 3.2, from the Developer Improvement Plan, then before the Developer may request the City to further consider such a modification, revision or amendment of a Development Project Application or Plan, the Developer shall obtain the approval of the governing board of the Agency of the particular modification, revision or amendment to such Development Project Application, and/or Plan. The Developer may request by written notice to the Agency that the Interim Executive Director of the Agency determine whether a feature of one or more Development Project Applications or Plan as proposed for submittal to the City includes a material change from Developer Improvement Plan as previously approved by the Agency and the Interim Executive Director of the Agency shall respond to such a written request within fifteen (15) business days after receipt thereof as to whether a material change appears to exist. (e) following: The words "material change," as used in Section 3.2(d) means and refers to any of the (I) a development proposal included in either a Development Project Application or a Development Project Permit is not consistent with the previously approved Developer Improvement Plan; 38 P:\A~enrl..\A"end. Att.~hment<\A"enrl. At..chmenl<\Al1Pnd. Att'''."men,.\Ao",,''_Am~"~ 'MO\MJl1.Mu... Uno'.;M _ .;~.I nnA ,.,~_ CDC/2009-39 (2) a development proposal set forth in a Development Project Application contains more than a ten percent (10%) difference in the land area, building area, landscape area and/or common area, than as originally set forth; (3) a proposed Plan or Development Project Permit contains one or more provisions which require the modification or amendment of the Developer Improvement Plan; (4) any other physical change to the proposed scope of overall improvement for the Project occurs which the City determines is not within the scope of the completed CEQA review for the Project by the City. (1) Landscaping plans for the Project shall be prepared by a licensed landscape architect. The landscaping plans prepared by the Developer as part of the Agency concurrence of the Developer Improvement Plan includes high quality and attractive landscaping and related improvements within the proposed common areas, as applicable, as well as within the public parkways. (g) The Developer shall prepare and submit all Plans for the Project as required under the City Municipal Code. The Agency shall cooperate with and shall assist the Developer following the Effective Date in order to obtain the approval by the City of each Development Project Application submitted by the Developer to the City which is consistent with the Scope of Development and the Developer Improvement Plan, and any other Plans which have previously been approved by the City prior to the Effective Date. In the event that the City disapproves any element of a Development Project Application or any Plan related thereto, the Developer may revise and resubmit such Development Project Application or Plan to the City in accordance with the City's requirements, or the Developer may appeal the rejection by the City of a particular Development Project Application or Plan, in the manner provided by law. The Developer and the Agency staff shall hold regular progress meetings to coordinate the preparation and submission by the Developer of each Development Project Application, and each Plan and related documents to the City and the consideration by the City of the completeness of each Development Project Application, the approval by the City of each Development Project Application and thereafter, the issuance by the City of Development Project Permits for the improvement of the Project. The Agency Staff and the Developer shall communicate and consult informally as necessary to ensure that the formal submittal of the any Plans or other documents to the City or the Agency can receive prompt and speedy approval. (h) The Developer Improvement Plan, once approved by the Agency, shall not be modified by the Agency unless such modification is mutually agreed by the parties. Nothing contained herein shall preclude the City from conducting its review, modification or rejection of any Plan which accompanies a Development Project Application as required by all applicable laws and regulations. The Developer shall revise each such Plan, in a manner that addresses the basis of proposed modification or rejection by the City. The Developer shall promptly revise and resubmit to the City any Plan, which is conditionally approved or rejected by the City as part of the consideration and approval by the City of each Development Project Application and/or the issuance of one or more Development Project Permits. After the Site Transfer Escrow Closing has occurred, the Developer may request a reasonable extension ofthe period of time as set forth in the Schedule of Performance during which the preparation of revisions to Plans as required by the City in support of the issuance of one or more Development Project Permits may be necessary and such extension of time by the Agency shall not be unreasonably wit1theld, conditioned or delayed. 39 CDC/2009-39 (i) After the acceptance by the City of the Development Project Application, or later after the issuance of one or more Development Project Permits corresponding to the Development Project Application, if the Developer desires to make any material change in a final Plan which is not consistent with the Development Project Application as approved by the City (either before or after the time when the City has issued the Development Project Permit to the Developer), or if the Interim Executive Director of the Agency has determined that a material change has occurred as set forth in Section 3.2(e) then the Developer shall submit the proposed change to the Agency for its consideration and approval, together with a request for extension of the Schedule of Performance, if such extension is necessary. Such a proposed change shall be approved or rejected by the Agency in writing within thirty (30) days after submission to the Agency. Such a change shall, in any event, be deemed approved by the Agency unless rejected by either the governing board of the Agency or the Interim Executive Director ofthe Agency, in whole or in part, by written notice of the Agency to the Developer, setting forth in detail the reasons therefore. The Developer, upon receipt of a rejection by the Agency, may revise such portions as are rejected, or may appeal or dispute such rejection. Once a Development Project Permit has been issued and the work of improvement pursuant to that Development Project Permit has commenced, the Developer shall have the right during the course of construction make "minor field changes" for the work of improvement covered by such Development Project Permit without seeking the prior approval of the Agency. "Minor field changes", as this term is used in the preceding sentence, shall refer to those changes from the final construction Plans which have no material or adverse effect on the quality or appearance of the improvements and include changes made in order to expedite the work of construction in response to conditions encountered in the field during the course of construction. G) Except as expressly provided herein, all of the costs of redeveloping the Site and the Project, including the cost of preparing and submitting each Plan to the City for its review and approval, the costs and charges of any public agency with jurisdiction associated with the issuance of any Development Project Permit, the reorganization of existing or proposed utility services and the costs and charges of the construction of all improvements on the Site, and all off-site improvements associated therewith, shall be borne solely by the Developer. (k) The Developer shall begin and complete the redevelopment ofthe Project within the times specified in the Schedule of Performance or within such extensions of time as may be revised by the parties from time to time as mutually agreed upon in writing, or as required under Section 2.3( c) or Section 3.2(i). (I) The Developer for itself and its successors and assigns agrees that in the design and construction of the improvements for the Project, the Developer will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, religion, creed, national origin, or ancestry. (m) The Developer shall be responsible for carrying out its construction of the improvement of the Project, in conformity with all applicable laws, including all applicable federal and state labor standards and requirements. SECTION 3.3. City of San Bernardino Construction Job Emplovment Outreach Prol!ram ofthe Developer. (a) The Developer hereby agrees to use good faith efforts to recruit San Bernardino residents, for any new job or entry level employment positions, and to the extent of all other factors being equal and 40 CDC12009-39 consistent with other applicable law, the Developer covenants on a best efforts basis to give San Bernardino residents preference for hiring for such new entry level job or employment positions and to the maximum reasonable and feasible extent, use the services of businesses which are located in the City of San Bernardino which result from the performance of this Agreement and which are performed within the City. (b) "Good faith efforts" of the Developer for the purposes ofthis Section 3.3 include, but are not limited to, the following factors: (1) advertisement in local media concernmg employment, contracting and subcontracting opportunities; (2) providing written notice to a reasonable number of local business enterprises soliciting their interest in contracting or subcontracting in sufficient time to allow them to participate effectively; (3) establishing an applicant pool of eligible persons who have responded to such entry level employment outreach efforts of the Developer; (4) attendance at pre-solicitation or pre-bid meetings that were scheduled by the City to inform contractors or subcontractors of contracting and subcontracting opportunities for local business enterprises; (5) following up initial solicitation of interest by contacting local business enterprises by telephone to determine with certainty whether they are interested in participating; (6) selecting portions of the work to be performed by local business enterprises; (7) providing interested local business enterprises and other enterprises with adequate information about the plans, specifications and requirements of contracts and subcontracts; (8) negotiating in good faith with interested local business enterprises to perform work; and (9) making reasonable efforts to assist interested local business enterprises in obtaining necessary sources of supply, lines of credit or insurance in order to participate in such work associated with the Project. (c) If requested to do so by the Agency, the Developer shall provide the Agency with access to copies of all of its records pertaining or relating to its employment practices, except to the extent such records or portions of such records are confidential or privileged under state or federal law. (d) Nothing contained in this contract shall be construed in any manner so as to require or permit any act which is prohibited by law. SECTION 3.4. Developer Compliance with Prevailine Waee Requirements. (a) The sole source of funding for the Agency Loan to the Developer shall be derived from the 41 CDC/2009-39 available low and moderate income housing funds of the Agency under Health and Safety Code Sections 33334.2 and 33334.3, and no other source of Agency funds shall be used or shall be made available therefore. (b) The Developer hereby represents and warrants to the Agency that as of the date of this Agreement and separate from the Agency Loan and the funds received pursuant to the Tax Credit Limited Partnership Agreement, no other part of the Project is anticipated to be paid for in whole or in part from public funds or from a public funding program which would otherwise require that the provisions ofLabor Code Section 1720 shall be applicable to the construction of the Project. In the event other public funds or any public funding program are used in whole or in part to pay for any portion of the Project, the Developer shall then comply with said provisions of Labor Code Section 1720, as applicable. (c) The Agency shall not be responsible or liable for the payment of any sums under Labor Code Section 1720, et seq., or other prevailing wage requirements as the result of the activities of the Developer, or any of its affiliates or the contractors or subcontractors of any of them, in connection with the development and improvement of the Project. The Developer shall indemnify, defend and hold harmless the Agency and all officers, officials, employees, consultants and attorneys of the Agency with respect to all such prevailing wage compliance issues arising out of the activities of the Developer associated with its acquisition of the Site from the Agency and in constructing the Project. The Developer agrees to apprise in writing all third parties seeking to provide labor and construction work on the Project, as to the provisions of this Section 3.4. Any indemnification provided to the Developer from such third parties with respect to compliance of the Project with the public work requirements imposed upon the Developer and the Project by virtue ofthe provisions of Labor Code Section 1720, et seq., shall not relieve the Developer of its indemnification obligations to the Agency arising under this Section 3.4. SECTION 3.5. Maintenance ofthe Site Followinl! Close ofthe Site Transfer Escrow and Prior to the Recordation of the Certificate of Completion. Subject to the Close of the Site Transfer Escrow the Developer covenants and agrees for itself, its successors, and assigns to maintain the Site, in a good condition free from any accumulation of debris or waste material subject to normal construction job site conditions. In the event that at any time between the Close of the Site Transfer Escrow and the recordation ofthe Certificate of Completion, the Developer, or its successors or assigns, fails to perform the maintenance as required herein, the Agency shall have the right, but not the obligation, to enter the Site and undertake maintenance activities upon thirty (30) days prior written notice to the Developer. In such event, and cumulative with all of the other rights and remedies of the Agency, including the separate and cumulative remedies ofthe Agency as arise under the Agency Regulatory Agreement, the Developer shall reimburse the Agency for all reasonable sums incurred by it for such maintenance activities. The obligation of the Developer under this Section 3.5 with respect to the Site shall be discharged on the date when the Agency has issued its Certificate of Completion for the redevelopment of the Project. SECTION 3.6. Al!encv Loan Deed of Trust Subordination to Construction Loan(s) for tbe Project. (a) The Agency hereby agrees to subordinate the Agency Loan Deed of Trust in the Project and the Agency Regulatory Agreement to the security interest of a Construction Lender under a Construction Loan which is secured by the Project pursuant to a subordination with such Construction Lender (each such subordinate agreement is referred to as a "Construction Lender Subordination Agreement"), subject to the satisfaction of the following conditions and provided that the Senior Citizen Rental Housing Use 42 CDC/2009-39 Covenant shall at all times remain in a first and prior recorded in a priority recorded position as to the Construction Loan and the Permanent Loan: (i) the maximum principal amount of all such Construction Loans (including funded interest reserves and customary and reasonable costs of financing of the Construction Loan) shall not exceed an approximate dollar amount presently estimated to be the amount as set forth in the Developer Project Pro Forma, subject to modifications as may be approved by the Agency Executive Director, and the Construction Loan shall not permit the disbursement of "soft costs" to the Developer in excess of percent of the principal amount of the Construction Loan as also set forth in the Developer Project Pro Forma until the Project improvements are complete. No Construction Loan may contain a "land draw" or authorize another disbursement of the proceeds of such a Construction Loan which is not related to actual, reasonable and incurred development costs of the Project; (ii) at the time of the Agency's execution of the Construction Lender Subordination Agreement, there shall be no default of the Developer under this Agreement or the Agency Loan Documents; (iii) no provisions of the Construction Lender Subordination Agreement shall require the Agency to first obtain the consent of such Construction Lender before the Agency may assert any remedy against the Developer or realize upon the value of any security given by the Developer to the Agency under this Agreement or the Agency Loan Note or the Agency Loan Deed of Trust; and (iv) the Construction Loan documents shall contain provisions reasonably satisfactory to the Agency which assure the Agency that: (I) an independent lender's disbursement control service shall be used to perform the customary functions of a construction lender disbursement control and payment verification for the portion of the Project; (2) the Construction Loan documents shall not be materially modified or amended following the recordation of the Construction Lender Subordination Agreement without the Developer first obtaining the written approval of the Agency; (b) The Developer shall be solely responsible for obtaining each Construction Loan and nothing herein shall be deemed to be an undertaking or commitment by the Agency to arrange for, obtain, guarantee or participate in any such Construction Loan. The Developer agrees to exercise best faith efforts to obtain the necessary Construction Loan for the improvements to be constructed as part Project. Each Construction Loan shall be obtained by the Developer from a reputable, recognized and well established financial institution or commercial lending source, including but not limited to a bank, savings and loan institution, insurance company, real estate investment trust, pension fund and the like. (c) Provided that the Agency has received and previously approved a Construction Loan commitment relating to a particular Construction Loan as set forth in Section 2.22, the Agency shall review and consider a request for subordination of the Agency Loan Deed of Trust concurrently within the Agency's consideration of the Construction Loan documentation under Section 3.8(b)(iii). The Agency shall deliver its approval or disapproval of the applicable Construction Loan Subordinate Agreement 43 CDC/2009-39 within thirty (30) days after submittal by the Developer of the notice described in the preceding sentence. If after such thirty (30) day period the Agency has not responded in writing, the Developer's submittal of the request for Agency Loan Deed of Trust subordination shall be deemed approved. In the event of disapproval of the Construction Loan Subordinate Agreement, the Agency shall concurrently within the delivery of the notice of such disapproval, inform the Developer in writing of the reason for disapproval and the required changes to the proposed Construction Lender Subordinate, if any, to make it acceptable to the Agency. SECTION 3.7. Construction of Proiect Improvements. (a) The Developer shall construct all of the improvements for the Project in substantial accordance with the final Plans approved by the City and the terms and provisions set forth in this Agreement. Without limitation of the foregoing, the Developer specifically acknowledges and agrees that the Developer shall be responsible for satisfying all ofthe conditions necessary to ensure that the Project conforms to all applicable CEQA requirements and mitigations and the conditions of approval of each Development Project Application and each Development Project Permit. (b) The Developer shall commence and complete or cause the commencement and completion of the preparation of all Plans, (whether before or after the Close of the Site Transfer Escrow) improvements for the Project in accordance with the times set forth in the Schedule of Performance and the terms ofthis Agreement. The Developer shall commence and complete or cause the commencement and completion of the improvements for the Project, and shall make all submissions and secure all approvals in connection therewith, prior to the deadlines set forth in the Schedule of Performance subject to force majeure events. If the Developer fails to commence or cause commencement of construction of the improvements for the Project prior to the deadline established therefore in Schedule of Performance, or if the Developer commits a material default under this Agreement, including, without limitation, the failure to proceed with and complete construction of the improvements for the Project prior to a deadline established therefore in the Schedule of Performance, the parties shall be entitled to exercise the rights and remedies and be afforded the protections as specified further in Article V hereof. SECTION 3.8. Securitv Financinf!: No Encumbrances Except for Development Purposes. (a) The Developer shall have no right or power to create or impose any Security Financing Interest on the Property except as set forth in this Agreement. The Developer shall create no security interest in Parcel 2 of Parcel Map No. 19200 following the recordation of such final parcel map. Notwithstanding any other provision of this Agreement, following the Site Transfer Escrow Closing, mortgages and deeds of trust, or any other reasonable method of security, are permitted to be placed upon the Site, but only for: (i) the purpose of securing loans of funds to be used for the payment by the Developer of actual and reasonable costs of, design and construction of the Project and any other expenditures necessary and appropriate to redevelop the Site under this Agreement, and costs and expenses incurred or to be incurred by the Developer in furtherance of this Agreement and/or (ii) with respect any permit financing affecting the Project following the date when the Certificate of Completion has been issued to the Developer by the Agency and filed for recordation. (b) The Developer agrees to submit to Agency certain documents as set forth in this Section 3.8 as evidence that Developer has obtained the equity (including Developer Equity) and other contractual commitments to finance and develop the Project, as required by this Agreement. Such submittals to the Agency shall consist of the following: 44 CDC/2009-39 (i) By the date specified in Section 2.22, the Developer agrees to deliver to the Agency, for its written approval, which approval shall not be wrreasonable withheld, a written commitment (or commitments) (each or collectively as applicable "Construction Commitment"), from an institutional lender (the "Construction Lender") by which the Construction Lender shall represent that it has agreed, subject to customary closing conditions and final loan documentation consistent with the terms of such written commitment(s), to make a construction loan for the construction and improvement of the Project (each being referred to as a "Construction Loan") in accordance with this Agreement. A. The Developer's delivery of such Construction Commitment to the Agency shall be accompanied by a written notice addressed to the Interim Executive Director of the Agency which references this Section 3 .8(b lei). B. The Agency shall deliver its approval, or disapproval, of the Construction Commitment within thirty (30) days after submittal by the Developer of the notice described in the preceding sentence. If after such thirty (30) day period Agency has not responded in writing, the Developer's submittal of the Construction Commitment shall be deemed approved. C. In the event of any disapproval of the Construction Commitment, the Agency shall, concurrently with delivery ofthe notice of such disapproval inform the Developer in writing of the reason for disapproval and the required changes to the written commitment if any, to make it acceptable to the Agency. The Developer shall have thirty (30) days from receipt of any notice from the Agency specifYing required changes ("Commitment Disapproval Notice") within which to notifY the Agency that the Developer agrees to make such changes or objects to any requested changes. Ifthe Developer does not notifY the Agency in writing within such thirty (30) day period of its objections to the requested changes, then the Developer shall be deemed to have approved of all such requested changes. If the Developer notifies the Agency within said thirty (30) day period of its objections to the requested changes, then the Agency and the Developer agree to meet to discuss the differences within ten (10) days after the Developer gives such notice. Following such meeting, the Developer shall, if deemed necessary by the Agency, obtain a revised Construction Commitment and resubmit it for approval to the Agency, by the later of thirty (30) days after receipt of the Commitment Disapproval Notice or ten (10) days after such meeting with the Agency, unless the nature of such changes requires a longer period of time, in which case the Developer shall resubmit said Construction Commitment as soon as possible, and, in any case, no later than sixty (60) days after receipt of the Commitment Disapproval Notice. Any such resubmissions shall be approved or disapproved and revised within the times set forth herein with respect to the initial submission, and the Developer shall be entitled to not more than two (2) such resubmittals pursuant to this subsection. (ii) The amount ofthe Construction Commitment for the improvement of the Project shall not be less than (A) the amount of the Construction Contract for the improvement of the Project, less (B) the available undisbursed balance of the Agency Loan, ifany, less (C) the amount of any other Construction Loan amounts for which the Agency has previously approved a Construction Commitment, if applicable and (D) the amount of the Developer 45 CDC/2009-39 Equity including the equity to be provided by the Investor Limited Partner which shall be disbursed and available to the Developer to pay for the cost of constructing the improvement of the Project prior to the issuance by the Agency of the Certificate of Completion for the Project or the submission by the Developer of its final Project cost certifications to State TCAC. (iii) The Developer shall provide the Agency with a complete set of the documents, instruments and agreements which the Construction Lender proposes to use to evidence each Construction Loan at least thirty (30) days prior to the date when the Developer and/or such Construction Lender proposes to make an initial advance or disbursement to the Developer under such Construction Loan. A. The delivery of such documents by the Developer to the Agency shall be accompanied by a written notice addressed to the Interim Executive Director ofthe Agency which references this Section 3.8(b)(iii). B. The Agency shall within thirty (30) days after receipt of such Construction Loan documentation review such Construction Loan documentation and the Agency shall confirm that such documentation is consistent with the construction commitment for the particular Site Parcel as previously approved by the Agency under Section 3.8(b)(i). The approval of the Interim Executive Director ofthe Agency of such Construction Loan documents shall not be unreasonably withheld, conditioned or delayed. C. The Agency approval of one or more Construction Loans shall not constitute a waiver by the Agency of any breach or violation of this Agreement by Developer that is a result of acts that are or purport to be in compliance with or in furtherance of any Construction Loan including a Construction Loan which has been previously approved by the Agency. D. Notwithstanding anything herein which is or appears to be to the contrary, recordation of a notice of default with respect to any Construction Loan shall constitute a material default under this Agreement. (iv) The Developer represents that it intends to payoff each Construction Loan for the improvement of the Project upon the completion of improvement of the Project as evidenced by a Certificate of Completion issued by the Agency and that the Developer proposes to retain an interest in the Project upon completion of the redevelopment and improvement of the Project. The Developer agrees to deliver to the Agency, for its written approval (which approval shall not be unreasonably withheld) prior to the final maturity date of each Construction Loan, a written commitment (or commitments) (each or collectively (as applicable) "Permanent Commitment") from an institutional lender (the "Permanent Lender") by which such Permanent Lender shall represent that it has agreed, subject to customary closing conditions and final loan documentation consistent with the terms of said written commitment, to make a permanent loan (or loans) secured by the Developer's interest in the Project (the "Permanent Loan") in an amount at least equal to the then-outstanding Construction Loan or Construction Loans. 46 CDC/2009-39 A. The Permanent Loan may either be a continuation of the Construction Loan or it may be a new loan or multiple new loans. B. Such Permanent Loan shall be secured only by the Project, or interest therein, owned by the Developer and such credit enhancement as the Permanent Commitment may require from the Developer. C. The final Permanent Loan documents shall provide for notice to the Agency of any Developer default and a reasonable opportunity to cure. D. The Developer shall draw upon and utilize the Permanent Loan first to repay the Construction Loan being replaced. E. The Agency shall deliver its approval (or disapproval) of the Permanent Commitment within thirty (30) days after submittal. If after such thirty (30) day period Agency has not responded in writing, Developer's submittal shall be deemed approved. F. In the event of any disapproval, the Agency shall, concurrently with delivery of the notice of such disapproval to the Developer, inform the Developer in writing of the reasons for disapproval and the required changes to the written commitment. The Developer shall have thirty (30) days from receipt of any notice from the Agency specifying required changes ("Permanent Loan Commitment Disapproval Notice") within which to notify the Agency that the Developer agrees to make such changes or objects to any requested changes. If the Developer does not notify the Agency in writing within such thirty (30) day period of its objections to the requested changes, then the Developer shall be deemed to have approved of all such requested changes. G. If the Developer notifies the Agency within said thirty (30) days period of its objections to the requested changes, then the Agency and the Developer agree to meet to discuss the differences within ten (10) days after the Developer gives such notice. Following such meeting, the Developer shall, if deemed necessary by the Agency, revise the Permanent Commitment and resubmit it for approval to the Agency, as required by this Agreement, by the later of (i) thirty (30) days after receipt of the Permanent Loan Commitment Disapproval Notice or (ii) ten (10) days after such meeting, unless the nature of such changes requires a longer period oftime, in which case the Developer shall resubmit said Permanent Commitment as soon as possible, and, in any case, no later than sixty (60) days after receipt of the Permanent Loan Commitment Disapproval Notice. Any such resubmissions shall be approved or disapproved and revised within the times set forth herein with respect to the initial submission. (v) Agency approval of any Permanent Loan shall not constitute a waiver by the Agency of any breach or violation of this Agreement that is a result of acts that are or purport to be in compliance with or in furtherance of any outstanding Construction Loan or of any other the Permanent Loan. 47 __;.., ._~_"^ ''''^~_An'<\ Ah~~'" A"oehm~t<\A~~nrl. At!"<,"m~nt<\A~rmt<-Amend 2009\08-03.09 Met. Housinj(. Fi!l.lll DDA.drn: CDC/2009-39 (vi) The Agency hereby agrees to subordinate the Agency Loan Deed of Trust in the Project and the Agency Regulatory Agreement to the security interest of a Permanent Lender under a Permanent Loan which is secured by the Project pursuant to the terms of a subordination agreement that is reasonably acceptable to the Agency and otherwise in substantial conformance with Section 3.6 above. (c) Upon the Agency's written request delivered to the Developer, the Developer agrees to demonstrate, to the Agency's reasonable satisfaction that: (i) the source of the funds providing the Developer Equity contribution on which the Developer will rely to obtain financing for all or the necessary portion ofthe Developer's costs ofthe Project, and (il) the Developer shall demonstrate that subject only to customary Contribution Loan and/or Permit closing conditions required by such third party lenders and as reasonably acceptable to the Agency, that such funds are committed to funding development costs of the Project, and (ii) the amount of such Developer Equity funds committed, when added to the Agency Loan, the Construction Loan, and any other funding sources available for construction, is sufficient to cover all costs of the completion of the improvements. (d) Not less than thirty (30) days prior to the close of the Construction Loan Escrow, the Developer agrees to deliver to the Agency, for its review and approval, the form construction contract(s) (collectively, the "Construction Contract") for the improvement of the Project. (i) The Construction Contract shall obligate one or more general contractors (collectively, the "General Contractor"), who is (a) capable of obtaining proper bonding of their performance, (b) licensed in California, and (c) has substantial experience in completing the type of improvements contemplated by this Agreement, to commence and complete the construction of the improvements for the Project in accordance with this Agreement. (ii) The word "bonded" as is used in the preceding subsection, shall mean that the General Contractor shall provide the Developer with a construction payment and completion surety or construction performance letter of credit or other security in a form and amount satisfactory to the Agency in the exercise of its sole discretion, which names the Developer and the Agency as beneficiary of such payment and completion security. (iii) The Developer shall comply with the requirements of Section 3.8(d) and Section 3.8(e) prior to the commencement of any work constituting the construction of the Project. (iv) Subject to the requirements of all applicable law, including, without limitation, California Civil Code Section 3268, the Construction Contract for any of the improvement of the Project shall provide for a retention, until the final payment is due to the General Contractor of reasonable retentions from each progress payment for construction work performed. Such retention shall be retained by the Developer until the occurrence of both of the following events: A. the expiration ofthirty five (35) days from the date of recording by the Developer as owner of a notice of completion for the applicable improvements, which the Developer agrees to record promptly within the times specified by law for the recording of such Notice; and 48 P:lAl;:endaslA)l:enda Attachmenls\AJlenda AlIachmenlslAJlenda Altachmems\Ail;rmts-Amend 2009\OB-03-09 Meta HQusin~ _ Final DDA doc CDC12009-39 B. the settlement and discharge of all liens and charges claimed by persons who supplied either labor or materials for the construction of the applicable improvements. (v) Each Construction Contract shall give the Agency the right, but not the obligation, to cure defaults thereunder and provided, that such right to cure shall be subordinate to and subject to the rights, if any, of the Developer's Construction Lender with respect to such Construction Contract. (vi) The Agency shall deliver its approval (or disapproval) of the Construction Contract within thirty (30) days after submittal. If after such thirty (30) day period Agency has not responded in writing, Developer's submittal shall be deemed approved. A. In the event of any disapproval, the Agency shall, concurrently with delivery ofthe notice of such disapproval to the Developer, inform the Developer in writing ofthe reasons for disapproval and the required changes to the written commitment. The Developer shall have thirty (30) days from receipt of any notice from the Agency specifying required changes ("Construction Contract Disapproval Notice") within which to notify the Agency that the Developer agrees to make such changes or objects to any requested changes. If the Developer does not notify the Agency in writing within such thirty (30) days period of its objections to the requested changes, then the Developer shall be deemed to have approved of all such requested changes. B. If the Developer notifies the Agency within said thirty (30) days period of its objections to the requested changes, then the Agency and the Developer agree to meet to discuss the differences within ten (10) days after the Developer gives such notice. Following such meeting, the Developer shall, if deemed necessary by the Agency, revise the Construction Contract and resubmit it for approval to the Agency, as required by this Agreement, by the later of (i) thirty (30) days after receipt of the Construction Contract Disapproval Notice or (ii) ten (10) days after such meeting, unless the nature of such changes requires a longer period of time, in which case the Developer shall resubmit said Construction Contract as soon as possible, and, in any case, no later than forty five (45) days after receipt of the Construction Contract Disapproval Notice. Any such resubmissions shall be approved or disapproved and revised within the times set forth herein with respect to the initial submission, and the Developer shall be entitled to not more than two (2) such resubmissions pursuant to this subsection. (e) Prior to the commencement of construction of the Project, the Developer or its General Contractor, shall furnish the Agency with a contractor's performance bond in an amount not less than one hundred percent (100%) of the costs for the improvements and a payment bond guaranteeing contractor's completion of those improvements free from liens of materialmen, contractors, subcontractors, mechanics, laborers, and other similar liens. Such contractor's performance bonds shall be issued by a responsible surety company, licensed to do business in California, and with a financial strength and credit rating acceptable to the Agency by an insurance company or companies that have an AM Best Rating of A - V or better and shall remain in effect until the entire costs for such improvements shall have been paid in full. Any such contractor's performance bonds shall be in a form reasonably satisfactory to the Agency and its 49 P:\AgendasIAgenda Attachment.lAgend. Auachment,\Agenda AttachmentslA)<'ml,-Amend 2009\08-03_09 Meta H"tt<;"o _ Fin,] no.!. ~ne CDC/2009-39 legal counsel. Such contractor's performance bonds may be the bonds obtained by the Developer which name the Agency as a beneficiary or co-beneficiary. SECTION 3.9. Security Financinl! Interests. (a) The holder of any Security Financing Interest authorized by this Agreement ("Holder") is not obligated to construct or complete any improvement of the Project. However, nothing in this Agreement shall be deemed to permit or authorize any such Holder to devote the Site, or any portion thereof, to any use, or to construct any improvements thereon, other than those uses of improvements provided for or authorized by this Agreement. (b) Whenever the Agency, pursuant to its rights set forth in this Agreement, delivers any notice or demand to the Developer to cure or correct a default or breach with respect to the redevelopment of the Project, the Agency shall at the same time deliver to each Holder of record any Security Financing Interest creating a lien upon the Site, a copy of such notice or demand of the Agency. Each such Holder shall (insofar as the rights of the Agency are concerned) have the right, but not the obligation, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default or breach affecting the Site which is subject to the lien of the Security Financing Interest held by such Holder and to all the costs thereof to the security interest debt and the lien on the security interest. (c) In any case where within one hundred and eighty (180) days after the occurrence of a default or breach by the Developer for which the Agency has given notice to the holder of any Security Financing Interest under Section 3.9(b), and such holder has exercised its option to construct the improvement ofthe Project, but such holder has not proceeded diligently with construction, the Agency shall thereupon be afforded the same rights and remedies against such holder of a Security Financing Interest for such default or breach of the Developer as the Agency would otherwise originally have had against Developer under this Agreement. (d) In the event of a default or breach by the Developer under a Security Financing Interest prior to the completion of redevelopment of the Project or portion thereof, and the holder has not exercised its option to complete the improvement of the Project (or such portion thereof encumbered by the Security Financing Interest), the Agency, at its sole option and election, but without any obligation to do so, may cure the default or breach of the Developer to such holder, prior to the completion of any foreclosure under such holder's Security Financing Interest. In such event the Agency shall be entitled to reimbursement from the Developer of the principal amount paid by the Agency to cure or satisfY the defaults plus interest, at the penalty rate set forth in the agency Loan Note, and all reasonable other costs and expenses incurred by the Agency in curing the default of the Developer. The Developer hereby agrees that the Agency shall also be entitled to a lien upon the Project, or any portion thereof to secure the repayment of such amount to the Agency. The Agency agrees that in the event that the such a lien in favor of the Agency may arise under this Section 3.9( d), that the lien of the Agency shall be subordinate to any other Security Financing Interest approved or deemed approved by the Agency prior to the date of such advance by the Agency. The Agency shall execute from time to time any and all documentation reasonably requested by Developer to effect such subordination of the lien right of the Agency as may arise under this Section 3.9(d) with respect to the Project. (e) In addition to the optional right of the Agency to cure a default or breach of the Developer under a Security Financing Interest as set forth in Section 3.9(d), the Agency, at its sole option and election, shall have the right to satisfY any other lien or encumbrance affecting the Project after the 50 _,. _u.. .___._^_..\.~_., 'H.~h__"\'u~A. 'Hoeh~pn"U","m,<.A",~~A ?O()q\(l~_(H_OQM",. H~Il,ino _ fiM! nOAdoc CDC/2009-39 Developer has received a thirty (30) day notice of intention of the Agency to pay such lien or encumbrance. The Agency shall not payor satisfY such a lien or encumbrance until the Developer has been accorded a reasonable period of time to challenge, cure or satisfY such a lien or encumbrance; provided, however, that nothing in this Agreement shall require the Developer to payor make provisions for the payment of any lien or charge (except a lien or charge for ad valorem property taxes) so long as the Developer in good faith shall contest the validity or amount therein and so long as such delay in payment by the Developer shall not subject the Project or any portion thereof to forfeiture or security lien sale. In the event that the Agency may satisfy any such lien or encumbrance the Agency shall be entitled to reimbursement from the Developer ofthe principal amount paid by the Agency to cure or satisfY the lien or encumbrance plus interest at the penalty rate set forth in the Agency Loan Note, and all reasonable costs and expenses incurred by the Agency in satisfying the lien or encumbrance. The Developer hereby agrees that the Agency shall also be entitled to a lien upon the Project, or any portion thereof, to secure such repayment to the Agency. Any such lien of the Agency under this Section 3.9(e) shall be subordinate to each Security Financing Interest approved or deemed approved by the Agency. (f) The Developer, for itself, its successors and assignees hereby warrants and agrees that the Developer shall give to any Holder notice of the terms and conditions contained in this Section 3.9 and shall use commercially reasonable efforts to cause each provision contained in this Section 3.9 dealing with Security Financing Interests and rights of holders of such interests, either to be inserted into the relevant deed of trust or mortgage or to be acknowledged by the Holder prior to its perfection of any such Security Financing Interest right or interest in the Site or the Project. SECTION 3.10. Estoooel Statement. Upon the request of the Developer, a proposed Permitted Transferee under Section 1.6 of the Developer, or any Holder, the Agency shall issue a signed estoppel statement stating that this Agreement is in full force and effect and that no default hereunder exists on the part of the Developer or any successor, or if such default is claimed by the Agency to then exist, such estoppel statement shall identifY the nature of such default. Such estoppel statement shall be delivered by the Agency to the Developer within thirty (30) days following receipt of written request therefore. The Agency may charge the Developer for the reasonable cost of Agency incurred in consultation with its attorney in connection with such request for an estoppels statement in an amount not to exceed $1,500. SECTION 3.11. Certificate of Comoletion. (a) Upon substantial completion of the improvement of the Project, the Agency shall prepare a Certificate of Completion substantially in the form of Attachment No. 15 in accordance with this Section 3.11 within sixty (60) days following receipt by the Agency of a written request therefore by the Developer. The Certificate of Completion shall evidence a conclusive determination by the Agency of satisfactory completion of the improvement of the Project by the Developer. After the recordation of the Certificate of Completion by the Agency, neither the Developer, nor any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Project (or such portion thereof affected by the Certificate of Completion) shall (because of such ownership, purchase, lease or acquisition) have any further obligation or liability under this Agreement for matters arising prior to the date of recordation ofthe Certificate of Completion or thereafter; provided, however, that certain covenants contained in Article IV P:\Agendas\Agenda Attachmen15\Agenda Attachmenls\Ao:enda Altachmenls\A~rm"_Am.~~ 'MQ\~~_I\1_"" u~_ u_ 51 CDC/2009-39 of this Agreement, shall bind each successor in interest of the Developer in each Site Parcel (or such portion thereof affected by the Certificate of Completion) as covenants which run with the land. (b) At least sixty (60) days prior to the submission to the Agency of its request for the issuance of a Certificate of Completion, the Developer shall deliver to the Agency the Project cost audit and accounting information for the Project, as provided under Section 2.25. (c) At least sixty (60) days prior to the submission to the Agency of its request for the issuance of a Certificate of Completion, the Developer shall deliver to the Agency a suitably detailed written confirmation that the affordable rental housing occupancy covenants of the Developer as arise under the Agency Regulatory Agreement and the State TCAC Regulatory Agreement have been satisfied. (d) If the Agency withholds the execution of a Certificate of Completion, then the Agency shall, within said thirty (30) days of the date of the written request for the issuance of a Certificate of Completion for the Project, provide to the Developer a written statement setting forth the reasons with respect to the Agency's refusal or failure to prepare and execute a Certificate of Completion. The statement shall also contain a detailed description of the action the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to minor building "punch list" items, the Agency shall issue its Certificate of Completion conditioned upon the delivery of cash or other reasonably acceptable surety in an amount and terms subject to the reasonable approval of the Interim Executive Director of the Agency. No such Certificate of Completion ofthe Agency shall be deemed to constitute a notice of completion as referred to in Section 3093 of the California Civil Code. (e) For the purpose of determining the "completion date ofthe Project" under the definition of the terms of "Residual Rental Receipts of the Project," the completion date of the Project shall be the date on which the Certification of Completion is recorded against the Site by the Agency. SECTION 3.12 [Reserved - No Text] SECTION 3.13 [Reserved - No Text] SECTION 3.14. Insurance of the DeveloDer. (a) In order to protect the Agency, its governing board, commiSSIOns, agents, officers, employees and authorized representatives against all claims and liability for death, injury, loss and damage as a result of Developer's actions in connection with the Agency Loan, the assistance provided by the Agency under this Agreement and the design, construction, operation and financing of the Project, the Developer shall secure and maintain insurance as described in this Section 3.14. Such insurance shall be in full force and effect as of the Effective Date, and thereafter the Developer shall continuously maintain such insurance for the term of the Agency Regulatory Agreement. Developer shall pay any deductibles under all required insurance policies. (b) Developer shall submit written proof to the Agency that Developer is insured against liability for workers' compensation in accordance with the provisions of section 3700 of the Labor Code. In signing this Agreement, Developer makes the following certification, required by section 1861 of the Labor Code: 52 P:\A~endas\A~enda AnachmenlS\A~enda Attachmem.lAl1enda AnachrnenlS\A.".ml<-Amen~ 200<l\OR_0l_fI<l 1..1.... Hn...;no _ "1';",' nnA An" CDC/2009-39 "I am aware of the provisions of section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self- insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of the Agreement." Developer shall require each contractor and sub-contractor engaged to perform any work on the Project to provide workers' compensation for all of such contractors' or sub-contractors' employees, unless the contractors' or sub-contractors' employees are covered by worker's compensation insurance afforded by the Developer. If any class of employees engaged in work or services performed in connection with the Project is not covered by Labor Code Section 3700, the Developer shall provide and/or require each contractor or sub-contractor to provide adequate insurance for the coverage of employees not otherwise covered. (c) The Developer shall maintain in full force and effect, at all times during the term of this Agreement, the following insurance: (i) Conunercial General Liability Insurance coverage, including, but not limited to, premises-operations, contractual liability insurance (specifically conceming the indemnity provisions ofthis Agreement and the Agency Performance Deed of Trust and the Agency Regulatory Agreement), products-completed operations hazards, personal injury (including bodily injury and death), and property damage for liability arising out ofthe construction of the Project and/or Developer's operation of the Site pending commencement of construction of the Project. Said insurance coverage shall have minimum limits for bodily injury and property damage liability of TWO MILLION DOLLARS ($2,000,000) each occurrence and FOUR MILLION DOLLARS ($4,000,000) aggregate. (ii) Automobile liability insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used by Developer with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy. (iii) If the Developer hires one or more consultants to provide design services, such as architectural or engineering services in connection with the Project, the Developer shall require such consultant to provide professional liability (errors and omissions) insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000). (iv) Upon acceptance of the Project construction items by the Developer, or any portion thereof, from each contractor, the Developer shall maintain fire and extended coverage insurance on the Project on a blanket basis or with an agreed amount clause in amount not less than 100% of the Project's replacement value. (d) During the course of construction of the Project, Developer shall require that all contractors performing work on the Project to maintain the following insurance coverages at all times during the performance of said work: 53 n.\. ___"__1 '~~R." A~'"~_An'.\~~o~A. ..".~\'~~"'o\"n.",j. .....rh"'_~.<\A~.m"...m~",j 'Oflll\(l~_nl_OQ MM, Hn",ino. FiMI nnA doc CDC/2009-39 (i) builder's risk insurance to be written on an all risk completed value form, in an aggregate amount equal to 100% of the completed insurable value of the building(s). (ii) Commercial general liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate to protect the Developer during the construction phase from claims involving bodily injury and/or death and damage to the property of others. Said insurance shall include an endorsement to include owners' and contractors' protective coverage. (iii) Automobile liability insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used in the performance of a contractor's obligations to the Developer with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and ONE MILLION DOLLARS ($1,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy. (e) The commercial general liability insurance required in Section 3.14( c) and (d), above shall include an endorsement naming the Agency and its officials, officers, agents, and employees as additional insureds for liability arising out of this Agreement and any operation related thereto. (f) If any of the insurance coverages required under Section 3.14(d) of this Agreement is written on a claims-made basis, such insurance policy shall provide an extended reporting period continuing through the fifth (5th) anniversary following the date of acceptance of the improvements by Developer. (g) As of the Effective Date, evidence of insurance in compliance with the requirements of Section 3 .14(b) shall be furnished to the Agency by the Developer, as evidenced by a endorsements to such policies or contracts of insurance issued by the insurer in favor of the Agency and/or by one or more "certificate of insurance" issued by the authorized agents or attorneys-in-fact of such insurers in a form acceptable to the Agency Counsel. Receipt of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements set forth above. (h) The insurance coverages required to be maintained and/or provided by the Developer under this Agreement shall be maintained until the completion of all of Developer's obligations under this Agreement, and shall not be reduced, modified, or canceled without thirty (30) days prior written notice to Agency. Also, phrases such as "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall not be included in the cancellation wording of all certificates of insurance or any coverage for the Agency. The Developer shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non-renewed, or whose policy limits have been exhausted or upon insolvency of the insurer that issued the policy. (i) All insurance shall be issued by an insurance company or companies that have an AM Best Rating of A - V or better and listed in the current "Best's Insurance Guide" publication and be a California admitted insurance company. G) All insurance afforded by the Developer pursuant to this Agreement shall be primary to and not contributing to any other insurance maintained by the Agency. Insurance coverage in the minimum 54 P.\A".~~..\Aapn~. A.hrhm.nl<IAQend. Allathm"nl<\A~enda Atlachmenls\Aermls.Amend 2009\08-03-09 Meta Hou.;n~ - final DDAdoc CDC12009-39 amounts set forth herein shall not be construed to relieve the Developer for any liability, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the Agency from taking such other actions as are available to it under any other provision of this Agreement or otherwise in law. Failure by the Developer to maintain all such insurance in effect at all times required by this Agreement shall be an event of default by Developer. The Agency, at its sole option, may exercise any remedy available to it in connection with such an event of default. Alternatively, the Agency may purchase such required insurance coverage, and without further notice to Developer, the Agency shall invoice any sums due from Developer any premiums and associated costs advanced or paid by the Agency for such insurance or the Agency may demand that additional sums be paid to the Agency by the Developer. Any failure by the Agency to take this alternative action shall not relieve the Developer ofits obligation to obtain and maintain the insurance coverages required by this Agreement. (k) During the term of the Agency Loan Deed of Trust any inconsistency or conflict between the insurance coverage provisions of this Section 3.14 and the Agency Loan Deed of Trust, the insurance coverage provisions of the Agency Loan Deed of Trust shall prevail and be applicable to the Developer SECTION 3.15. Taxes. Assessments. Encumbrances and Liens. (a) The Developer shall pay prior to the delinquency all real property taxes and assessments assessed and levied on or against the Site subsequent to the Close of Site Transfer Escrow. (b) The Developer shall not place and shall not allow to be placed on the Site any mortgage, trust deed, deed oftrust, encumbrance or lien not otherwise authorized by this Agreement. The Developer shall remove, or shall have removed, any levy or attachment made on the Site, or shall assure the satisfaction thereof. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. ARTICLE IV USE OF THE SITE AND THE PROJECT SECTION 4.1. Use ofthe Site. (a) Developer hereby covenants and agrees, for itself and its successors and assigns, that the Site and the Project shall be developed, used and maintained as multifamily rental housing for occupancy by Senior Citizen Households. (b) As of the Effective Date of this Agreement, the Developer has submitted an affordable senior citizen household rental project tax credit application to State TCAC in support of the Project and the Developer has covenanted and warranted to State TCAC, as part of such tax credit application, that the Affordable Rental Units in the Project shall be reserved for use and occupancy by Senior Citizen Households whose armual income level at the time of initial occupancy by each such Senior Citizen Household of its Affordable Rental Unit in the Project shall be generally as follows: P,lAgendas\Agenda Allachmenl!\Agenda Attachmenls\Agenda Anachments\Al!Tmts-Amend 2009\n~..o1_0q M.... l-Im..;"" _ "'n.1 nn 0 A~_ 55 CDC/2009-39 Percentage No. of One- No. of Two- Total No. AMI Bedroom Units Bedroom Units of Units 1. 30% 6 2 8 2. 40% 8 0 8 3. 50% 34 6 40 4. 60% 20 3 23 68 II 79 SECTION 4.2. No Inconsistent Use. Developer covenants and agrees that it shall not devote the Site to uses inconsistent with either this Agreement or the Agency Regulatory Agreement. SECTION 4.3. [Reserved - No Text] SECTION 4.4. Discrimination Prohibited. Except as provided in the Senior Citizen Rental Housing Use Covenant and the Agency Regulatory Agreement with respect to the reservation of each of the rental units in the Project for occupancy by Senior Citizen Households, there shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, familial status, physical or mental disability, ancestry or national origin in the rental, sale, lease, sublease, transfer, use, occupancy, or enjoyment of the Project or the Site, or any portion thereof, nor shall the Developer, or any person claiming under or through Developer, 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 Project or the Site or any portion thereof. The nondiscrimination and nonsegregation covenants contained in the Agency Regulatory Agreement shall remain in effect in perpetuity. SECTION 4.5. Effect of Covenants. The Agency is the beneficiary ofthe terms and provisions of this Agreement and of the restrictions and community redevelopment and affordable rental housing covenants running with the land, whether or not appearing in the Agency Regulatory Agreement for and in its own right and for the purposes of protecting the interests ofthe community in whose favor and for whose benefitthe covenants running with the land have been provided. The community redevelopment and affordable rental housing covenants in favor of the Agency shall run without regard to whether Agency has been remains or is an owner of any interest in the Site, and shall be effective as both covenants and equitable servitudes against the Site. If any of the community redevelopment and affordable rental housing covenants set forth in this Agreement are breached, the Agency shall have the right to exercise all rights and remedies and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it may be entitled. No other person or entity shall have any right to enforce the terms of this Agreement under a theory of third-party beneficiary or otherwise; except the City as the successor in regulatory function of the Agency and residents of the Project and applicants to become residents of the Project, as provided in Health and Safety Code Section 33334.4, or other applicable law. 56 P:\Agendas\Agend. Attachments\Agenda Anachmenu\Agenda Anachments\Agrmts-Amend 2009\08-03-09 Meta Housing. Final DDA doc CDC/2009-39 SECTION 4.6. Listine of Provisions of this Aereement which Shall Remain In Full Effect Followine the Recordation of the Certificate of Comnletion. In addition to the provisions of this Article IV, Article V and Article VI of this Agreement which shall remain in full force and effect following the recordation of the Certificate of Completion each of the following shall remain in full force and effect following the recordation of the Certificate of Completion for the Project: (i) the Agency Loan Documents; (ii) the covenants of the Developer under the Agency Grant Deed; (iii) the covenants of the Developer under the Agency Regulatory Agreement; (iv) the provisions of Section 5.9 of this Agreement; ARTICLE V DEFAULTS. SECTION 5.1. Events of Default. (a) The occurrence of any of the following is a default and shall constitute a material breach of this Agreement and, if not corrected, cured or remedied in the time period set forth in Section 5 .1 (b), shall constitute an "Event of Default" hereunder: (i) failure of the Developer or any person under its direction or control to comply with or perform when due any material term, obligation, covenant or condition contained in this Agreement; (ii) failure by the Agency to comply with or perform when due any material term, obligation, covenant or condition contained in this Agreement; (iii) failure by the Developer or any person under its direction or control to comply with or perform when due any material term, obligation, covenant or condition contained in the Agency Loan Deed of Trust; (iv) any warranty, representation or statement made or furnished to the Agency by the Developer under this Agreement is false or misleading in any material respect either now or at the time made or furnished; (v) the dissolution or termination of the existence of the Developer as an ongoing business, insolvency, appoint of a receiver for any part of the property of the Developer, any assignment for the benefit of creditors, any type of creditor workout or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the Developer. (b) Upon the determination by the Agency that a default has occurred, the Developer shall cause such default to be cured within the following periods oftime: 57 P:\A,o,end",lA~enda Anachment.\A~"nda Att.~hm~n"\A~pn,j. "'tt'rhm~n"\"'n~'._ A~~~" ~OV\mt\O f1' "" ,,__ n____'__ CDC/2009-39 (i) if a monetary Event of Default occurs under the terms of the Agency Loan Note, Agency Deed of Trust or other Construction Loan Documents or the Permanent Loan Documents on the State TCAC Regulatory Agreement, prior to exercising any remedies under this Agreement the Agency shall give the Developer written notice of such default. The Developer shall have a period of seven (7) days after such notice is given within which to cure the default prior to exercise of remedies by tbe Agency, or such longer period of time as may be specified in the Agency Loan Documents. (ii) If a non-monetary event of default occurs under the terms of tbe Agency Loan Note, Agency Deed of Trust or the Construction Loan Documents or tbe Permanent Loan Documents or the State TCAC Regulatory Agreement, prior to exercising any remedies under this Agreement tbe Agency shall give the Developer written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, as determined by tbe Agency in its sole discretion, the Developer shall have such period to effect a cure prior to exercise of remedies by the Agency under this Agreement and the Agency Loan Documents, or such longer period of time as may be specified in this Agreement and the Agency Loan Documents. If the default is such that it is not reasonably capable of being cured within thirty (30) days, as determined by the Agency in its sole discretion, or such longer period if so specified, and if the Developer (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then tbe Developer shall have such additional time as is determined by tbe Agency, in its sole discretion, to be reasonably necessary to cure the default prior to exercise of any remedies by the Agency. If the Developer or its successor in interest is a limited partnership, if the Developer fails to take corrective action or to cure the default within such a specified time, the Agency shall give the Developer written notice thereof, whereupon the limited partner may remove and replace the general partner with a substitute general partner who shall effect a cure within a reasonable time thereafter in accordance with the foregoing provisions. In 0 event shall the Agency be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by a failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given. SECTION 5.2. Notice of Default. Subject to the provisions of Section 5.1 hereof, the non-defaulting party shall give written notice of default to the party in default in accordance with Section 6.5, stating tbat such notice is a "Notice of Default", specifying the default complained of by the injured party and requiring tbe default to be remedied witbin thirty (30) days oftbe date oftbe Notice of Default. Except as required to protect against further material damage, the injured party may not institute legal proceedings against the party in default until thirty (30) days after giving notice. Failure or delay in giving notice shall not constitute a waiver of any default, nor shall it change tbe time of occurrence of the default. If tbe default specified in the Notice of Default is such that it is not reasonably capable of being cured witbin tbirty (30) days, and if the party to whom tbe notice is addressed initiates corrective action witbin said thirty(30) day period and diligently works to effect a cure as soon as possible, then such party may have such additional time as authorized in writing by the other party as reasonably necessary to 58 P'\A~p~~..\A~pnn. A...~hm~n,,',AoP"n. A",p"~~n..\A~.nn. Aff.~h_.n"\'~'_" .___~ ~M"\M M nnu_._ H_ CDC/2009-39 complete the cure of the breach prior to exercise of any other remedy for the occurrence of an Event of Default. Such authorization for additional time to cure shall not be unreasonably withheld. If a party fails to take corrective action relating to a default within thirty (30) days following the date of notice (or to complete the cure within the additional as may be authorized by the other party), an Event of Default shall be deemed to have occurred. SECTION 5.3. Inaction Not a Waiver of Default. Any failure or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. SECTION 5.4. Remedies; Enforcement of Aereement. (a) The non-defaulting party at its discretion shall have the right to terminate this Agreement upon an Event of Default. If the non-defaulting party chooses to terminate this Agreement due to the occurrence ofan Event of Default, the non-defaulting party shall give the defaulting party forty-five (45) days prior written notice of the effective termination date. (b) In the event that following the occurrence of the Initial Advance of the Agency Loan, the Site Transfer Escrow may not close for any reason not attributed to the fault of the Agency by the date indicated in Section 2.10, the Agency may accelerate the payment of the outstanding principal balance of the Agency Note, plus accrued interest thereon, and demand payment under the terms of the Meta Housing Corporation Guaranty. (c) In addition to pursuing the rights and remedies available to the Agency under this Agreement, the Agency may foreclose on the Agency Deed of Trust and exercise its otherremedies under any of the Agency Loan Documents and/or the Agency Regulatory Agreement. (d) In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, in any other appropriate court in that County or in the Federal District Court in the Eastern District of California. In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Interim Executive Director of the Agency or the Chair of the Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service on the Developer's agent for service of process, or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. SECTION 5.5. Riehts and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in this Agreement as relates to a failure of conditions precedent occurring before the Close of the Site Transfer Escrow, the rights and remedies of the parties as set forth in this Article V are cumulative and the exercise by either 59 P:lAgendaslAgenda Attachment.lAgend. Allachmenl,IAgenda Anachmem,\Agrmls_Amend 2009\08-03-09 Meta Housing _ Final DDAdoe CDC12009-39 party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. SECTION 5.6. No Consequential Damal!es. Notwithstanding any other term of this Agreement, neither the Agency or its officers, officials, employees and agents shall be liable to the Developer or to any third party for any loss of use of the Site or the Project, loss of goodwill relating to the Developer, the Site, the Project, or the Mixed Use Component of the Site, interruption of business, or for indirect, incidental or special or consequential damages (including without limitation, lost revenues or profits of the Developer) or similar damages, whether based on tort, contract or other legal or equitable grounds. SECTION 5.7. Mutual Indemnification. Each party agrees and shall indemnifY and hold each other, its directors, officers, elected officials, employees, agents, authorized volunteers, or representatives, free and harmless from all claims, demands, actions, damages and liabilities of any kind and nature arising from bodily injury, including death, violations of right to privacy, or property damage, based or asserted upon any actual or alleged act or omission of their employees, agents, or subcontractors, relating to or in any way connected with the performance of the terms of this Agreement, unless the bodily injury, property damage or other claimed injury was actually caused by the willful misconduct, sole negligence, or active negligence of the party, its directors, officers, elected officials, employees, agents, authorized volunteers, or representatives. As part of the foregoing indemnity, each party agrees to protect and defend at its expense, including attorney's fees, each the other, its directors, officers, elected officials, employees, agents, authorized volunteers, or representatives, from any and all administrative or other legal actions based upon such actual or alleged acts or omissions. Each party hereby waives any and all rights it may have to any types of express or implied indemnity against the other, their directors, officers, elected officials, employees, agents, authorized volunteers, or representatives, with respect to third party claims relating to or in any way connected with the performance of the terms of this Agreement. SECTION 5.8. Attornevs' Fees. Except as otherwise required by Section 5.7 hereof, in the event oflitigation between the parties arising out ofthis Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and other costs and expenses incurred, including such fees and costs incurred on appeal, in addition to whatever otherreliefthe prevailing party may be entitled to. As used in the preceding sentence, the words "reasonable attorney's fees" in the case of the Agency, shall also include the salary and benefits payable to lawyers employed in the Office of the City Attorney of the City, who provide legal counsel to the Agency in such litigation as allocated on an hourly basis in addition to such other counsel as may be selected by the Agency under such circumstances. SECTION 5.9. Survival of Provisions. The provisions of the following sections of this Agreement shall survive the termination of this Agreement: (a) In the event that a termination of this Agreement may occur prior to the Close of the Site Transfer Escrow, the following provisions of this Agreement shall survive such termination: 60 P:\Agendas\Agenda Anachment<\Agenda AUachment.\AJ<enda Anachment.\Aomnts-Amend 2009\OS.OJ_09 Met" l-I,,,,.;n~ _ F;~.1 nn..,,~ CDC12009-39 (J) the Agency Note if executed by the Developer; (2) the Meta Housing Corporation Guaranty if the Initial Advance of the Agency Loan has occurred; (3) Section 5.5, Section 5.6, Section 5.7, Section 5.8 and Section 6.5. (b) In the event that a termination of this Agreement may occur after the Close of the Site Transfer Escrow, the following provisions of this Agreement shall serve such termination: (J) all of the Agency Loan Documents; (2) all of the instruments executed by the City and/or the Agency and the Developer as recorded upon the Close of the Site Transfer Escrow, including without limitation the Agency Regulatory Agreement; (3) all of the provisions of Article IV of this Agreement, Section 5.4, Section 5.5, Section 5.6, Section 5.7, Section 5.8, Section 6.5 and Section 6.8. ARTICLE VI MISCELLANEOUS SECTION 6.1. Governinl! Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. SECTION 6.2. No Joint Venture. Nothing in this Agreement shall be construed to constitute the creation of a partnership or joint venture between the Agency and the Developer or any contractor or other person relating to the Project or the Site. The Agency is not an agent orrepresentative ofthe Developer. This Agreement does not create a contractual relationship between the Agency and any such third-person and shall not be construed to benefit or bind the Agency in any way with or create any contractual duties by the Agency to any contractor, subcontractor, materialman, laborer, or any other person. SECTION 6.3. Notices. Notices, demands, and communications between Agency and Developer shall be sufficiently given if personally delivered or delivered by a nationally-recognized courier service or sent by registered or certified mail, postage prepaid, return receipt requested, to the following addresses: If to Agency: Redevelopment Agency of the City of San Bernardino Attention: Emil A. Marzullo, Interim Executive Director 201 North "E" Street, Suite 201 San Bernardino, CA 92401 61 CDC/2009-39 Ifto Developer: Magnolia Highland, L.P. 1640 Sepulveda Blvd., Suite 425 Los Angeles, CA 90025 Attention: John M. Huskey Any notice shall be deemed to have been received as of the earlier time of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing of such notice in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate in a writing. SECTION 6.4. Conflicts of Interest. No member, official, or employee of Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. SECTION 6.5. Nonliabilitv of Al!encv Officials and Emplovees. No member, official, employee, or consultant of Agency or City shall be personally liable to Developer, or any successor in interest of Developer, in the event of any default or breach by Agency or for any amount which may become due to Developer or to its successor, or on any obligations under the terms of this Agreement nor shall any such member, official, employee, or consultant of Agency or City have personal liability for payment of any amounts that may become due and payable by Agency to Developer under this Agreement. SECTION 6.6. Enforced Delav: Extension of Time of Performance. (a) In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to force majeure events beyond the control of such party, including, without limitation, war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, govemment imposed moratorium legislation, freight embargoes, lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor or supplier, that are not attributable to the fault of the party claiming an extension of time, that suspends the comment of construction of the Project, or, if after such construction is commenced, suspends the prosecution of the work of improvement of the Project. An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided, however, that the party claiming the existence of the delay first provides the other party with written notice of the occurrence of the delay, within ten (10) days of the commencement of such occurrence of a force majeure event and, thereafter, takes prompt and reasonable action within its control to restore, reconstruct, or rebuild any damage to the Project caused by such force majeure event and resume regular business operation. (b) The inability ofthe Developer to obtain the Construction Loan or later the Permanent Loan, or the failure ofthe City to provide any necessary approval relating to the development ofthe Project or the inability of the Developer to satisfy any other condition ofthis Agreement relating to the design, financing 62 ___h"u_"_ 'MM~_'_"\ ^nAn". A".~h~~n'o\"".,."'t<_"m~"~ 'OMIOR_m_flQ M",~ H"",in~. Final DDA.doc CDC/2009-39 or development of the Project on the Site, shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a forced delay under this Section 6.6. The parties each expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of either ofthem that provided a basis for entering into this Agreement occurring at any time after the execution of this Agreement, are not force majeure events and do not provide either party with grounds for asserting the existence of a forced delay in the performance of any covenant or undertaking arising under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in their economic assumptions could impose an inconvenience or hardship on the continued performance by such party under this Agreement and that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party ofits obligations under this Agreement. (c) The Developer acknowledges that the Agency is a "public entity" and/or a "public agency" as defined under applicable California law. Therefore, the Agency must satisfY the requirements of certain California statutes relating to the actions of public entities, including, without limitation, the California Enviromnental Quality Act ("CEQA"). Also, as a public body, the Agency's action in approving this Agreement may be subject to proceedings to invalidate this Agreement. The Developer hereby assumes the risk of delays and damages that may result to the Developer from any such third-party legal actions initiated within sixty (60) days following the Agency's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by the Agency is determined to have occurred. If a third-party files a legal action regarding the Agency's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the Agency may terminate this Agreement on sixty (60) days written notice to the Developer of the Agency's intent to terminate this Agreement, referencing this Section 6.6( c), without any further obligation to perform the terms ofthis Agreement and without any liability to the Developer resulting from such termination, unless the Developer unconditionally agrees to indemnify and defend the Agency against such third-party legal action, as provided herein. Within thirty (30) days after receipt of the Agency's notice of intent to terminate this Agreement, as provided in the preceding sentence, the Developer may offer to defend the Agency in the third-party legal action and pay all of the court costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. Any such offer from the Developer must be in writing and in a form reasonably acceptable to the Agency and must demonstrate pursuant to acceptable evidence as shall be determined by the Agency that the Developer has the ability to perform as represented in such offer to defend. SECTION 6.7. Modifications. Any 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. SECTION 6.8. Revresentations and Warranties of Develover. The Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution ofthis Agreement by the Agency has been made in material reliance by the Agency on such covenants, representations and warranties: 63 CDC/2009-39 (I) The Developer is a duly orgaoized aod validly existing California limited partnership corporation. The Developer has the legal right, power aod authority to enter into this Agreement aod the instruments aod documents referenced herein aod to consummate the traosactions contemplated hereby. The persons executing this Agreement aod the instruments referenced herein on behalf of the Developer hereby represent aod warraot that such persons have the power, right aod authority to bind the Developer. (2) The Developer has taken all requisite action and obtained all reqUIsIte consents in connection with entering into this Agreement aod the instrmnents aod docUlllents referenced herein aod the consUlllmation of the traosactions contemplated hereby, aod no consent of aoy other party is required. (3) This Agreement is, aod all agreements, instruments aod docUlllents to be executed by the Developer pursuaot to this Agreement shall be, duly executed by and are or shall be valid aod legally binding upon the Developer aod enforceable in accordaoce with their respective terms. (4) Neither the execution of this Agreement nor the consUlllmation of the traosactions contemplated hereby shall result in a breach of or constitute a default under aoy other agreement, document, instrument or other obligation to which the Developer is a party or by which the Developer may be bound, or under law, statute, ordinaoce, rule, governmental regulation or any writ, injunction, order or decree of aoy court or governmental body applicable to the Developer or to the Site. All representations aod warraoties contained in this Section 6.8 are true aod correct on the Effective Date aod on the Closing ofthe Site Transfer Escrow, the closing ofthe Construction Loao Escrow aod the closing of the Permaoent Loao Escrow, aod Developer's liability for misrepresentation or breach of warraoty, representation or covenaot, wherever contained in this Agreement, shall survive the execution aod delivery of this Agreement aod the close of each such escrow as referred in the preceding sentence. SECTION 6.9. Representations and Warranties of the Al!encv. The Agency hereby makes the following representations, covenaots aod warraoties aod acknowledges that the execution of this Agreement by the Developer has been made aod the acquisition by the Developer of the Site will have been made in material reliaoce by the Developer on such covenaots, representations and warranties: (I) Each and every undertaking aod obligation of the Agency under this Agreement shall be performed by the Agency timely when due; aod that all representations and warraoties of the Agency under this Agreement aod its exhibits shall be true in all material respects as of the Effective Date. (2) The Agency is a community redevelopment agency, duly formed aod operating under the laws of California. The Agency has the legal power, right and authority to enter into this Agreement aod to execute the instruments aod docUlllents referenced herein, aod to conSUlllmate the transactions contemplated hereby. 64 CDC/2009-39 (3) The Agency has taken official action to approve this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby. (4) The persons executing any instruments for or on behalf ofthe Agency have been authorized to act on behalf ofthe Agency and that this Agreement is valid and enforceable against the Agency in accordance with its terms and each instrument to be executed by the Agency pursuant hereto or in connection therewith will, when executed, be valid and enforceable against the Agency in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by the Agency. If the Agency becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by the Agency under this Agreement, whether as of the date given or any time thereafter through the Closing and whether or not such representation or warranty was based upon the Agency's knowledge and/or belief as of a certain date, the Agency will give immediate written notice of such changed fact or circumstance to the Developer, but such notice shall not release the Agency of its liabilities or obligations with respect thereto. All representations and warranties contained in this Section 6.9(a) are true and correct on the date hereof and on the Closing Date and the Agency's liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery ofthis Agreement and the Close of Escrow. SECTION 6.10. Bindinl! Effect of Al!reement. This Agreement shall be binding upon and shall inure to the benefit ofthe parties hereto, their legal representatives, successors, and assigns. SECTION 6.11. Assurances to Act in Good Faith. Agency and Developer agree to execute all documents and instruments and to take all action and shall use their best efforts to accomplish the purposes of this Agreement. Agency and Developer shall each diligently and in good faith pursue the satisfaction of any conditions or contingencies subject to their approval. SECTION 6.12. Severability. Wherever possible, each provision ofthis 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. III III III 65 _._ ...__L_____' A___"_ '~^^~_"~'"\'n._h A_6rt~ ~MQ\I\R_I\.U\O ...,.,.I-I~"<;no _ F;n"1 nnA rlnc CDC/2009-39 1// 1// /1/ IN WITNESS WHEREOF the Agency and Developer have each executed this Agreement as of the date first written above. AGENCY r;JldlfY Redevelopment Agency of the City of San Bernardino ~) Date: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: ~ /:r;i# Agenc 0 sel DEVELOPER Executed this _ day of ,2009 Magnolia Highland, L.P., a California limited partnership By: Magnolia Highland, LLC, a California limited liability company Its: . trative Gvartner skey, Manager By: By: estern Community Housing, Inc., a California non-profit public benefit Corporation Its: Managing General Partner By: Leanne Truofreh, Secretary 66 P \Ag"n':"\..\i!e.1La A'lad"IL~"I,"'A"""J,, '\tlaCIl",'''''''.Agc''da '\llachments\AgrJ1lts_Amel1d 200<)\OS-UJ.()~ Meta Housing. ri",,1 IlDAdoc CDC/2009-39 III III III IN WITNESS WHEREOF the Agency and Developer have each executed this Agreement as of the date first written above. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: Agency Counsel DEVELOPER Executed this _ day of ,2009 Magnolia Highland, L.P., a California limited partnership By: Magnolia Highland, LLC, a California limited liability company Its: Administrative General Partner By: John M. Huskey, Manager By: Western Community Housing, Inc., a California non-profit public benefit Corporation Its: Managing General Partner By: ~ Leanne Truofreh, Secret 66 ~ \.''.gr"d'''''-~g''nd,' .\lWc;,m~n\>"'..\gc"da Attadunems\..\gemla Alt"c"",elll,'.Agrll,',.Amc"d 2:)()'Y..()~.Ol.(I.) \lo" IIClu<,,~ - Final DDA.dQC CDC/2009-39 Attachment No. lA Legal Description of the Property (from Developer Acquisition Escrow Assignment Agreement) 67 p-\an~"A..\ A".~A. .".rhmnn"\A~.,,A. Att.rkm~n,,\Ao~~A. At"chm~~,,\Aa'm,,_Am~"'! ?fl(lQ\()~_m_nQ MM, Hm";M _ F;~.I nnA An" CDC/2009-39 ATTACHMENTNO.IA LEGAL DESCRIPTION j Real property In the City of San Bernardino, County of San Bernardino, Slate of Califomja, desalbed as follows: PARCEL NO. 1 THE NORTH 199.75 FEET OF THE EAST 171.25 FEET OF LOT 1 OF MOUNT VERNON ORANGE GROVE AND FRUIT COMPANY LANDS, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CAUFORNIA,.AS PER PLAT RECORDED IN BOOK 12 OF MAPS, PAGE (5) 16, REcoRbS OF SAIO COUNTY. AREAS AND DISTANCES OF THE ABOVE DESCRIBED PROPERlY ARE COMPUTED TO THE ceNTER UNe; OF ALL ADJOINING STREETS AND ROADS. PARCEL NO.2 AN EAS~MENT FOR INGRESS AND EGRESS APPURTENANT TO AND FOR THE BENEm OF PARCEL NO.1 HEREINABOVE DESCRIBEP, OVER THE SOUTH 15 FErr TO TH~ NORTH 214.75 FEET TO TH~ EAST 171.25 FEET OF LOT 1 OF MOUNT VERNON ORANGE GROVE AND FRUIT COMPANY LANDS, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE of CAUFORNIA, AS PER PLAT RECORDED IN BOOK 12 OF MAPS, PAGE (S) 16, RECORDS OF . SAID COUNTY. AREAS AND DISTANCES OF THE AllOVE DESCRIBED PROPERlY ARE COMPUTED TO "tHE CENTER UNES OF ALL ADJOINING STREETS AND ROADS. EXCEPT MINERALS AND OIL, GAS AND OTHER HYDROCARBON SUBSTANCES UND~ SAID LAND BELOW A DEPTH OF 500 Fm WITHOUT THE RIGHT OF SURFACE ENTRY, AS RESERVED BY ATLANTIC RICHFIELD COMPANY BY DE~ ~CORDED OCroBER 28, 1977, AND DEEDED TO CORN~RSTONE OIL COMPANY, A CALIFORNIA CORPORATION, RECORDED D~C~MBER 13, 1995, INSTRUMENT NO. 95-426808, OFFICIAL RECORDS. APN: 0143-191-38-0-000 ..i CDC/2009- 39 ATTACHMENTNO.IA LEGAL DESCRIPTION ! Real property In the aty of san Bernardino, County of san Bernardino, Slate of California, described as follows: ALL THAT PORTION OF LOT 1, MT. VERNON ORANGE GROVE AND FRUIT COMPANY LANDS, IN THE COUNTY OF SAN BERNARDINO, stATE OF CAUI'oRNIA, AS PER MAP RECORDED IN BOOK 12 PAGE 16 OF MAPS, IN .THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, lYING NORTH OF THE NORTH liNE OF THE LAND DESCRIBED IN THE DEED TO THE STATE OF CAliFORNIA, RECORDED MAY 3, 1961 IN BOOK 5420 PAGE 6 OF OFFICJAl RECORDS,IN THE OFFICE OF TliE COUNTY RECORDER OF SAID COUNTY. EXCoPT TliE WOST 320.00 !'EET THEREOFF. AlSO EXCEPT THE NORTH 199.75 I'EET OF THE EAST 171.25 FEET THEREOF. AREAs AND DISTANCES HEREIN DESCRIBED ARE MEASURED FROM THE CENTER UNE OF ADJOINING STROttS AS SHOWN ON SAID MAP. APN: 0143-191-46-0-000 I 2 CDC/2009-39 ATTACHMENT NO. lA I (LEGAL DESCRIPTION) THOSE I'ORTIONS OF LOTS 1 AND 2 OF MOUNT VERNON ORANGE GROVE FRUIT COMPANY LAND, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STAlE OF CAUFORNIA, AS PER PLAT RECORDED IN BOOK 12 OF MAPS, PAGE 16, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING ON THE EAST L1NE OF SAID LOT 1, DISTANT ALONG SAID EAST UNE, BEING ALSO THE WEST UNE OF MUSCOTT STREET; AS SHOWN ON SAID MAP, SOUTH D. 22' 44" EAST 173.94 FEET FROM A TWD-INOi IRON PIPE MARKING THE NOR1liEAST CORNER OF SAID LOT 1; THENCE SOUTH 78. 26' 40" WEST 291.04 FEET TO THE EAST UNE OF THE WEST 320 FEET OF SAID LOTS 1 AND 2; THENCE ALONG LAST SAID EAST UNE SOUTH D. 23' 03" EAST 43B.OB FEET TO THE SOUTH L1NE OF SAID LOT 2; THENCE ALONG SAID SOUTH UNE NORTH 89. 54' OS" EAST 70.4B FEET TO THE SoUTHWEST CORNER OF THE EAST 215 FEET OF SAID LOT 2; THENCE ALONG THE WEST UNE OF SAID EAST 215 FEET NORTH O. 22' 44" WEST 190.00 FEET TO THE NORTHWEST CORNER OF THE SOUTH 190 FEET OF SAID EAST 215 FEET OF LoT 2; THENCE ALONG THE .NORTH UNE OF SAID SOUTH 190 FEET, NORTH 8go 54' 05" EAST 215.00 FEET TO THE EAST UNE OF SAID LOT 2; THENCE ALONG SAID EAST UNE OF LOT 2, AND SAID EAST UNE OF LOT 1, NORTH D. 22' 44" WEST 305.89 FEET TO THE POINT OF BEGINNING. EXCEP11NG lHEREFROM THE WESTERLY 5 FEET. APN: 0143-191-63~0-000 ,./ 3 CDC/2009-39 Attachment No. IB Copy of Tentative Parcel Map No. 19200 68 P:\Agendas\Agcnda Altachmenls\A~enda Altachments\A~enda Attachment,\A~rmt<_Amenrl )nnQ\()~_m_nQ M..., Hn...'"" _ ~:".I nn A "M CDC12009-39 ATTACHMENT NO. 1B TENTA TIVE PARCEL MAP No. 19200 CITY OF SAN BERNARDINO .~ PIltUn::T ....OAU..'IICltoI. T. COIIfl;lUIl"D'tAL:" \lAl(f/If'--., J/I./fII 2. DCIS1IlIG_IS_'Dll:O'TFllR__T~ 1S,,[lII1IOG~~ ",. ~ lI~JY~....:s: ,~- .... - -~- -- l;Il'I'OI"llltI--.o C1JYOfSAN_ __1[II1I[JIl. -~- ~GA5CCl11PMT -- 1"'~'JIf (101)....5020 (_l__7m (100)......,23 1_)_27_noo (_)122_0204 ! IUCllIIOfT- ~- ......- - 1O"THsT1'lEH VICINTY MAP N.1S '-15.or_T-or-....Ill.tMGM~TO<<OFlIl:>CNIOA-..: ..a.uoooG..~a1T_QFF..r_awIPOllIlIllS~ lOKDmlCAItDFllR-...cust lIltOPOSEOlJStlS_....IWII15. . 110 1llEES0001-..clUll[liOll.I[DCO"..flCASTCOIIN(R. 1lO~U1l.t1YL..a0ll... (1IS_.~ZOfi:l:CO/~....oma:. .. MtAlSlIOt~TOP\.OCDC0ll$1llIW"'1[IIlMIlP\.Ol[ 27/!!iJZ; ~.::_.~- ~-... ~ M__ .30-- '_.~ l/lll- . .- ...... I____.,~._ _mh.,--:::4) ,..... _n _r"-:". . ~~; LEGALDESCRIPTlQIIJ APORTlONO''''' VERNONO~ANGEGIIOVE&""UITCO.WlOS "'''.''''1 """,,"'0,",.111.3'.1&63 lEX'.TING""NGAESSlEORESSEASE..E>ftI",,".I'(;I.ToeEOlJITCL.O'M.OI 2 ElOST1NG1.'SEWEA"'SE"E"'-I"".n~.G3"o.A.Jr08EOlJncl.AlOlEO) , ..tSTONG'NAO'O'OE........EN'IDOCNO.'I>,I."...""..."_A.ToeeQUITClAI..W) . EJ(JSTIIIIG'rrSEWEAEMI....NT{""3720,P'G'5OliOA.10A.""'''J 'CO</SlAUC':WfWl.CURBRETURNWIM>>._ CONSTRUCTDFlIYEWAV......ROJ.CHPERCrTYSTV(W.25') '....OPOSEO.,..O.OlCA'T1ONF""..GHlANOAVENU.>J.Ot<GPROJECTFRO"'"""" I CONsrRUC'tCUR.....OGLJ'1"TERPER CITY.ro (. '....1 lEGAlOwNER:APNII014:J-19146 "GlI;I.ONQIE.o,CH,u.c 006._8v.STREETO'3O, lOSAHGe,eS,CA-goo14 SOILSENGINFFR' OEOCOI<lNL-OHl.....,RE,INC 33OON,_'E"NANoo,,\IO S"IT.100 .. "UR.......CA-i'504 11'1)..,.13IIl 11'"1"'_"""''''' LEAAl nWNER'.&.PNII014:J-191_J8 EUASC.JoNT'OI,JN J.<GII'lOUVCfRCLEORI'Il; ..oHl.AHD,C-092308 , , i ~ lEGAlOWNRl-.&.PNllo14:J-191..(lJ NAROLDMJRSH!IlJR\II\IORS <21N,""NSTREET SA.TA.........CAomm SUBOIVIDFR' 'E'M'OUSI<IGCOOP. lMOS,SEP....VEO'O.l\itlU25 lOSA"""IiS.CA-lIOC2! {3'.I~ pto!",r.3'l6J''''' "-- - PREPARFDRy,jIJNF22009 SW<::tC''IlJ.ENGI<EERINO mOE.G\RRYAVE.SUITEI12 SANl"AAN.o.,CAt27Il\I ~~lru"52 1..~llS2_~F"" . ,,'.. U.-,..'''''' ., CDC/2009-39 Attachment No.2 Scope of Development 69 InA~An~..\A_~A. &".""~~n"\"'n~~~> At"e"m"""\""~n~. A...^"",.~,,\A~'m,,_Am~~A '~n<l\n~_,n_M M....l-I""';M_ I';nol nn.\. n~~ CDC/2009-39 Attachment No.2 Scope of Development The Development consists of three parcels that total approximately 3.4 acres that will be combined and subdivided into two parcels. The smaller parcel will be approximately I acre with frontage on Medical Center Drive and will remain vacant and owned by the Agency. The second larger parcel will be approximately 2.4 acres at the southwest comer of Highland A venue and Medical Center Drive, and will accommodate the construction of a 3-story senior housing complex with approximately 87,000 square feet of floor area including enhanced landscaping treatments and significant tenant amenities throughout the development. There will be 3 separate plans offered for the dwelling units within the Development. The first is a one-bedroom unit of approximately 589 square feet with a patio or balcony and the two other plans consist of 2-bedroom units of approximately 828 square feet and 971 square feet, also with patios or balconies. A lobby area, community room with a kitchen, fitness room, business center/computer room and management offices are planned on the first floor. Laundry rooms and auxiliary storage areas are planned on each floor. The exterior of the facility will be enhanced by an outdoor patio area with shade trees, a fountain, barbeque grills, a swimming pool and adequate areas for relaxed seating. A walking path around the perimeter of the building will allow residents the opportunity for exercise while at the same time providing them with a sense of security as the path will be within a decorative 6-foot wrought iron fence that surrounds the Development. Adequate parking will also be provided with 97 standard parking spaces and four handicapped parking spaces. All resident parking will be secured to address safety concerns. Additional on-site security measures will include exterior and interior lighting, security cameras and a 24-hour monitoring service. Overall, the proposed building design features prominent contemporary architecture with varied roof lines, window treatments and awnings, a patio trellis, and complementary finish materials in varied earth tones. The floor plan is open and convenient, with two elevators, laundry facilities on each floor, as well as easily accessible trash shoots on each floor. CDC/2009-39 Attachment No.3 Schedule of Performance 70 CDC/2009- 39 Attachment No.3 SCHEDULE OF PERFORMANCE Section I. Conditions Required for Execution of DDA aud Ageucy Acquisition Escrow Review and Approval- environmental No later than twenty-one (21) days before the assessment of Developer Investigations. closing of Agency Acquisition Escrow. DDA Section 2.3(a)(i) Review and Approval- final appraisal to No later than fourteen (14) days before the Proiect site. closing of Agency Acquisition Escrow. DDA Section 2.3 Submission - Final executed copv of the No later than fourteen (14) days before the TCAC application with all applicable effective date of the DDA. attachments and exhibits. DDA Section 2.20 Submission - Final escrow instructions No later than thirty (30) days before the close of between Developer and Proiect site owners. Agency Acquisition Escrow. DDA Section 2.3(a)(ii) Review and Approval - Confirmation of No later than the close of the Agency Developer Assignment of Licenses. Permits Acquisition Escrow. and Contracts. DDA Section 2.8(f)(iii) Section II. Conditions Required for Title Transfer to Developer - Site Transfer Escrow Submission - Permits. Licenses. & Aoorovals. No later than thirty (30) days before close of DDA Section 2.3(iv) Site Transfer Escrow. Submission - Construction Loan Documents. No later than forty-five (45) days before close DDA Section 2.19 of Site Transfer Escrow. Review and Approval - Construction Loan No later than thirty (30) days before close of Documents. Site Transfer Escrow. DDA Section 2.19 Submission - Updated Proiect Pro Forma. No later than forty-five (45) days before close DDA Section 2. I 5(iv) of Site Transfer Escrow. I CDC12009-39 Submission - Construction Budget. No later than forty-five (45) days before close DDA Section2.15(iv) of Site Transfer Escrow. Review and Approval - Construction Budget. No later than thirty (30) days before close of DDA Section 2.15 (iv) Site Transfer Escrow. Submission - design drawings at 60% phase of No later than sixty (60) days before close of completion. Site Transfer Escrow. DDA Section 3.2(b) Review and Approval - design drawings at No later than thirty (30) days before close of 60% phase of completion. Site Transfer Escrow. DDA Section 3.2(b) Submission - TCAC reservation letter for low- No later than forty-five (45) days before close income housing tax credits. of Site Transfer Escrow. DDA Section 2.l5(v) Submission - preliminary escrow closing No later than fourteen (14) days before close of statement from escrow agent. Site Transfer Escrow. DDA Section 2.15 (ii) Review and Approval- Notice of Agreement Upon close of Site Transfer Escrow. recorded in the Office of the Countv Recorder. DDA Section 1.7 Review and Approval- Developer's Job No later than sixty (60) days prior to the close Employment Outreach Program. of Site Transfer Escrow. DDA Section 3.3 Submission - Final Agencv loan documents to No later than sixty (60) days before close of complete Site Transfer Escrow Site Transfer Escrow. DDA Section 2.3(vi) Review and Approval - Final Agencv loan documents to complete Site Transfer Escrow. No later than thirty (30) days before close of DDA Section 2.3(vi) Site Transfer Escrow. Proiect Meetings- Developer shall meet with No later than twenty-one (21) days after close Agencv contract compliance officer. of Agency Acquisition Escrow. DDA Section 2.3 2 CDC/2009.39 Construction Sign- Developer shall cause to be No later than the start of construction. erected on the Site a construction sign describing the development and the participants in accordance with Agencv specifications. DDA Section 2.3(a)(xvii) Commencement of Construction. Within thirty (30) days after issuance of the DDA Section 2.3(a)(xvii) Notice to Proceed. Section III. Conditions Required for the Close of the Project Certificate of Completion - Developer to Within eighteen months after the request Certificate of Completion from the commencement of construction of the Agencv. Improvements. DDA Section 3.11 Final Inspection - Agencv shall conduct a final Within fifteen (15) days after request by the inspection of all improvements. Developer and as a condition of Agency's DDA Section2.3(a)(xvii) issuance of the Certificate of Completion.. Submission - Audit of Total Proiect Costs. No less than sixty (60) days prior to the Developer shall submit a certified breakdown Developer's submission of a request for a of all Proiect related costs. Certificate of Completion from the Agency. DDA Section 2.25; 3.11 Audit Approval. Agencv shall approve or Within sixty (60) days after receipt of the audit disapprove the certified audit of construction by Agency. costs. DDA Section2.25; 3.II(b) Issuance of Agencv Certificate of Completion. Within thirty (30) days after receipt by Agency Agency to issue in recordable form the of the Developer's written request, provided all Certificate of Completion requirements for issuance have been satisfied. DDA Section 3.11 Completion ofProiect. Upon recordation ofthe Certificate of DDA Section 3.11 (e) Completion against the Project Site by the Agency. 3 CDC/2009-39 Attachment No.4 Developer Project Pro Forma 71 n.\ A ___~__\. ___"_ '~M~_.~'.\ .~."A. '''O"~~Q"'.\ .n~"A. A"__~~A~,.\A~~.._ A~.~A 'MO\M_M-"O U... U~m;~~ ";n.' nn.. ~~ CDC/2009-39 Meta Housing - Magnolia at Highland, LP Project Budget - Sources and Uses of Project Funds June 3, 2009 Use of Project Funds Source of Project Funds Tax Credit First Percentage ~ Eauitv Mortea2e DeveloDer Total of Total land Cost 2,450,000 2,450,000 13.96% Title/Escrow/Legal 27,605 27,605 0.16% Demolition 225,000 225,000 1.2.8% Total Land Acquisition $ 2,477,605 $ 225,000 $ 2,702,605 15.40% Site Work 300,000 300,000 1.71% Structures 4,690,982 2,659,018 7,350,000 41.88% General Requirements 411,600 411,600 2.35% Contractor Overhead 308,700 308,700 1.76% Contractor Profit 308,700 308,700 1.76% Gener<llliabiity Insurance 130,185 130,185 0.74% Total Direct Construction $ $ 6,150,167 $ 2,659,018 $ 8,809,185 50.20% Architectural Design 275,000 275,000 550,000 3.13% Engineering 225,000 50,000 275,000 1.57% TotaIA&E $ 500,000 $ 325,000 $ 825,000 4.70% Construction Loan Interest 402,064 402,064 2.29% Origination Fee 97,500 97,500 0.56% Credit Enhancement App. Fee 20,000 20,000 0,11% Predevelopment Loan Origination Fee 20,000 20.000 0,11% Predevelopment Loan Interest 50,000 50,000 0.28% Insurance 110,115 110,115 0.63% Title and Recording 25,000 25,000 0.14% Total Construction Interest/Fees $ 724,679 $ 724,679 4.13% Origination Fee 29,168 29,168 017% Credit Enhancement App. F.. 15,000 15,000 0.09% Title and Recording 15,000 15,000 0.09% Total Permanent Financing Costs $ 59,168 $ 59,168 0.34% Lender Legal Paid by Developer 40,000 40,000 0.23% Partnership Legal 100,000 100,000 0.57% InvsetorDue Dilligence Legal 40,000 40,000 0.23% Accounting and Organizational 135,000 135,000 0.77% Total Legal Fees $ 315,000 $ 315,000 1.79% 3~month Operating Reserve 128,592 128,592 0.73% Appraisals 10,000 10,000 0,06% Construction Contingency 440,459 440,459 2.51% Total Contingency Costs $ 10,000 $ 440,459 $ 128,592 $ 579,051 3.30% TCAC Application/Monitoring Fees 95,000 95,000 0.54% Reproduction 15,000 10,000 25,000 0.14% Development Impact Fees 752,395 351,784 1,104,179 6,29% Permit Processing Fees 100,000 100,000 0.57% Marketing and Start-up 70,000 70,000 0.40% Furnishings 100,000 100,000 0.57% Studies/Surveys 50,000 10,000 60,000 0.34% Contingency 144,423 144,423 0.82% Total Other Costs $ 1,012,395 $ 616,207 $ 70,000 $ 1,698,602 9.68% Developer Overhead and Profit 1,824,686 11,275 1,835,961 10,46% Total Developer Overhead and Profit $ 1,824,686 $ 11,275 $ 1,835,961 10.46% Total Development Costs $ 4,000,000 $ 10,621,198 $ 2,916,778 $ 11,275 $ 17,549,251 100.00% CDC/2009-39 A TT ACHMENT NO, 4 G. Income Information (BREAK OUT UNIT SIZES BY VARYING AFFORDABILlTY LEVELS) Low-Income Units 1 6 349 2,092 25.76 374 30% I 8 473 3,788 25.76 499 40% 1 34 598 20,340 25.76 624 50% I 20 695 13,905 25.76 721 60% 2 2 417 834 31.93 449 30% 2 566 31.93 598 40% 2 6 716 4,296 31.93 748 50% 2 3 866 2,597 31.93 898 60% Total # Units 79 Total S 47,851 Manage,s' Units 2 I 898 898 . - - - - - - - Total # Units 1 Total S 898 Market Rate Units - - - . . - - - - - - - - . - - Total # Units - Total S - AGGREGATE MONTHLY RENTS FOR ~ UNITS s 48,749 x 12 AGGREGATE ANNUAL RENTS FOR ~ UNITS (column d): s 584,989 California Tax Credit Allocation Committee Low-Income Housing Tax Credit Application Rev. February 1, 2006 CDC/2009-39 ATTACHMENT NO.4 I. Annual Residential Operating Expense, (Reg. Section 10327(1)) General Administrative Adverti,ing $ 6,000 Legal $ 4,000 Accounting/Audit $ 6,000 Security $ 4,000 Other (General Admin.) $ 18,000 Total GeneralAtlministrat;ve $ 38,000 Manallement Fee 6% $ 33,727 Utilities Electricity $ 18,000 Gas $ 5,000 Total Utilities $ 23,000 Total WaterlSnPer $ 22,000 PavrolllPavroll Taxes On-site Manager $ 27,500 Manager's Unit 10,771 Assistant Manager Maintenance PersOIUleI $ 27,500 Payroll Taxes/Benefits $ 10,000 Tolal PayrolVPayroU Taxes $ 75,771 Total Insurance $ 10,000 Maintenance Painting $ 9,000 Repairs $ 9,000 Trash Removal $ 6,000 Exterminating $ 2,500 Grounds $ 4,000 Elevator $ 5,000 Other (Fire Sprinkler/Alarm Service) $ 2,500 Total MaUtJenance $ 38,000 Other (specifY) Monito~ Fee $ 3,600 $ Total Other $ 3,600 ANNUAL RESIDENTIAL OPERATING EXPENSES $ 244,099 NUMBER OF UNITS IN PROJECT 80 ANNUAL OPERA11NG EXPENSES PER UNIT (divide 'j") $ 3,051 TOTAL 3-MON11f OPERA11NG RESERVE (Reg. SectWn I0327(c)(8)(C) $ 128,592 TOTAL SERVICE AMENITIES BUDGET $ 10,000 TOTAL RESERVE FOR REPLACEMENT $ 20,000 TOTAL REAL ESTATE TAXES $ 1,500 TOTAL ANNUAL OPERATING EXPENSES $ 275,599 . "' ...... j,~ ..,,---.:-- /"'_--;..~~ .... o z ,.. z ... ~ == u < ,.. ,.. < ~ ~ ~I M 5 M' ,. N ~ NI ~ -I z 51 ti ~ .. ~ .. .. ~ 15 .. ~ '" ~ "~ ~ ~~~ r;:;~~ -..ci 0-," \l)" N M ~ ~ ~ ~ ::'::1 ,. :!~~ <ot N "'. ..00-.'" ~ ;c M "~ ~ ~~M ~M~ ~o~ -..cio-.".; ~ ~ ~ ~ N 5~ ,. ~~~ ~ ~ ~ ~ M .......OO\l). ~ ~ ~ ~ 5 ::1 ,. ~N~ ~~!;! Ol'.,oor--" ~ ~ ~ ~ o 521 ,. _N~ ~ ~ ~ M 00001; M M ~ ~ ~ 5 ~, ,. ~:Sf: ~ - ~ NooO i=:: ~ ~ 5001 ,. ~~~ ~~~ ,.,,0-"'1. .,.,...... M $ g ~ ~ ......1 ~ M o~o ~~N oo'r-:-..ci ~ ~ ~ ~ ~ C \01 ,. _ M ~ ~~~ _....... 0{ :l5 :g ~ 5 Vl! ,. ~~~ ;::::':;;M .,.i.......... ;\ ~ ~~iS ~.~ l'"1 ~~~ N M ~ ~ iil~:8 "4'....... . _ N ~ ~ :!:s ~~~ ~~ @" &;~g; ~~~ ~.\O (;." ~ ~ . ii " .. 'tf!. ~~~ ~ :I ~ ~ ~ .. 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V"~ ~ ~ v. M ri ~ ~ _MNNN_ MOOO~~O~O~~~08 ~~~M___~~CC~N'" ..,.MM.....MMN~_....._I'-M ~66~~o-"~ N"'<t"N~""-O"O 1'1__ _N ?i N ~ ~ 88888~88~~O~88~888~8~8~88 ~~~~~~~~~~ ~~~~~~~N~N~""-~~ ~~#~~~#~~~~t~~#~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~ !!;j ~ i I;; z .., i'i "' I~ ~htL s ~Jj ~d ..~ ~ 'eU ~~:;:~~l ~ F='Oij~5 !>IlEa = i~~~~~~.i~~8 ~~i;~~~,~<~ E~'i....~.~~.~_...~~J~II~ ~~~~5~~~8~~~8g~~i~S~o~~~9 ~ ~ N M M ~ ~ M M ~ ~ M ~ ~ ~ " :;; ~ 8i M :;: N o ~ M ~ o ~ ~ M ~ ~ M ~ ~ ~ ~ 8 ~ ;1; ~ o ~ M ~ ~ ~ ~ ~ M ~ o N M M ~ M 8 M ~ ~ ~ M ~ N N N ~ ;! N ~ ~ ~ ~ N r2 ~ ~ '" ~ "' ~ :;; :;; M ~ ~ ~ ~ ~ M M o ~ M ~ ~ ~ M is M ~ M M N <> M M M ~ M ~ ~ N M .. M N M o ~ ~ ~ M ~ ~ N M N ~ N ~ iii o 8 N o M ~ N ~ ~ ~ N ~ ~ ~ ~ ~ N ~ ~ ~ N !!;j 8 i!i i '" ~ ~ ~ ~ ~ .; M N ~ gv: !J ~ ~ .; M N ~~ ~ ~ ~ ~" M N ~ ~ ~ ~ .; M N M~ ;J . ~ o ;: ~ .; M N ~~ 8 ~ ~ .; M N NO ~ ~. ~ ~ ;:: ~ ~" M N ~ ~ ~"'1 ~ ~ ~ ~ .; M N O~ ;"'1 ~ ~ ~ ~ .; M N ~M b"'1 ~ ~ " ~ ~ .; M N ~ ~ "'1 M ~ ~ ~ ~" M N o~ ~ ~ ~ ~ ~ .; M N ~ ~ M ~ ~ ~ .; M N M ~ ~'"1 ~ ~ ~ ~ ~" ~ !~ N ~ ~ ~ .; ~ ~O ~'"1 ~ ~ ~ ~ ~ ~ iJi 158 00! ~ t g8 oZ ." l< CDC/2009-39 Attachment No.5 Developer Acquisition Escrow Assignment Agreement ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT THIS ASSIGNMENT AND ASSUMPTION OF REAL AGREEMENT (the "Assignment Agreement") is made as of Meta Housing Corporation (the "Assignor") and the "Assignee"), with reference to the following: PROPERTY PURCHASE , 2009, by and between (the RECITALS A. WHEREAS, on , Assignor, as purchaser, and , as seller (the "Seller"), entered into that certain Standard Offer, Agreement, and Escrow Instructions for Purchase of Real Estate (the "Purchase Agreement") for the purchase of certain property described therein located in the City of , County of San Bernardino, State of California more particularly described on attached Exhibit "A," incorporated in this Assignment Agreement (the "Property"); B. WHEREAS a copy of the Purchase Agreement is attached hereto as Exhibit "B;" C. Agreement, WHEREAS, in order to conduct the sale of the Property pursuant to the Purchase Assignor and Seller have opened Escrow No. (the "Escrow") at (the "Escrow Holder"); D. WHEREAS Assignor and Seller have executed those certain Escrow Instructions attached hereto as Exhibit "C" (the "Escrow Instructions"); E. WHEREAS, in connection with the Purchase Agreement and Escrow Instructions, Assignor has deposited the sum of$_ in Escrow (the "Deposit"); F. WHEREAS Assignor desires to assign to Assignee and Assignee is willing, on certain conditions, to assume all rights and obligations of Assignee under the Purchase Agreement and Escrow Instructions. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are acknowledged, the parties agree as follows: Assignment and Assumption. Assignor hereby assigns to Assignee all of Assignor's right, title and interest under the Purchase Agreement and Escrow Instructions, including, without limitation, all right, title and interest in and to the Deposit (the "Assignment"). Assignee assumes and agrees to perform and observe all of the obligations and covenants of Assignor in the Purchase Agreement and Escrow Instructions to be performed on or after the date hereof. Re imbur semen t 0 f Depo sit. As ofthe date hereof, Assignee shall reimburse to Assignor, in immediately available funds, a sum equal to the Deposit. 72 CDC/2009-39 Representations and Warranties. Assignor represents and warrants to Assignee as follows: The Purchase Agreement attached hereto is a true and complete copy of the Purchase Agreement and the Purchase Agreement has not been otherwise amended, modified or supplemented in any respect except as set forth in the Escrow Instructions. The Purchase Agreement (as supplemented and amended by the Escrow Instructions) represents the entire agreement between Assignor and Seller with respect to the Property. The Escrow Instructions are a true and complete set of Escrow Instructions as of the date hereof. Assignor is the holder of the entire buyer's interest under the Purchase Agreement. Assignor has not assigned, hypothecated or otherwise transferred all or any portion of its interest in the Purchase Agreement. Successors and Assigns. This Assignment Agreement shall be binding upon and shall inure to the benefit of Assignor and Assignee and their respective successors and assigns. Go ve rn i n g Law. This Assignment Agreement shall be governed and construed in accordance with California Law. [Signatures on following page.] 73 n.,. ___"..,. ___"" .~^^c_.~..\ h~R.' "."~C_.R'O\ 'n~n.. ...._C_Qn.<\ 'n~" ._~~. ~M"\t\O ~, M u... Un"O;M '''~.' nn, .M CDC/2009-39 IN WITNESS WHEREOF, the parties have executed this Assignment Agreement as ofthe date first set forth above. "Assignor" By: Name: Title: I1Assigneell By: Name: Title: 74 CDC/2009-39 SCHEDULE OF EXHIBITS EXHIBIT DESCRIPTION "A" Legal Description of Property Purchase Agreement Escrow Instructions "B" "e" 75 CDC12009-39 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY EXHIBIT "A" Page I of 1 P:\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agnnts-Amend 2009\08-03-09 Meta Housing. Final DDAdoc CDC/2009-39 EXHIBIT "B" PURCHASE AGREEMENT [TO BE INSERTED] EXHIBIT "B" Page 1 of 1 P :lAgendas\Agenda AttachmentslAgenda AttachmentSlAgood. Attoohm,""lAgnn"-Am,"d 2009\08-03-09 M,t. Housing. Final DDAdoc CDC/2009-39 EXHIBIT "C" ESCROW INSTRUCTIONS [TO BE INSERTED] EXHIBIT "C" Page I of 1 P:\Agendas\Agenda Attachments\Agenda AttachmentSlAge"da Attaehme"~lAgnnts-Ame,,d 2009\08-03-09 Meta Housing. Final DDA.doc CDC/2009-39 A TT ACHMENT NO.4 B. Permanent Financing List Below AU Projected Sources Of Funds, Including Grants, Land donations, deferred fees, owner e uUy. de. 1st Mort a e 360 7.250/. $ 2,916,778 238,771 N/A City Loan 660 3.00% $ 4,000,000 Residual Recei ts Deterred t Deferred Develo er Fee/Costs N/A 0.00% $ 11,275 Deferred t Total Permanent Financing Tax Credit Equity Total Sources of Project Funds $ $ $ 6,928,053 10,621,198 17,549,251 1. Name ofLender/Source Street Address Ist Mort~age Contact Name State CA Phone Number Ist Trust Deed Construction Loan WConunitted I City Type of Financing 'Not Committed 2. Name ofLenderlSource Street Address City Los Angeles Type of Financing Meta Housing Corporation 1640 Sepulveda Blvd., Suite #425 Contact Name State CA Phone Nwnber Deferred DeveIo er Fee & Costs Paid at Perm wan Conversion Co~~d N~Comm~d Kasey Burke (310) 575-3543 x 3. Name of Lender/Source Economic Development Agency of the City of San Bernardino, CAJRDA Housing Fund Street Address 201N. "E" Street, Suite 301 Contact Name Carey Jenkins City San Bernardino State CA Phone Number (909) 663-1044 Type ofFinancmg Residual Receipts Ulan WCommitted t. Name ofLender/Source Street Address 'Not Committed Contact Name Phone Nwnber City Type of Financing State DConunitted INot Committed California Tax Credit Allocation Committee Low-Income Housing Tax Credit Application Rev. February 1, 2006 CDC/2009- 39 ATTACHMENT NO.4 PART vn. PROJECT FINANCING (Source. of Fund.) A. Construction Financing List Below All Projected Sources Required to Complete Construction. Cha.e 14 4.00% $ 9,750,000 CitLoan 24 3.00% $ 4,000,000 0 24 5.00% $ Tax Credit E uit 24 N/A $ 2,655,300 Def. Fee and Cost. N/A N/A $ 1,143,952 Total Fundsfor Construction $ 17,549,251 I. Name of Lender/Source Street Address City Type of Financing Constmction Lender State CA 1 It Trost Deed Construction Loan DCommitled Contact Name Phone Number DNot Committed 2. Name of Lender/Source Street Address City Type of Financing Tax Credit Equity Investor Contact Name Phone Number State Bridge Loan wcommitted o Not Committed 3. Name of Lender/Source Street Address City Los Angele. Type of Financing Meta Housing Corporation 1640 Sepulveda Blvd., Suite #425 Contact Name State CA Phone Number Deferred Develo er Fee & Costs Paid at Perm Loan Conversion X Committed Not Committed Kasey Burke (310) 575-3543 4. Name of Lender/Source Ec:onomic Development Agency uribe City or San Bernardino, CAlRDA Housing Fund Street Address 201 North "En Street, Suite 301 Contact Name Carey Jenkins City San Bernardino State CA Phone Number (909) 663-1044 Type of Financing Residual Reoeipt. Loan [!]Committed 5. Name of Lender/Source Street Address City Type of Financing o Committed ONot Committed Contact Name Phone Number State DNot Committed California Tax Credit AI/oeation Committee Low-Income Housing Tax Credit Application Rev. February 1, 2006 CDC/2009-39 CONSENT TO ASSIGNMENT [Escrow No.] The undersigned, Seller under the Purchase Agreement, consents to the foregoing assignment of Assignor's interest as Purchaser under the Purchase Agreement to "Seller" By: Date: ,2009 Name: Title: P :\Agendas\Agenda Attachments\Agenda Attachments\Agenda Attachments\Agnnts-Amend 2009\08-03-09 Meta Housing ~ Final DDAdoc Date: CDC12009-39 ACKNOWLEDGMENT OF ASSIGNMENT [Escrow No.] The undersigned hereby acknowledges the foregoing Assigrnnent. TITLE COMPANY By: ,2009 07-29-09 Meta Housing - DDA 3 CDC/2009-39 Attachment No.6 Agency Grant Deed RECORDING REQUESTED BY ) Redevelopment Agency ) of the City of San Bernardino ) ) ) AND WHEN RECORDED MAIL TO: ) ) ) ) Attention: ) ) (Space above line reserved for use by Recorder) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AGENCY GRANT DEED OF A PUBLIC AGENCY AND COMMUNITY REDEVELOPMENT AFFORDABLE SENIOR CITIZEN RESIDENTIAL HOUSING DEVELOPMENT, USE AND OCCUPANCY CONDITIONS, COVENANTS AND RESTRICTIONS This Agency Grant Deed of a Public Agency and Community Redevelopment Affordable Senior Citizen Residential Housing Development, Use and Occupancy Conditions, Covenants and Restrictions (the "Agency Grant Deed") hereby grants from the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), that certain real property situated at the Streets (APNs: ), San Bernardino, California (the "Property") to (the "Developer"), subject to the community redevelopment affordable senior citizen residential housing development, use and occupancy conditions, covenants and restrictions contained in PART B hereof. The Agency is the grantor in this Agency Grant Deed and the Developer is the grantee. PART A For valuable consideration, the receipt of which is hereby acknowledged, the Agency hereby grants to the Developer, subject to the community redevelopment affordable senior citizen residential housing development, use and occupancy conditions, covenants and restrictions of this Agency Grant Deed, all of the right, title and interest of the Agency in the Property, as more particularly described below: 4 07-29-09 Meta Housing - DDA CDC/2009-39 (-- The Property--) See Exhibit "A" attached hereto, on file in the Official Records of the Office of the Recorder of San Bernardino County. PARTB The grant of the Property by the Agency to the Developer is expressly subject to the satisfaction of the community redevelopment affordable senior citizen residential housing development, use and occupancy conditions, covenants and restrictions as arise under that certain agreement entitled "2009 Affordable Senior Citizen Rental Housing Low and Moderate Income Housing Funds Grant Disposition and Development Agreement," dated as of ,2009 (the "Agreement"), by and between the Agency and the Developer: I. The Property shall be reserved for development, use, improvement and occupancy for senior citizen household multi-family residential purposes, as the term "Senior Citizen Household" is defined below; 2. For the purpose of subparagraph I above, the following definitions of certain terms shall apply: "Senior Citizen Household" means and refers to a person or family eligible to occupy a rental dwelling unit on the Property under the "HUD Capital Advance Documents", as this term is defined in the Agreement, and after the expiration of the term of the HUD Capital Advance Documents, the words Senior Citizen Household shall mean and refer to a person or family who is/are at the time of initial occupancy of the rental dwelling unit by such person(s): (i) sixty-two (62) years of age or older; and, if applicable. (ii) provided at least one (I) member of the household is (i) 62 years of age or older with such household limited to two (2) adult individuals, and (ii) a "qualified permanent resident", as this term is defined in Civil Code Section 51.3(b)(2) with no minor children comprising such household except as required by Civil Code Section 51.3(b )(3). PART C Subject to the covenant of the Developer as provided in PART B, the Developer shall refrain from restricting the rental, sale, or lease of any portion of the Property on the basis of race, color, creed, religion, sex, marital status, age, physical or mental disability, ancestry, or national origin of any person. All such deeds, leases, or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) Deeds: In deeds, the following language shall appear: Except as specifically provided for in the Agency Regulatory Agreement (the "Agency Regulatory Agreement"), dated , 200_, recorded in the official records of the County of San Bernardino, 5 (\7 "JO-1"'lQI\A..." U...".;"" _ IlOA CDC/2009-39 State of California (the "Official Records"), as Instrument No. , with respect to renting the units within the Project to Senior Citizens, as such term is defined therein, and subject to the covenant in the Agency Grant Deed that restricts the Property for development, use, improvement and occupancy by Senior Citizen Households, as this term is defined in the Agency Regulatory Agreement. The Developer herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, physical or mental disability, ancestry, or national origin including all other protected classes of persons and groups of persons as may be considered as such by any local, State or Federal law and as shall be required pursuant to Health & Safety Code Section 33435 and Section 33436, in the sale, lease, rental, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the Developer itself, or any persons claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall run with the land. (b) Leases: In leases, the following language shall appear: The lessee herein covenants by and for itself, its heirs, executors, administrators, successors, and assigns, and all persons claiming under or through them and this lease is made and accepted upon and subjectto the following conditions: Except as specifically provided for in the Agency Regulatory Agreement, dated , 200_, and recorded in the official records of the County of San Bernardino, State of California (the "Official Records"), as Instrument No. , with respect to renting units within the Project to Senior Citizens, as such term is defined therein, and subject to the covenant in the Agency Grant Deed that restricts the Property for development use, improvement and occupancy by Senior Citizen Households, as this term is defined in the Agency Regulatory Agreement. 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, age, physical or mental disability, ancestry, or national origin, including all other protected classes of persons and groups of persons as may be considered as such by any local, State or Federal law and as shall be required pursuant to Health & Safety Code Section 33435 and Section 33436, in the leasing, subleasing, renting, transferring, use, occupancy, tenure, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased. (c) Contracts: In contracts, the following language shall appear: Except as specifically provided for in the Agency Regulatory Agreement, dated , 200_, and recorded in the official records of the County of San Bernardino, State of California (the "Official Records"), as Instrument No. , with respect to renting units within the Project to Senior Citizens, as such term is defined therein, and subject to the covenant in the Agency Grant Deed that restricts the Property for development use, improvement and occupancy by Senior Citizen Households, as this term is defined in the Agency Regulatory 6 07-29-09 Meta Housing - DDA CDC/2009-39 Agreement. 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, age, physical or mental disability, ancestry, or national origin including all other protected classes of persons and groups of persons as may be considered as such by any local, State or Federal law and as shall be required pursuant to Health & Safety Code Section 33435 and Section 33436, in the sale, lease, rental, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the land. The foregoing covenants in this Part C shall remain in effect in perpetuity. PARTD No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in PART B, PART C or PART E of this Agency Grant Deed shall, defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by and approved by the Agency pursuant to the Agreement; provided, however, that any successor of the Developer to the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. III III III III III III III III III III III III III III III III 7 07.29.09 Meta Housing. DDA CDC/2009-39 THIS AGENCY GRANT DEED is executed as of the date indicated below next to the authorized signature of the Interim Executive Director of the Agency. AGENCY Redevelopment Agency of the City of San Bernardino, a corporate body, public and politic Dated: By: Emil A. Marzullo, Interim Executive Director Approved as to Form and Legal Content: By: Agency Counsel [NOTARY JURAT ATTACHED] 8 07-29-09 Meta Housin.e; - DDA CDC/2009-39 ACCEPTANCE OF AGENCY GRANT DEED AND COMMUNITY REDEVELOPMENT AFFORDABLE SENIOR CITIZEN RESIDENTIAL HOUSING DEVELOPMENT, USE AND OCCUPANCY CONDITIONS, COVENANTS AND RESTRICTIONS BY THE DEVELOPER The undersigned officers of corporation (the "Developer"), hereby accepts the delivery of the instrument identified above as the "Agency Grant Deed of a Public Agency and Community Redevelopment Affordable Senior Citizen Residential Housing Development, Use and Occupancy Conditions, Covenants and Restrictions" (the "Agency Grant Deed"), and the transfer ofthe Property from the Redevelopment Agency ofthe City of San Bernardino, subject to the conditions, covenants and restrictions contained in the Agency Grant Deed. The Developer hereby acknowledges and agrees that it accepts the Property in an "AS- IS", "WHERE IS" and "SUBJECT TO ALL F AUL TS" condition and that the Developer is solely responsible for causing the Property to be improved as set forth in the Agreement by and between the Agency and the Developer. The Developer hereby further accepts and agrees to each of the use, and occupancy conditions, covenants and restrictions contained in the Agency Grant Deed that touch and concern the Property. DEVELOPER a By: Date: Its: By: Its: [NOTARY JURAT ATTACHED] 9 07-29-09 Meta Housing - DDA CDC/2009- 3 9 Attachment No.7 Senior Citizen Rental Housing Use Covenant RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite301 San Bernardino, California 92401 Attn: Executive Director (Space Above Line For Use By Recorder) REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO SENIOR CITIZEN RENTAL HOUSING USE COVENANT (2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Agreement) THIS SENIOR CITIZEN RENTAL HOUSING USE COVENANT (the "Agreement") is entered into by and between the Redevelopment Agency of the City of San Bernardino, a body corporate and politic (the "Agency") and the City of San Bernardino (the "City') in light of the facts set forth in the following paragraphs of the Recitals: RECITALS The Agency owns the lands situated within the redevelopment project area of the Redevelopment Project which are referred to herein as the "Site". A legal description of the Site is attached hereto as Exhibit "A". The Agency and the Magnolia Highland, L.P., a California limited partnership (the "Developer") have entered into an agreement affecting the Site entitled "2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Agreement", dated as of July 1,2009 (the "2009 DDA"). A copy of the 2009 DDA is on file with the Agency and is available for inspection as a public record of the Agency. NOW THEREFORE THE CITY AND THE AGENCY FOR THEMSELVES AND THEIR SUCCESSORS AND ASSIGNS DO HEREBY COVENANT AND AGREE AS FOLLOWS: Section I. (a) As used in this Agreement, the term "Senior Citizen Household" means and refers to a person or family who is eligible to occupy a dwelling unit on the Site because at the time of such person's initial occupancy of such dwelling unit, such person is: (i) 62 years of age or older; and if applicable 10 07-29-09 Meta Housing - DDA CDC/2009-39 (ii) provided at least one (1) member of the household is (i) 62 years of age or older with such household limited to two (2) adult individuals, and (ii) a "qualified permanent resident", as this term is defined in Civil Code Section 51.3(b)(2) with no minor children comprising such household except as required by Civil Code Section 51.3(b)(3). (b) As used in this Agreement, the term "Owner" means and refers to the Agency, and to each successor or assign of the interest of the Agency in the Site, including without limitation the Developer, at such time as the Developer may acquire the Site from the Agency under the terms of the 2009 DDA. Section 2. Except during the temporary period oftime of twelve (12) months following the date of recordation of this Covenant, and the construction of the "Project" as such term is defined in the 2009 DDA, the Owner hereby agrees to reserve and restrict the Site for improvement, use and residential occupancy, by persons and families who at the time of initial occupancy of a dwelling unit on the Site continuously and thereafter satisfy the requirements of a Senior Citizen Household. Subject to the Owner first obtaining the written permission of the City, and such permission shall not be unreasonably conditioned, delayed or denied by the City, nothing in the preceding sentence of this Section 2 shall be deemed to prohibit the Owner from reserving up to one (1) of the dwelling units on the Site for occupancy by on-site residential management employees ofthe Owner, and the household of such on-site residential management employees of the Owner need not qualifY as a Senior Citizen Household. Section 3. This Agreement, including without limitations the Senior Citizen Household occupancy requirements under Section 2 of this Agreement, shall be in effect following the date of its recordation for a term of ninety-nine (99) years. Section 4. The Owner and the City hereby declare their specific intent that the covenants, reservations and restrictions set forth herein are community redevelopment covenants and are part of a plan for the promotion and preservation of housing reserved for Senior Citizen Households within the territorial jurisdiction of the Agency and that each shall be deemed covenants running with the land and shall pass to and be binding upon the Site and each successor-in-interest ofthe Owner in the Site for the term set forth in Section 3. The Owner hereby expressly assumes the duty and obligation to perform each of the covenants and to honor each ofthe reservations and restrictions set forth in this Covenant. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument. Section 5. The City and the Owner hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the Owner's legal interest in the Site is affected by the affordable dwelling use and occupancy covenants hereunder. The City and the Owner hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Site by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the Senior Citizen Household housing goals and objectives of the Agency and in order to make the Site available for acquisition and redevelopment by the Owner. 11 07-29-09 Meta Housing - DDA CDC/2009-39 Section 6. (a) The failure of the Owner or any person under its direction or control to comply with or perform when due any material term, obligation, covenant or condition contained in this Covenant is a default and shall constitute a material breach of this Agreement and, if not corrected, cured or remedied in the time period set forth in Section 6(b), shall constitute an "Event of Default" hereunder. (b) The City shall give written notice of default to the Owner stating that such notice is a "Notice of Default", specifying the default complained of by the City and requiring the default to be remedied within thirty (30) days of the date ofthe Notice of Default. Except as required to protect against further material damage, the Agency may not institute legal proceedings against the Owner until thirty (30) days after giving notice. Failure or delay in giving notice shall not constitute a waiver of any default, nor shall it change the time of occurrence of the default. If the default specified in the Notice of Default is such that it is not reasonably capable of being cured within thirty (30) days, and if the Owner initiates corrective action within said thirty (30) day period and diligently works to effect a cure as soon as possible, then the Owner may have such additional time as authorized in writing by the Agency as reasonably necessary to complete the cure of the breach prior to exercise of any other remedy for the occurrence of an Event of Default. Such authorization for additional time to cure shall not be unreasonably withheld. Ifthe Owner fails to take corrective action relating to a default within thirty (30) days following the date of notice (or to complete the cure within the additional as may be authorized by the City), an Event of Default shall be deemed to have occurred. (c) Any failure or delays by the City in asserting any of its rights and remedies as to any default arising under this Agreement shall not operate as a waiver of any default or of any such rights or remedies. Delays by the City in asserting any of its rights and remedies shall not deprive the City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. (d) Upon the occurrence of an Event of Default, the City shall, be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i) by mandamus or other suit, action or proceeding at law or in equity, to require the Owner to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the City; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of the Owner to the City. (e) The rights and remedies of the City as set forth in this Section 6 are cumulative and the exercise by the City of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the Owner. (I) In the event oflitigation between the parties arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and other costs and expenses incurred, including such fees and costs incurred on appeal, in addition to whatever other reliefthe prevailing party may be entitled to. As used in the preceding sentence, the words "reasonable attorney's fees" in the case of 12 07-29-09 Meta Housing. DDA CDC/2009-39 the City include the salary and benefits payable to lawyers employed in the Office of the City Attomey of the City, who provide legal counsel to the City in such litigation as allocated on an hourly basis. (g) No third party shall have any right or power to enforce any provision of this Agreement on behalf of the City or to compel the City to enforce any provision of this Agreement against the Owner of the Site. Section 7. This Agreement shall be governed by the laws of the State of California. Section 8. This Agreement may be amended after its recordation only by a written instrument executed by the Owner and by the City. Section 9. Upon the transfer by the Agency ofthe Site to the Developer, the Developer shall execute and record concurrently with such transfer, an acknowledgment substantially in the form attached hereto as Exhibit "B" that this Agreement remains in full force and effect and that the Developer acquire its interest in the Site subject to the terms and conditions of this Agreement. 13 07.29-09 Meta Housing - DDA CDC/2009-39 IN WITNESS WHEREOF, the Owner and the Agency have caused this Covenant to be signed, acknowledged and attested on their behalf by du1y authorized representatives in counterpart original copies which shall upon execution by all of the parties be deemed to be one original document. AGENCY Redevelopment Agency of the City of San Bernardino By: By: Approved As To Form: By: Agency Special Counsel [NOTARY JURAT ATTACHED] CITY City of San Bernardino By: By: Approved As To Form: By: City Attorney 14 07-29-09 Meta Housing - DDA CDC/2009-39 EXHIBIT "A" Legal Description of the Site 15 07-29-09 Meta Housing - DDA 07.29.09 Meta Housing ~ DDA CDC/2009-39 EXHIBIT "B" ACKNOWLEDGEMENT OF DEVELOPER 16 CDC/2009- 39 Attachment No.8 Notice of Agreement 17 07-29.09 Meta Housine - DDA CDC/2009-39 RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite301 San Bernardino, California 9240 I Attn: Executive Director (Space Above Line For Use By Recorder) NOTICE OF AGREEMENT REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Agreement: Meta Housing Corporation and Magnolia Higbland, L.P.) TO ALL INTERESTED PERSONS: PLEASE TAKE NOTICE: Magnolia HigWand, L.P., a California limited partnership (the "Developer") and the Redevelopment Agency for the City of San Bernardino, a public body corporate and politic (the "Agency") have entered into a community redevelopment agreement entitled: "2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Agreement: Meta Housing and Magnolia HigWand, L.P.", dated as of June 1,2009 (the "2009 DDA"). PLEASE TAKE FURTHER NOTICE that the 2009 DDA affects the real property situated in the redevelopment project area of the Northwest Redevelopment Project, as described in the 2009 DDA, as the "Site": The Site is more particularly described as: Parcel I of Parcel Map No. 19200, Book _, Page _ of Parcel Maps, Office of the Recorder San Bernardino, County I 050_030.019 2-29-08 CDC/2009-39 Interested persons may inspect the 2009 DDA as a public record of the Agency during the regular business hours of the Agency. The Agency may be contacted as follows: Redevelopment Agency of the City of San Bernardino 201 North "E" Street Suite 301 San Bernardino, California 9240 I Attn: Executive Director (909) 663-1044 The 2009 DDA contains affordable senior citizen rental housing development, occupancy and affordable rental rate covenants of the Developer in favor of the Agency which touch and concern the Site and which run with the land for a term of years as provided in the 2009 DDA as affordable housing community redevelopment covenants. For additional and more specific information regarding these affordable rental rate covenants affecting the Site, interested persons are urged to contact the Agency. The recordation of this Notice of Agreement is authorized under Health and Safety Code Section 33336. This Notice of Agreement may be executed by the parties in counterparts and when each such counterpart is executed each such counterpart shall be deemed to be one original document. 2 050,030.019 2-29-08 CDC/2009-39 IN WIlNESS WHEREOF, the undersigned have executed this Notice of Agreement on the dates indicated next to each of their signatures as appear below. AGENCY Redevelopment Agency of the City of San Bernardino By: Chair of the Community Development Commission of the City of San Bernardino, its governing board Date: By: Date: Executive Director Approved As To Form: Agency Counsel DEVELOPER Executed this _ day of ,200 Magnolia Highland, L.P., a California limited partnership By: Magnolia HigWand, LLC, a California limited liability company Its: Administrative General Partner By: John M. Huskey Manager 3 050.030.019 2-29-08 Approved As To Form: Legal Counsel for Developer 050,030.019 2-29-08 CDC/2009-39 By: Western Community California non-profit Corporation Housing, public Its: Managing General Partner By: By: Inc., a benefit Graham Espley-Jones President Leanne Truofreh Secretary 4 CDC/2009-39 Attachment No.9 Agency Regulatory Agreement RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attn: Executive Director (Space Above Line Reserved For Use By Recorder) (Exempt from Recording Fees Per Gov!. Code Sec. 6103) [EDITOR'S NOTE: THE TEXT OF THIS REGULA TORY AGREEMENT IS PRESENTED IN DRAFT FORM AS PART OF ATTACHMENT NO.9 TO THE 2009 ACQUISITION, DISPOSITION AND DEVELOPMENT AGREEMENT. THE FINAL FORM OF THIS REGULATORY AGREEMENT SHALL BE SUBJECT TO THE JOINT REVIEW AND APPROVAL BY THE PARTIES OF THE SPECIFIC TERMS ON WHICH THE AFFORDABLE RENTAL HOUSING DEVELOPMENT PROJECT RESERVED FOR OCCUPANCY BY SENIOR CITIZEN HOUSEHOLDS, MAY BE UNDERTAKEN BY (MAGNOLIA HIGHLAND, L.P.) THE DEVELOPER, AS PART OF THE PROJECT. THE FINAL TEXT OF THE REGULATORY AGREEMENT IS ALSO SUBJECT TO THE APPROVAL BY THE PARTIES OF THE CONDITIONS OF THE STATE TCAC REGULATORY AGREEMENT FOR THE PROJECT.] REDEVELOPMENT AGENCY FOR THE CITY OF SAN BERNARDINO REGULATORY AGREEMENT AND COVENANTS (Magnolia Highland, L.P. Affordable Senior Citizen Housing Project) THIS REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REGULATORY AGREEMENT AND COVENANTS (the "Agency Regulatory Agreement") is dated as of ,2010, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic (the "Agency") and Magnolia Highland, L.P., a California limited partnership (the "Developer") with reference to the facts set forth in the following Recitals. 18 07-29-09 Meta Housing - DDA CDC/2009-39 -- RECITALS -- A. A legal description of the Site (as hereinafter defined) is attached hereto as Exhibit "A" and incorporated herein by this reference. B. The Agency and the Developer have entered into that certain agreement entitled "2009 Acquisition, Disposition and Development Agreement (Meta Housing Corporation and Magnolia Highland L.P.)", dated as of June 1,2009, (the "2009 DDA") pursuant to which the Agency shall provide certain affordable rental housing development assistance in support of the affordable senior citizen rental housing development project constructed as part ofthe "Project", as the item is defined by the 2009 DDA, subject to certain conditions, including the terms and conditions of this Agency Regulatory Agreement. C. The terms of the 2009 DDA require that certain covenants and affordability restrictions remain in full force and effect on the Site for a term of at least sixty (60) years following the date of recordation ofthis Agency Regulatory Agreement (the 'Term") in order to ensure that: (i) the units in the Project (as hereinafter defined) (exclusive of the on-site manager(s)' unites)), shall at all times be occupied or reserved for occupancy by elderly persons who have a household income which is not more than eighty percent (80%) of median income, adjusted for family size, as determined by HUD for the San Bernardino - Riverside statistical metropolitan area ("Median Income"); and (ii) each elderly person, or elderly person household which qualifies for occupancy in the Project (each a "Qualifying Resident") shall pay no more as rent than an "Affordable Rent" as defined below. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND UNDERTAKINGS SET FORTH HEREIN AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE DEVELOPER AND THE AGENCY DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, AS FOLLOWS: Section I. Definitions of Certain Terms and Phrases. As used in this Agency Regulatory Agreement, the following words and terms shall have the meaning as provided in the Recitals or in this Section 1, unless the specific context of usage of a particular word or term may otherwise require: . Affordable Rent. The term "Affordable Rent" means for the total number of units in the Project reserved for occupancy by Qualifying Residents whose annual household income may not exceed the annual income for a "lower income household" as defined in Health and Safety Code Section 50079.5, total charges for rent, utilities and related services, on an annual basis, shall not exceed eighty percent (80%) of Median Income, adjusted for family size, and in the case of the total number of units in the Project reserved for occupancy by Qualifying Residents whose annual household income may not exceed the annual income for a "very low income household" as defined in Health and Safety 19 07-29-09 Meta Housine: - DDA CDC/2009-39 Code Section 50079.5, total charges for rent, utilities and related services, on annual basis, shall not exceed fifty percent (50%) of Median Income, adjusted for family size. . Agency Subordination Agreement for Project Financing. The words "Agency Subordination Agreement for Project Financing" mean and referto the form of the separate loan subordination agreements by and between the Developer and the Agency in favor of a lender who provides development financing for the Project, as set forth in this Agency Regulatory Agreement. The first such Agency Subordination Agreement for Project Financing shall be in favor of the Construction Lender and the Construction Loan, and the second shall be in favor of the Permanent Lender and the Permanent Loan. The Agency Subordination Agreement for Project Financing with respect to the Construction Loan and/or Permanent Loan may be in the form of an intercreditor agreement among the Agency and other holders of security interests in the Project if the Developer obtains a Construction Loan or Permanent Loan, as applicable, from multiple lending sources, such as a portion of such construction financing from a conventional lender and a portion from an instrumentality of the State of California, including, without limitation, the California Housing Finance Agency. Each such Agency Subordination Agreement for Project Financing shall be subject to the terms and conditions of this Agency Regulatory Agreement. . City. The term "City" means and refers to the City of San Bernardino, California. . Construction Lender. The term "Construction Lender" means and refers to the entity or entities providing the Construction Loan to the Developer. . Construction Loan. The term "Construction Loan" means and refers to the loan (or collectively loans from multiple sources, including instrumentalities of the State of California) which the Developer shall hereafter obtain in an approximate principal amount as provided in the 2009 DDA, in order to provide for the construction and improvement of the Project. The Construction Loan may be derived from one or more sources of financing obtained by the Developer, including, from the proceeds of a construction loan or grant of construction funding originated to the Developer by an instrumentality of the State of California, from the proceeds of a construction loan provided by a state or federally regulated third-party lending institution, or from a combination of these funding sources. . Construction Loan Documents. The term "Construction Loan Documents" shall have the same meaning as set forth in the 2009 DDA. . Hazardous Substances. The term "Hazardous Substances" shall have the same meaning as set forth in the 2009 DDA. . Median Income. The words "Median Income" mean median income as determined by the United States Department of Housing and Urban Development for the San Bernardino- Riverside Metropolitan Area. 20 07-29-09 Meta Housing - DDA CDC/2009-39 . Permanent Loan. The words "Permanent Loan" shall have the same meaning as set forth in the 2009 DDA. . Permanent Loan Documents. The words "Permanent Loan Documents" shall have the same meaning as set forth in the 2009 DDA. . Project. The term "Project" shall mean all of the work of investigation, design, construction, improvement, modification, and financing necessary for the Developer to acquire the Site and construct and place in service thereon (or on a portion of the Site) the affordable senior citizen rental housing project consisting of seventy nine (79) rental units reserved for occupancy by Qualifying Tenants and one (I) unit for occupancy by on-site management personnel. The Project also includes all related landscaping, driveways, utilities, and any improvements which may be required by the City on the Site or within the public rights-of-way adjacent to the Site. The functional elements of the Project are more particularly described in the Scope of Development and Site Improvement Plan attached as Exhibit "B" to this Agency Regulatory Agreement. . Qualifying Resident. The words "Qualifying Resident" mean the tenant of any unit within the Project (other than the single on-site manager's unit) who shall be at least sixty two (62) years of age and who shall have an income that does not exceed the Qualifying Resident Income, as provided in this Agency Regulatory Agreement. If either the Construction Loan Documents or, later, the Permanent Loan Documents do not have a definition of Qualifying Tenant that supercedes the definition set forth in this Regulatory Agreement, then during the Term ofthis Regulatory Agreement, the words "QualifYing Resident" mean the senior citizen household of any unit within the Project which shall be composed of at least one (I) member who is sixty two (62) years of age and whose other members, if any, satisfY the provisions of California Civil Code Section 51.3, and whose combined household income does not exceed Qualifying Resident Income. . Qualifying Resident Income. The words "QualifYing Resident Income" mean in the case of Qualifying Residents who shall unit in the Project, a household income which is not more than eighty percent (80%) of Median Income, adjusted for family size; and . Site. The term "Site" shall have the same meaning as set forth in the 2009 DDA. . State TCAC Regulatory Agreement. The words "State TCAC Regulatory Agreement" shall have the same meaning as set forth in the 2009 DDA. . Term. The word "Term" means the period oftime beginning on the date ofthe recordation of this Agency Regulatory Agreement and ending on the sixtieth (60th) anniversary thereafter. The titles and headings of the sections of this Agency Regulatory Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the meaning of any of the terms or provisions hereof. 21 07-29-09 Meta Housin,g - DDA CDC/2009-39 Section 2. Agency. Acknowledgment of the Developer and Acknowledgment of Subordination of the (a) The Developer hereby acknowledges that this Agency Regulatory Agreement imposes certain restrictions on the use and occupancy of the Project and the Site during the Term of this Agency Regulatory Agreement. The Developer acknowledges and understands that the restrictions shall be applicable to the Project and the Site for the Term hereof, commencing on the date of recordation of this Agency Regulatory Agreement. Initials of Developer (b) Concurrently upon the execution and recordation of this Agency Regulatory Agreement the Developer shall obtain certain purchase money mortgage financing for the improvement of the Site from (as the Construction Lender), subject to the provisions of the 2009 DDA. The Developer has provided the Agency with a true and correct copy of the Construction Loan Documents. As a condition to providing its mortgage loan to the Developer the Construction Lender requires the Agency to agree that the provisions of this Agency Regulatory Agreement shall be junior and subordinate to the security interest of the Construction Lender in the Site securing repayment of the Construction Loan. The Agency hereby acknowledges and agrees that the provisions of this Agency Regulatory Agreement are subordinate and junior to the security interest of the Construction Lender in the Site securing repayment of the Construction Loan. Section 3. Covenant of Developer to Rent to Qualifving Tenants: Covenant of Developer to Charge Affordable Rent: Covenant of Developer Regarding Maintenance ofProiect Operating Business Records. (a) Except during the "Temporary Period" as described in subsection (t), below, during the Term, the Developer covenants that all of the dwelling units in the Project (exclusive of the on-site manager(s)' unit(s)) shall at all times be occupied or held vacant available for rental by Qualifying Tenants. Determination of Qualifying Tenant Income shall be made by the Developer at the time of initial occupancy of a dwelling unit and, upon each renewal of a Qualifying Tenant's lease, recertification of Qualifying Tenant Income shall be made by the Developer. The Developer shall obtain, prior to initial occupancy, and, thereafter, maintain on file, income certifications from each Qualifying Tenant renting any of the dwelling units in the Project. The Developer shall make a good faith effort to verify that the income information provided by an applicant (or occupying Qualifying Tenant household) in an income certification is accurate by taking one or more of the following steps as a part ofthe verification process: (I) obtain an income tax return for the most recent tax year; (2) conduct a credit reporting agency or similar search; (3) obtain an income verification form from the applicant's current employer: (4) obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant receives assistance from either of such agencies; or (5) if 22 07-29-09 Meta Housing - DDA CDC/2009- 39 the applicant is unemployed and has no such tax return, obtain another form of independent verification of income. All such verification information shall only be obtained by Developer after obtaining the applicants/QualifYing Tenant's written consent for the release of such information to the Developer. On the anniversary of the occupancy of each such dwelling unit the Developer shall recertifY the household income of the Qualifying Tenant household occupying the dwelling unit. Copies of tenant income certifications shall be made available by the Developer to the Agency upon request. For purposes of this Section 3(a), the Developer may conclusively rely upon the evidence of the age of the occupant(s) of the unit as presented in a valid California Driver's License, other form of identification issued by the State of California or the United States government, which includes a date of birth. (b) Except during the Temporary Period, the Developer covenants that it shall not charge in excess of Affordable Rent for any dwelling unit in the Project. The Developer may increase rents based on changes in Median Income only and no more than once in any twelve-month period. (c) Except during the Temporary Period, business records for the Project shall be established and maintained by the Developer relating to the use and occupancy of the Site and the Project for affordable elderly person rental housing use purposes, as authorized herein. The Developer shall be responsible for establishing and maintaining such records during the Term of this Agency Regulatory Agreement, and the Developer shall provide the Agency with copies of such records within thirty (30) days of written request by the Agency. (d) Except during the Temporary Period, the Developer and all Qualifying Tenants shall permit the Agency to conduct inspections of the Site and the Project from time-to-time for purposes of verifying compliance with this Agency Regulatory Agreement, upon thirty (30) days prior written notice to the Developer. ( e) Commencing on the June 30 following the fifth (5th) anniversary of the date of recordation of this Agency Regulatory Agreement or on the June 30 following the date on which 25% ofthe dwelling units in the Project are placed in service as rental housing units, whichever date may first occur, and on each June 30 thereafter during the Term, the Developer shall submit a report to the Agency, in a form approved by the Agency (the "Annual Report"). The Annual Report shall include for each dwelling unit in the Project, the rent, income and family size of the QualifYing Tenant household occupying the dwelling unit. The Annual Report shall also state the date the tenancy commenced for each dwelling unit and such other information as the Agency may be required by law to obtain; provided, however, that the Agency shall take reasonable steps to maintain the confidential nature ofthe information contained in any Annual Report specifically relating to any dwelling unit. The Developer shall provide any additional information reasonably requested by the Agency, including without limitation Project-related income and expense accounting information. The Agency shall have the right to examine and make copies of all books, records or other documents of Developer which pertain to any dwelling unit; provided, however, that the Agency shall take reasonable steps to maintain the confidential nature of such information. The Developer shall maintain complete, accurate and current records pertaining to the dwelling units, the Site and the Project, and shall permit any duly authorized representative of the Agency (during business hours and upon prior notice as provided herein) to inspect such records, including records pertaining to income and household size of QualifYing Tenants; provided, however, that the Agency shall take reasonable steps to maintain the confidential nature of information relating to any specific household. 23 07.29-09 Meta Housin,g. DDA CDC/2009-39 (f) The "Temporary Period" shall commence on the date of recordation of this Regulatory Agreement and continue until the end of the twelfth (12th) calendar month following the recordation of this Agency Regulatory Agreement. Section 4. Proiect. Covenant of the Developer With Respect to the Rental of Dwelling Units in the The Developer for itself, its successors and assigns hereby covenants and agrees that, in connection with the rental of units in the Project to Qualifying Tenants during the Term, it shall comply with the following requirements: (1) The lease between the Developer and the Qualifying Tenant shall be for not less than one year, unless by mutual agreement between the Developer and the Qualifying Tenant, but in such a case for not less than six (6) months, as required by applicable provisions of the Internal Revenue Code. (2) The lease shall not contain any of the following provisions: (i) an agreement by the QualifYing Tenant to be sued, to admit guilt or to entry ofajudgment in favor of the Developer in a lawsuit brought in connection with the lease; (ii) an agreement by the QualifYing Tenant that the Developer may take, hold or sell personal property of household members, without notice to the Qualifying Tenant and a court decision on the rights of the parties, other than an agreement by the tenant concerning disposition of personal property remaining in the housing unit, after the Qualifying Tenant has moved out of the dwelling unit; (iii) an agreement by the QualifYing Tenant not to hold the Developer or its agents legally responsible for any action or failure to act, whether intentional or negligent; (iv) an agreement by the Qualifying Tenant that the Developer may institute a lawsuit without notice to the Qualifying Tenant; (v) an agreement by the QualifYing Tenant that the Developer may evict the QualifYing Tenant without instituting a civil court proceeding in which the Qualifying Tenant has the opportunity to present a defense, or before a court decision on the rights ofthe parties; (vi) an agreement by the Qualifying Tenant to waive any right to a trial by jury; (vii) an agreement by the QualifYing Tenant to waive the Qualifying Tenant's right to appeal, or to otherwise challenge a court decision in connection with the lease; (viii) an agreement by the QualifYing Tenant to pay attorney's fees or other legal costs, even if the Qualifying Tenant wins in a court proceeding by the Developer against the Qualifying Tenant; provided, however, the Qualifying Tenant may be obligated to pay costs, if the tenant loses such a legal action. 24 07.29-09 Meta Housing - DDA CDC/2009-39 (3) The Developer shall not terminate the tenancy or refuse to renew the lease of a Qualifying Tenant, except for serious or repeated violations of the terms and conditions of the lease; for violation of applicable Federal, State, or local law; or for other good cause. The Developer shall, in connection with a termination of a tenancy or a refusal to renew a lease, serve written notice upon the Qualifying Tenant specifying the grounds for the action, at least thirty (30) days before the termination of the tenancy. (4) The Developer shall adopt written tenant selection policies and criteria that: (i) are consistent with the purpose of providing housing for individuals who are at least sixty two (62) years of age and have an income that is no more than the Qualifying Tenant Income; (ii) are reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; (iii) give reasonable consideration to the housing needs of individuals who: occupy substandard housing; individuals that are paying more than fifty (50) percent of their annual income for rent; or individuals that are involuntarily displaced; (iv) provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and (v) give prompt written notification to any rejected applicant of the grounds for rejection. (5) All of the dwelling units in the Project shall be available for occupancy on a continuous basis to Qualifying Tenants. The Developer shall not give preference to any particular class or group of persons in renting the dwelling units. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, age, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any dwelling unit. Neither the Developer nor any person claiming under or through the Developer, shall establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any dwelling unit or in connection with the employment of persons for the operation and management of any dwelling unit, the Project or the Site. All deeds, leases or contracts made or entered into by Developer as to the dwelling units, the Project or the Site or any portion thereof, shall contain covenants prohibiting discrimination, as prescribed by this Agency Regulatory Agreement. The Developer shall include a statement in all advertisements, notices and signs for the availability of dwelling units for rent to the effect that owner is an Equal Housing Opportunity Provider. Section 5. Development and Management of the Proiect. (a) The Developer hereby reaffirms its covenant and agreement, as set forth in the 2009 DDA to undertake, and thereafter, diligently complete the development of the Project on the Site in accordance with the Budget DevelopmentJScope of Work attached hereto as Exhibit "B" (the "Scope of Development"), within the period of time set forth under the Schedule of Performance attached hereto as Exhibit "C". 25 fl7_?O_()Q M..tll H(1I1~inp' _ nnA CDC/2009-39 (b) The Agency shall have no responsibility for the management or operation of the Project or the Site. The Developer shall be responsible for management of the Project, including, without limitation, the selection of Qualifying Tenants, certification and recertification of household size, and income and the age of the head of household of all units, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Project shall at all times be managed by an experienced management agent (the "Management Agent") reasonably acceptable to the Agency, with demonstrated ability to operate senior citizen residential rental facilities similar to the Project in a manner that will provide decent, safe, and sanitary housing. For the purposes hereof, ifthe Developer directly performs the functions ofthe Management Agent by its employees or by means of a service contract with an entity which is a partner in the Developer, such a Management Agent shall be deemed approved by the Agency. If the Management Agent is an entity or person other than the Developer, its employees a partner in the Developer or an entity owned or controlled by the Developer, the Developer shall submit for the Agency's approval the identity of any proposed Management Agent, together with additional information relevant to the background, experience and financial condition of any proposed Management Agent, as reasonably requested by the Agency. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the Agency shall approve the proposed Management Agent by notifying the Developer in writing within thirty (30) days following the written request of the Developer for such approval. Unless the proposed Management Agent is disapproved by the Agency within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved. Western Seniors Housing, Inc., is hereby approved by the Agency as the Management Agent for the Project. Any Management Agent approved by the Permanent Lender during the term of the Permanent Loan Documents or by State TCAC shall be deemed approved by the Agency. (c) The Developer shall cause to be in full force and effect during the Term hereof insurance coverage, as follows: (i) If any building or improvements on the Site shall be damaged or destroyed by an insurable cause, the Developer shall, at its own cost and expense, diligently repair or restore the Project to the conditions existing immediately prior to the damage or destruction. Such work or repair shall be commenced within One Hundred Twenty (120) days after the damage or loss occurs and shall be completed 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 Developer shall make up the deficiency; and (ii) a policy of comprehensive general liability insurance written on a per occurrence basis in an amount not less than either (i) a combined single limit of TWO MILLION DOLLARS ($2,000,000.00) or (ii) bodily injury limits of ONE MILLION DOLLARS ($1,000,000.00) per person, TWO MILLION DOLLARS ($2,000,000.00) per occurrence, ONE MILLION DOLLARS ($1,000,000.00) products and completed operations. (iii) a policy of workers' compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnity, insure and provide legal defense for the Developer against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Developer in the course of carrying out the activities in this Agency Regulatory Agreement. 26 07-29-09 Meta Housing. DDA CDC/2009-39 (iv) a policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence and (ii) property damage liability limits of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) per occurrence and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) in the aggregate. Said policy shall include coverage for owned, non-owned, leased and hired vehicles. All of the above policies of insurance shall be primary insurance and shall name the City of San Bernardino and the Agency, and their officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the City of San Bernardino and/or the Agency and their officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) days prior written notice by registered mail to Agency. In the event any of said policies of insurance are canceled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. No operation of the Project shall commence until the Developer has provided Agency with certificates of insurance or appropriate insurance binders evidencing the above insurance coverages, and said certificates of insurance or binders are approved by Agency. The policies of insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated at least "A(vii)" or better in the most recent edition of Bests Insurance Rating Guide or an equivalent rating in The Key Rating Guide or in the Federal Register unless such requirements are modified or waived by the Executive Director ofthe Agency due to unique circumstances. Compliance by the Developer with the insurance requirements of the Construction Loan Documents, the Permanent Loan Documents and/or the State TCAC Regulatory Agreement shall be deemed to meet the foregoing requirements during the applicable periods of time when those agreements are in effect so long as the Agency, City and their officers, employees, and agents as additional insureds on all said policies as evidenced by certificates of insurance issued to the City and the Agency. The Developer agrees that the provisions ofthis Section shall not be construed as limiting in any way the extent to which the Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. Section 6. Maintenance of the Proiect. The Developer, for itself, its successors and assigns, hereby covenants and agrees that: (I) The exterior areas of the Project which are subject to public view (e.g.: all improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the Term, there is an occurrence of an adverse condition on any area ofthe Project which is subject to public view in contravention of the general maintenance standard described above, (a "Maintenance Deficiency") then the Agency shall notifY the Developer in writing of the Maintenance Deficiency and give the Developer thirty 27 07-29-09 Meta Housing. DDA CDC/2009-39 (30) days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. The words "Maintenance Deficiency" include without limitation the following inadequate or non-confirming property maintenance conditions and/or breaches of residential property use restrictions: failure to properly maintain the windows, structural elements, and painted exterior surface areas of the dwelling units in a clean and presentable manner; failure to keep the common areas ofthe Project free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage oflumber, building materials or equipment not regularly in use on the property; failure to regularly maintain, replace and renew the landscaping in a reasonable condition free of weed and debris; parking of any tentative-owned commercial motor vehicle in excess of7,000 pounds gross weight anywhere on the Project; the use of garage areas on the Project for purposes other than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of persons residing in the Project. In the event the Developer fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the Agency may thereafter conduct a public hearing following transmittal of written notice thereof to the Developer ten (10) days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Developer has failed to comply with the provision of this Section 6(1). If, upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, thereafter the Agency shall have the right to enter the Project (exterior areas only) and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency as authorized by this Section 6(1) shall become a lien on the Project. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Developer, the Agency shall have the right to enforce the lien in the manner as provided in Section 6(3). (2) Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the Project shall be removed by the Developer from any exterior surface of a structure or improvement on the Project by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the Project (exterior areas only) and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours following the time of its application; then in such event and without notice to the Developer, the Agency shall have the right to enter the Project and remove the graffiti. Notwithstanding any provision of Section 6(1) to the contrary, any sum expended by the Agency for the removal of graffiti from the Project as authorized by this Section 6(2) shall become a lien on the Project. If the amount ofthe lien is not paid within thirty (30) days after written demand for payment by the Agency to the Developer, the Agency shall have the right to enforce its lien in the manner as provided in Section 6(3). 28 07-29.09 Meta Housing - DDA CDC/2009-39 (3) Subject to lbe lien oflbe Senior Lender, lbe parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 6 expressly include lbe power to establish and enforce a lien or other encumbrance against the Property in the manner provided under Civil Code Sections 2924, 2924b and 2924c in the amount as reasonably necessary to restore lbe Project to lbe maintenance standard required under Section 6(1) or Section 6(2), including attorneys fees and costs of the Agency associated wilb the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs ofthe Agency in connection with such action. In any legal proceeding for enforcing such a lien against the Project, the prevailing path shall be entitled to recover its attorneys' fees and costs of suit. The provisions of this Section 6 shall be a covenant running with lbe land for the Term and shall be enforceable by the Agency in its discretion, cumulative wilb any other rights or powers granted by lbe Agency under applicable law. Nothing in the foregoing provisions of this Section 6 shall be deemed to preclude the Developer from making any alterations, additions, or olber changes to any structure or improvement or landscaping on lbe Project, provided that such changes comply with the zoning and development regulations of the City and other applicable law. Section 7. Affordable Rent Levels for Dwelling Units. (a) The Developer shall establish and maintain rental levels for the dwelling units in lbe Project at the following annual rental rates: (i) for at least thirty nine (39) dwelling units, lbe annual rental rate at the time of initial occupancy of the Qualifying Resident household shall not exceed an Affordable Rent for a very low income household adjusted for family size; and (Ii) for not more lban forty (40) dwelling units, the annual rental rate at the time of initial occupancy of the Qualified Resident household shall not exceed an Affordable Rent for a lower income household, adjusted for family size. (b) During the time when lbe State TCAC Regulatory Agreement is in effect, the Developer shall establish and maintain rental levels for the dwelling units in the Project at annual rental rates which do not exceed an amount an annual rent for the dwelling units which exceed an Affordable Rental for such dwelling units as mandated by the State TCAC Regulatory Agreement. In lbe event of any conflict between lbe Affordable Rent amount as may be charged by the Developer under the State TCAC Regulatory Agreement and the Affordable Rent amount as may be charged by the Developer under Section 7(a) of this Agency Regulatory Agreement, the provisions of the State TCAC Regulatory Agreement shall prevail. Section 8. Covenants to Run With the Land. The Developer and lbe Agency hereby declare their specific intent that the covenants, reservations and restrictions set forth herein are part of a plan for the promotion and preservation of affordable housing for senior citizen households within the territorial jurisdiction of the Agency and that each shall be deemed covenants running with lbe land and shall pass to and be binding upon the Site and each successor-in- interest of the Developer in the Site for the Term. The Developer hereby expressly assumes lbe duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in this Agency Regulatory Agreement. Each and every contract, deed or other instrument hereafter 29 07-29-09 Meta Housing - DDA CDC/2009-39 executed covering or conveying the Site or any interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument. Section 9. Burden and Benefit. The Agency and the Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the Developer's legal interest in the Site is affected by the affordable dwelling use and occupancy covenants hereunder. The Agency and the Developer hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Site by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the affordable housing goals and objectives of the Agency and in order to make the Site available for acquisition by the Developer. Section 10. Term. (a) The provisions ofthis Agency Regulatory Agreement shall apply to the Site for a term of sixty (60) years following the date of recordation of this Agency Regulatory Agreement. (b) Any provision or section of this Agency Regulatory Agreement may be terminated upon written agreement by the Agency and the Developer if the Agency in its reasonable discretion determines that such a termination will not adversely affect the affordable housing goals of the Agency. Section II. DEFAULTS. 11.1 Events of Default. The occurrence of any of the following is a default and shall constitute a material breach of this Agency Regulatory Agreement and, if not corrected, cured or remedied in the time period set forth in Section 11.2, shall constitute an "Event of Default" hereunder; (I) an uncured breach or default by the Developer under the 2009 DDA; (2) failure of the Developer or any person under its direction or control to comply with or perform when due any material term, obligation, covenant or condition contained in this Agency Regulatory Agreement; (3) any warranty, representation or statement made or furnished to the Agency by the Developer under this Agency Regulatory Agreement or the 2009 DDA is false or misleading in any material respect either now or at the time made or furnished; (4) the dissolution or termination of the existence of the Developer as an ongoing business, insolvency, appoint of a receiver for any part of the property of the Developer, anyassigmnent for the benefit of creditors, any type of creditor workout or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the Developer. 30 07-29-09 Meta Housing - DDA CDC/2009- 39 11.2 Notice of Default. The Agency shall give written notice of default to the Developer in accordance with Section 17, stating that such notice is a "Notice of Default", specifying the default complained of by the Agency and requiring the default to be remedied within thirty (30) days of the date of the Notice of Default. Except as required to protect against further material damage, the Agency may not institute legal proceedings against the Developer until thirty (30) days after giving notice. Failure or delay in giving notice shall not constitute a waiver of any default, nor shall it change the time of occurrence of the default. If the default specified in the Notice of Default is such that it is not reasonably capable of being cured within thirty (30) days, and if the Developer initiates corrective action within said thirty (30) day period and diligently works to effect a cure as soon as possible, then the Developer may have such additional time as authorized in writing by the Agency as reasonably necessary to complete the cure of the breach prior to exercise of any other remedy for the occurrence of an Event of Default. Such authorization for additional time to cure shall not be unreasonably withheld. If the Developer fails to take corrective action relating to a default within thirty (30) days following the date of notice (or to complete the cure within the additional as may be authorized by the Agency), an Event of Default shall be deemed to have occurred. 11.3 Inaction Not a Waiver of Default. Any failure or delays by the Agency in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by the Agency in asserting any of its rights and remedies shall not deprive the Agency of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 11.4 Remedies. Upon the occurrence of an Event of Default, the Agency shall, in addition to the remedial provisions of Section 6 as related to a Maintenance Deficiency at the Site, be entitled to seek any appropriate remedy or damages by initiating legal proceedings as follows: (i) by mandamus or other suit, action or proceeding at law or in equity, to require the Developer to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights ofthe Agency; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of the Developer to the Agency. 11.5 Rights and Remedies are Cumulative. The rights and remedies ofthe Agency as set forth in this Section II are cumulative and the exercise by the Agency of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the Developer. 11.6 Enforcement by Third Parties. Except for the City of San Bernardino, which shall have the power to enforce this Agency Regulatory Agreement as the successor ofthe Agency, and "residents" and "applicants", as each of these terms are defined in Health and Safety Code Section 33334.3(f)(7), no third party shall have any right or power to enforce any provision of this Agency Regulatory Agreement on behalf of the Agency or to compel the Agency to enforce any provision of this Agency Regulatory Agreement against the Developer or the Project. 31 07-29-09 Meta Housing. DDA CDC/2009-39 Section 12. Governing Law. This Agency Regulatory Agreement shall be governed by the laws of the State of California. Section 13. Amendment. This Agency Regulatory Agreement may be amended after its recordation only by a written instrument executed by the Developer and by the Agency. Section 14. Attornev's Fees. In the event that a party brings an action to enforce any condition or covenant, representation or warranty in this Agency Regulatory Agreement or otherwise arising out of this Agency Regulatory Agreement, the prevailing party in such action shall be entitled to recover from the other party reasonable attorneys' fees to be fixed by the court in whichajudgment is entered, as well as the costs of such suit. For the purposes ofthis Section 14, the words "reasonable attorneys' fees" in the case of the Agency, include the salaries, costs and overhead of the lawyers employed in the Office of the City Attorney of the City of San Bernardino who provide legal counsel to the Agency in such an action, as allocated on an hourly basis. Section 15. Severabilitv. If any provision of this Agency Regulatory Agreement shall be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such invalidity or unenforceability of such provision shall not affect the remaining parts of this Agency Regulatory Agreement which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable. Section 16. Time is of the Essence. For each provision of this Agency Regulatory Agreement which states a specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed to be of the essence. Section 17. Notice. Any notice required to be given under this Agency Regulatory Agreement shall be given by the Agency or by the Developer, as applicable, by personal delivery or by First Class United States mail at the addresses specified below or at such other address as may be specified in writing by the parties hereto: If to the Agency: Redevelopment Agency of the City of San Bernardino 20 I North "E" Street, Suite 301 San Bernardino, California 92401 Attn: Executive Director Phone: (909) 664-1044 32 07-29-09 Meta Housing. DDA CDC/2009-39 If to the Developer; Notice shall be deemed given five (5) calendar days after the date of mailing to the party, or, if personally delivered, when received by the Executive Director of the Agency or the Developer, as applicable. Section 18. Prioritv of State TCAC Regulatorv Agreement and Construction Loan DocumentslPermanent Loan Documents. (a) During the period of time when the State TCAC Regulatory Agreement, and initially the Construction Loan Documents and then the State TCAC Regulatory Agreement and the Permanent Loan Documents are in effect with respect to the Project as evidenced by the recorded "Agency Subordination Agreement for Project Financing", as this term is defined in the 2009 DDA, compliance by the Developer with the requirements of the State TCAC and Construction Loan Documents and/or the State TCAC Regulatory Agreement and Permanent Loan Documents, as applicable, with respect to Affordable Rents, shall be deemed compliance by the Developer with the Affordable Rent requirements of this Agency Regulatory Agreement. (b) Compliance by the Developer with the State TCAC Regulatory Agreement by and between the Developer and State TCAC which may hereafter affect the Project shall be deemed to be in compliance by the Developer with Affordable Rent provisions ofthis Agency Regulatory Agreement during the time when such State TCAC Regulatory Agreement is in effect with respect to the Site and the Project. (c) This Agency Regulatory Agreement may be amended as set forth in the 2009 DDA to accommodate the affordable senior citizen housing development loan and/or grant financing underwriting requirements of State TCAC and/or the Construction Lender and/or the Permanent Lender, or another instrumentality of the State of California, as applicable. Such amendment shall be initiated upon the written request of the Developer and such lender and shall be executed by the parties hereto. Any such amendment or modification shall be valid, binding and legally enforceable only if in written form and executed by the parties hereto and only after the approval thereof by official action of the Agency, the Developer and such lender. [EDITOR'S NOTE: THE TEXT OF THIS REGULATORY AGREEMENT IS PRESENTED IN DRAFT FORM AS PART OF ATTACHMENT NO.9 TO THE 2009 ACQUISITION, DISPOSITION AND DEVELOPMENT AGREEMENT. THE FINAL FORM OF THIS REGULATORY AGREEMENT SHALL BE SUBJECT TO THE JOINT REVIEW AND APPROVAL BY THE PARTIES OF THE SPECIFIC TERMS ON WHICH THE AFFORDABLE RENTAL HOUSING DEVELOPMENT PROJECT RESERVED FOR OCCUPANCY BY SENIOR CITIZEN HOUSEHOLDS, MAY BE UNDERTAKEN BY (MAGNOLIA HIGHLAND, L.P.) THE DEVELOPER, AS PART OF THE PROJECT. THE FINAL TEXT OF THE REGULATORY AGREEMENT IS ALSO SUBJECT TO THE APPROVAL BY THE PARTIES OF THE CONDITIONS OF THE STATE TCAC REGULATORY AGREEMENT FOR THE PROJECT.] 33 07-29"()9 Meta Housing. DDA CDC/2009-39 IN WITNESS WHEREOF, the Developer and the Agency have caused this Agency Regulatory Agreement to be signed, acknowledged and attested on their behalf by duly authorized representatives in counterpart original copies which shall upon execution by all of the parties be deemed to be one original document. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Chair Date: By: Executive Director Approved As To Form: Agency Counsel DEVELOPER Executed this _ day of ,200 Magnolia Highland, L.P., a California limited partnership By: Magnolia Highland, LLC, a California limited liability company Its: Administrative General Partner By: John M. Huskey Manager 34 07-29.09 Meta Housing - DDA Approved As To Form: Legal Counsel for Developer 07-29-09 Meta Housing - DDA CDC/2009-39 By: Western Corrununity Housing, Inc., a California non-profit public benefit Corporation Its: Managing General Partner By: Graham Espley-Jones President By: Leanne Truofreh Secretary 35 CDC/2009-39 EXHIBIT "A" Legal Description of the Site 36 07-29~09 Meta Housing - DDA 07-29-09 Meta Housing - DDA CDC/2009-39 EXHIBIT "B" Scope of Development and Site Improvement Plan 37 07-29-09 Meta Housing - DDA CDC/2009-39 EXHIBIT "c" Schedule of Performance (During Construction of the Project) 38 CDC/2009- 39 Attachment No. 10 AGENCY LOAN NOTE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (Magnolia Highland, L.P.) Borrower: Lender: Magnolia Highland, L.P. Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Principal Amount: $4,000,000 Date of Promissory Note: , 2009 (To Be Inserted By Escrow Agent) Rate oflnterest 3% Maturity Date of Promissory Note: (See: Section 2.8(b) of2009 DDA) PROMISE TO PAY. Magnolia Highland, L.P., a California limited partnership (the "Borrower") promises to pay to the Redevelopment Agency of the City of San Bernardino (the "Agency" or "Holder"), or order, in lawful money of the United States of America, the principal sum of Four Million Dollars ($4,000,000) as disbursed to the Borrower under the terms ofthe "Agency Loan", as this term is defined in that certain 2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Agreement (Magnolia Highland, L.P.), dated as of June I, 2009, by and between the Borrower and the Agency (the "2009 DDA"), together with interest on the unpaid outstanding principal balance of this Promissory Note. INDEBTEDNESS. This Promissory Note evidences the indebtedness of the Borrower to the Agency under the terms and conditions of the Agency Loan as provided for in the 2009 DDA. This Promissory Note is referred to in the 2009 DDA as the "Agency Loan Note". The Maturity Date of this Promissory Note is the fifty-fifth (55th) armiversary following the date the Project is completed. Capitalized terms not otherwise defined herein shall have the meanings set forth in the 2009 DDA. A copy of the 2009 DDA is on file with the Agency Secretary as a public record of the Agency. PAYMENT. Notwithstanding the foregoing, Borrower will pay this Promissory Note prior to its maturity date, as provided in Section 2.8 of the 2009 DDA on or before the fifth (5th) anniversary following its date in the event that the "Site Transfer Escrow" as this term is defined in the 2009 DDA, may fail to close for any reason other than a default by the Agency. In the event the Site Transfer Escrow is completed, this Agency Loan Note shall automatically convert to a long-term note, and commencing upon closing and funding of the Permanent Loan, Borrower shall make payments, in armual installment amounts from 39 07~29-09 Meta Housing. DDA CDC/2009-39 "Residual Rental Receipts ofthe Project", as the term is defined below with the first such installment due on the last business day of the "Project Operating Year," as defined in the 2009 DDA, (each such date referred to as a "scheduled debt service payment") until the Maturity Date or repayment in full of all outstanding principal and accrued and unpaid interest under the Agency Loan. Each such annual installment shall be an amount of principal and interest based upon the amount of Residual Rental Receipts of the Project available to the Borrower as of each scheduled debt service payment date as set forth below and continuing through the Maturity Date. If on any scheduled debt service payment date Residual Rental Receipts of the Project in an amount sufficient to make a scheduled debt service payment in full is not available on such a date, the portion of such scheduled debt service payment not then paid (the "deficiency debt service amount") shall be carried forward to the next following scheduled debt service payment date, and then on such following scheduled debt service payment date, the balance of the deficiency debt service amount carried forward shall be paid first and the scheduled debt service payment shall be paid second. On the Maturity Date, a balloon payment of the remaining principal balance and accrued and unpaid interest shall be due and payable, if such amount has not been paid in full prior to the Maturity Date. Borrower will make all payments of interest and principal to the Agency at the address of the Agency: 201 North "E" Street, Suite 30 I, San Bernardino, California, or at such other place as the Agency may designate in writing. Unless otherwise agreed to by the Agency in writing or required by applicable law, payments will be applied first to any unpaid collection costs, then to any late charges, then to any unpaid interest, and any remaining amount will be applied to principal. . The term "Residual Rental Receipts of the Project" and "Residual Rental Receipts" and "Residual Receipts" mean and refer to fifty percent (50%) of"Revenues" of the Developer remaining on any scheduled debt service date or other payment date under the Agency Loan Note, reduced in the following order: (1) Operating Expenses calculated on a cash basis; (2) debt services on senior debt secured by the senior position deeds of trust; (3) cash payments to any reserves required by the Tax Credit Limited Partnership Agreement or the documents evidencing the Construction Loan and/or the Permanent Loan; (4) repayment of general partner loans; (5) cash payments of deferred Developer fees; and (6) partnership management fees and asset management fee each Project operating year up to Fifteen Thousand Dollars ($15,000) in the aggregate, increasing by three percent (3%) annually. . "Operating Expenses" shall mean actual, approved reasonable and customary costs, fees and expenses directly attributable to the operation, recordkeeping, maintenance, taxes and management of the Project, including but not limited to, a commercially reasonable property management fee; taxes and assessments; payroll and payroll taxes for property employees; insurance; security, painting, cleaning, repairs, and alterations; landscaping; sewer charges; utility charges; advertising, promotion and publicity; cable television, satellite and other similar services; office, janitorial, 40 07-29-09 Meta Housing - DDA CDC/2009-39 cleaning and building supplies; approved recreational amenities and supplies; purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishing; fire alarm monitoring; fees and expenses of accountants, attorneys, consultants and other professionals. Expenses for the purpose of calculating residual receipts are subject to Agency's reasonable approval and shall be calculated on a cash basis. Depreciation and debt service payments are not eligible operating expenses for calculating residual receipts. . "Revenue" with respect to a particular fiscal year shall mean all revenue, income, receipts, and other consideration actually received from the operations of the Project. Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance (if not used to replace or repair the Project or repay any permitted financing); and condemnation awards for a taking of part of all of the Project for a temporary period. Revenue shall also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion ofthe Project. Revenue shall not include tenants' security deposits, interest on security deposits, loan proceeds, capital contributions or similar advances, amounts released from reserves or interest on reserves provided that such reserves and interest are used for the purposes for which the reserves were established. INTEREST RATE. Interest shall accrue on the outstanding principal balance of this Promissory Note at a fixed rate of interest. The rate of interest which shall accrue on the unpaid principal balance of this Promissory Note from its date through the Maturity Date shall be [three percent (3%)] per annum until paid in full. Interest on this Promissory Note is computed on a 365/360 simple interest basis; that is, by applying the ratio of the annual interest rate over a year of360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Interest which may accrue prior to the first scheduled debt service payment under this Promissory Note shall be capitalized as of the day immediately preceding the due date of such first scheduled debt service payment. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed under this Promissory Note earlier than it is due. LATE CHARGE. If a payment is ten (10) calendar days or more late, Borrower will also be charged (in addition to the annual installment amount past due) five percent (5%) ofthe annual payment amount as a late charge. DEFAULT. Borrower will be in default if any of the following happens: (a) Borrower fails to make any payment when due under this Promissory Note. (b) Borrower fails to make any other payment when due under the 2009 DDA. (c) Borrower breaks any promise Borrower made to the Agency in the 2009 DDA, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Promissory Note or any agreement related to this Promissory Note. 41 07-29-09 Meta Housing. DDA CDC12009-39 (d) Borrower defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Promissory Note or the ability of Borrower to perform its other obligations under this Promissory Note or the Agency Deed of Trust and the Collateral Assignment of Leases and Rents. (e) Any representation or statement made or furnished to the Agency by Borrower or on Borrower's behalf under the 2009 DDA is false or misleading in any material respect either now or at the time made or furnished. (I) Any creditor tries to take any of Borrower's property on or in which the Agency has a lien or security interest. (g) A material adverse change occurs in Borrower's financial condition, or the Agency believes the prospect of payment or performance of the indebtedness evidenced by this Promissory Note is materially impaired. If any default (other than a default described in (a), (b) or (e), above) is curable, such a default may be cured (and in such event no default will be deemed to have occurred) if Borrower, after receiving written notice from the Agency demanding cure of such default: (i) cures the default within ten (10) calendar days; or (il) if the cure requires more than ten (10) calendar days, immediately initiates steps which the Agency deems in its sole discretion to be sufficient to cure the default, and thereafter Borrower continues and RIGHTS OF THE HOLDER. Upon default by the Borrower, the Agency may exercise any of its rights provided under the 2009 DDA and the "Agency Loan", as this term is defined in the 2009 DDA, including, without limitation, the declaration by the Agency or the holder in due course of this Promissory Note (the "Holder") that the entire unpaid principal balance of this Promissory Note and all accrued unpaid interest is immediately due and payable, without notice. Upon the failure of the Borrower to pay all amounts declared due pursuant to this paragraph entitled "RIGHTS OF THE HOLDER," including failure to pay at the Maturity Date, the Holder, at its option, may also, if permitted under applicable law, increase the interest rate on this Promissory Note for interest which accrues after the date such amount is declared due, to the rate of eight percent (8%) per annum. The Holder may hire or pay someone else to help collect this Promissory Note, ifthe Borrower does not pay. The Borrower will pay the Holder the amount of any and all such collection related expenses, including without limitation, subject to any limits under applicable law, the Holder's reasonable attorneys' fees, whether or not there is a lawsuit, including, without limitation, reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any post-judgment collection services. The Borrower also will pay any court costs, in addition to all other sums provided by law. This Promissory Note has been delivered to the Holder and accepted by the Holder in the State of California. If there is a lawsuit arising under this Promissory Note, the Superior Court of the State of California in San Bernardino County shall have jurisdiction of such lawsuit. This Promissory Note shall be governed by and construed in accordance with the laws of the State of California. 42 07.29-09 Meta Housing - DDA CDC/2009-39 COLLATERAL. The Borrower acknowledges that the Initial Advance this Promissory Note is secured by the Meta Housing Corporation Guaranty, as this term is defined in the 2009 DDA, and that concurrently upon the "Close of the Site Transfer Escrow", as defined in the 2009 DDA, the Meta Housing Corporation Guaranty shall be released and this Promissory Note shall be secured by the Agency Loan Deed of Trust that shall be recorded by the Agency concurrent with the Close ofthe Site Transfer Escrow. The Agency Loan Deed of Trust is subordinate to the security interest ofthe Construction Lender and the Permanent Lender. The obligation of the Borrower to timely pay the Agency the amounts due under this Promissory Note is assignable by the Borrower to its transferee in the Property upon thirty (30) days prior written notice to the Agency in which the Borrower and the assignee each certifY to the Agency that as part of such sale, lease, or transfer of the Property, the assignee of the Borrower shall also assume the obligations of the Borrower under the note held by the Construction Lender or the Permanent Lender, as then applicable. The Agency Loan Deed of Trust affects certain real property described in the 2009 DDA as the "Property" and/or the "Project". The Agency Loan Deed of Trust contains the following provisions: "THE LENDER MAY, AT ITS OPTION, DECLARE IMMEDIA TEL Y DUE AND PAYABLE ALL SUMS SECURED BY THIS DEED OF TRUST UPON THE OCCURRENCE OF A SPECIAL EVENT OF ACCELERATION, AS THIS TERM IS DEFINED BELOW: During the period of time when the security interests of the Senior Lender encumbers the Property under the Senior Lender Documents, a "special event of acceleration" shall occur when there is a conveyance of the Property without the consent in writing of the Lender (except for a Permitted Transfer as set forth in the DDA), of any right, title or interest in the Property to any person, whether such sale, refinancing or transfer is legal, beneficial, or equitable, whether voluntary or involuntary, whether by sale, deed or installment sale contract, land contract, lease option contract, or by sale, assignment or transfer of any beneficial interest ofthe Trustor in the Property to any land trust, and when as part of such conveyance, the security interest of the Senior Lender or its assignee in the Property is released and reconveyed to the Trustor by the Senior Lender, or its assignee. Any such conveyance which is permitted under the Senior Lender Documents shall not be deemed to be a special event of acceleration. Initials of Trustor" GENERAL PROVISIONS. Except as set forth in the next sentence of this paragraph, following the date on which the Site Transfer Escrow is closed under the 2009 DDA, upon the failure to pay any sum provided for in this Promissory Note when due, or a material breach of the 2009 DDA or the Agency Loan Deed of Trust by the Borrower, no partner of the Borrower (or in the case of an assignee of the Borrower- no affiliate, member, partner, shareholder or subsidiary of such assignee) shall have personal liability for payment of the principal or interest then due under this Promissory Note. The sole recourse of the Holder to recover any sum under this Promissory Note shall be to the Property subject to the Agency Loan Deed of Trust, except in the event of: (A) fraud by the Borrower (or its assignee), (B) any material misrepresentation made by the Borrower to the Agency under the 2009 DDA, (C) misappropriation by the Borrower (or its assignee) of any rents, security deposits, tax collection amounts, security deposits, or insurance or condemnation awards, (D) commission of bad faith waste by the Borrower (or its assignee) or 43 07-29-09 Meta Housing - DDA CDC/2009- 3 9 (E) the presence of "Hazardous Substances" on the Property, as this tenn is defined in the Agency Loan Deed of Trust. The Holder may delay or forego enforcing any of its rights or remedies under this Promissory Note without losing them. Borrower and any other person who signs, guarantees or endorses this Promissory Note, to the extent allowed by law, each waive any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor. Upon any change in the tenns of this Promissory Note, and unless otherwise expressly stated in writing, no party who signs this Promissory Note, shall be released from liability. All such parties agree that the Holder may renew or extend (repeatedly and for any length oftime) this Promissory Note, or release any party, or collateral; orimpair, fail to realize upon or perfect the Holder's security interest in the collateral; and take any other action deemed necessary by the Holderin its sole discretion without the consent of or notice to anyone. All such parties also agree that the Holder may modify this Promissory Note and/or the Loan Agreement without the consent of or notice to anyone other than the party with whom the modification is made. All defined words, tenns or phrases indicated by initial capital letters used in this Promissory Note and not specifically defined in this Promissory Note shall have the meanings ascribed to them in the 2009 DDA. Upon the closing of the Site Transfer Escrow, this Promissory Note shall be a nonrecourse obligation of Borrower. Neither Borrower nor any other party, including, without limitation, any partner (general or limited) of Borrower, shall have personal liability for repayment of this Agency Loan. The sole recourse of Agency for any obligation of Borrower under this Note shall be the exercise of the Agency's rights against the Property. 1// /1/ 1// /1/ /1/ 44 07-29-09 Meta Housing - DOA CDC12009-39 PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER HAS READ AND UNDERSTANDS ALL OF ITS PROVISIONS. BORROWER AGREES TO THE TERMS OF THIS PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COPY HEREOF. BORROWER Magnolia Highland, L.P. a California limited partnership By: Magnolia Highland, LLC, a California limited liability company Its: Administrative General Partner By: John M. Huskey Manager By: Western Community Housing, Inc. a California non-profit public benefit Corporation Its: Managing General Partner By: Graham Espley-Jones President By: Leanne Truofreh Secretary 45 07-29-09 Meta Housing. DDA CDC/2009-39 Attachment No. 11 Agency Loan Deed of Trust RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the City of San Bernardino 201 North "E" Street. Suite 30 I San Bernardino, California 92401 SUBORDINATE DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (Agency Loan Deed of Trust) THIS SUBORDINATE DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ("Deed of Trust") is made as of , by Magnolia Highland, L.P., a California limited partnership (hereinafter referred to as "Trustor"), whose address is , to Title Insurance Company (hereinafter referred to as "Trustee"), whose address is ,for the benefit of the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic, its successors and assigns (herein called "Beneficiary"), whose address is 201 North "E" Street, Suite 301, San Bernardino, California 92401. , is a limited partner of the Trustor (the "Investor Limited Partner") pursuant to that certain Limited Partnership Agreement dated (the "Partnership Agreement"). WITNESSETH That Trustor, for valuable consideration, grants, bargains, sells, conveys and warrants to Trustee, in trust with power of sale, that property in the City of San Bernardino, County of San Bernardino, State of California, more particularly described in Exhibit "A" attached hereto and made a part hereof (the "Land"), together with the following described estate, property and rights of Trustor in the Land and/or in any improvements now or hereafter constructed thereon (herein severally and collectively referred to as the "Property") as security for the performance of each covenant and agreement of Trustor contained herein and in all other instruments executed in connection herewith, and for the payment of all sums of money secured hereby. A. All the fee and leasehold estates and rights of Trustor now held and hereafter acquired in and to the Property and in and to land lying in streets and roads adjoining the Property, and all access rights and easements appertaining thereto; and B. All buildings, structures, improvements, furnishings, fixtures and equipment, real, personal and mixed, now or hereafter attached to, or used or adapted for use in the operation of the 46 07.29-09 Meta Housing - DDA CDC/2009-39 Property and any and all replacements and additions thereto, including without limitation, all heating apparatus and equipment whatsoever, all boilers, engines, motors, dynamos, generating equipment, pumps, piping and plumbing fixtures, cooling, ventilating, sprinkling, fire-extinguishing apparatus, gas and electric fixtures, elevators, escalators, partitions, and shrubbery and plants; and including also all interest of any owner of the Property in any of such items hereafter at any time acquired under conditional sales contract, chattel mortgage or other title-retaining or security instrument, all of which property mentioned in this paragraph shall be deemed part of the realty and not severable wholly or in part without material injury to the freehold; and C. All and singular the lands, tenements, privileges, water, water rights, water stock, mineral, oil and gas rights, hereditaments and appurtenances thereto belonging or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, royalties, issues and profits thereof, and all the estate, rights, title, claim, interest and demand whatsoever of the Trustor either in law or equity, of, in and to the Property, whether now held or hereafter acquired; D. All ofthe right, title and interest of Trustor now or hereafter existing in and to the following now or hereafter located in, upon, within or about or used in connection with the construction, use, operation or occupancy of the Property and/or the improvements thereon and any business or activity conducted thereon or therein, together with all accessories, additions, accessions, renewals, replacements and substitutions thereto or therefor and the proceeds and products thereof; (i) all materials, supplies, furniture, furnishings, appliances, office supplies, equipment, construction materials, vehicles, machinery, computer hardware and software, maintenance equipment, window washing equipment, repair equipment and other equipment and tools, telephone and other communications equipment; (Ii) all books, ledgers, records, accounting records, files, tax records and returns, policy manuals, papers, correspondence, and electronically recorded data; (iii) all "General Intangibles" (as such term is defined in the California Uniform Commercial Code), instruments, money, "Accounts," (as such term is defined in the California Uniform Commercial Code), accounts receivable, notes, certificates of deposit, chattel paper, letters of credit, choses in action, good will, rights to payment of money, rents, rental fees, equipment fees and other amounts payable by persons who utilize the Property or any of the improvements or paid by persons in order to obtain the right to use the Property and any of the improvements, whether or not so used; trademarks, service marks, trade dress, tradenames, licenses, sales contracts, deposits, plans and specifications, drawings, working drawings, studies, maps, surveys; soils, environmental, engineering or other reports, architectural and engineering contracts, construction contracts, construction management contracts, surety bonds, feasibility and market studies, management and operating agreements, service agreements and contracts, landscape maintenance agreements, security service and other services agreements and vendors agreements; (iv) all compensation, awards and other payments or relief (and claims therefor) made for a taking by eminent domain, or by any event in lieu thereof (including, without limitation, property and rights and interests in property received in lieu of any such taking), of all or any part of the Property (including without limitation, awards for severance damages), together with interest thereon, and any and all proceeds (or claims for proceeds) of casualty, liability or other insurance pertaining to the Property, together with interest thereon; (v) any and all claims or demands against any person with respect to damage or diminution in value to the Property or damage or diminution in value to any business or other activity conducted on the Property; (vi) any and all security deposits, deposits of security or advance payments made to others with respect to: (I) insurance policies relating to the Property; (2) taxes or assessments of any kind or nature affecting the Property; (3) utility services for the Property and/or the improvements; (4) maintenance, repair or similar services for the Property or any other 47 07-29-09 Meta Housing - DDA CDC/2009-39 services or goods to be used in any business or other activity conducted on the Property; (vii) any and all authorizations, consents, licenses, permits and approvals of and from all persons required from time to time in connection with the construction, use, occupancy or operation of the Property, the improvements, or any business or activity conducted thereon or therein or in connection with the operation, occupancy or use thereof, (viii) all warranties, guaranties, utility or street improvement bonds, utility contracts, telephone exchange numbers, yellow page or other directory advertising and the like; (ix) all goods, contract rights, and inventory; (x) all leases and use agreements of machinery, equipment and other personal property; (xi) all insurance policies covering all or any portion of the Property; (xii) all reserves (including those provided for in Section 17 hereof) and funds held in escrow by Beneficiary or other person for Beneficiary's benefit and any funds deposited with Beneficiary, all accounts into which such funds are deposited and all accounts, contract rights and general intangibles or other rights relating thereto; (xiii) all names by which the Property is now or hereafter known; (xiv) all interests in the security deposits of tenants; (xv) all management agreements, blueprints, plans, maps, documents, books and records relating to the Property; (xvi) the proceeds from sale, assigmnent, conveyance or transfer of all or, any portion of the Property or any interest therein, or from the sale of any goods, inventory or services from, upon or within the Property and/or the improvements (but nothing contained herein shall be deemed a consent by Beneficiary to such sale, assigmnent, conveyance or transfer, except as expressly provided in this Deed of Trust); (xvii) any property described in paragraph B, above, which are not fixtures under California law; (xviii) all other property (other than fixtures) of any kind or character as defined in or subject to the provisions of the California Uniform Commercial Code, Secured Transactions, as amended and; (xix) all proceeds of the conversions, voluntarily or involuntarily, of any of the foregoing into cash or liquidated claims. TO HAVE AND TO HOLD the Property, together with all and singular the lands, tenements, privileges, water, water rights, water stock, mineral, oil and gas rights, hereditaments and appurtenances thereto belonging or in any wise appertaining, and the reversion and reversions, remainder and remainders, rents, royalties, issues and profits thereof, and all of the estate, right, title, claims and demands whatsoever ofthe Trustor, either in law or in equity, of, in and to the Property, forever as security for the faithful performance ofthe Note (as defined below) secured hereby and as security for the faithful performance of each and all of the covenants, agreements, terms and conditions of this Deed of Trust, and in all other instruments executed in connection herewith, SUBJECT, HOWEVER, to the right, power and authority given to and conferred upon Beneficiary to collect and apply such rents, issues and profits. This Deed of Trust also constitutes a security agreement in all of the property above described or referenced in which such interest may be created under the California Uniform Commercial Code and for such purposes Trustor hereby grants to Beneficiary a security interest therein. I. Note Secured. This Deed of Trust is made for the purpose of securing the performance of each covenant, agreement and obligation of Trustor herein and of each covenant, agreement and obligation of Trustor described as the Agency Loan in that certain 2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Grant Agreement (Magnolia Highland, L.P.), dated as of June 1,2009, by and between the Trustor and the Beneficiary (the "2009 DDA") as evidenced by the Agency Loan Note (the "Note") and all interest thereon and other amounts evidenced thereby; all future advances made to Trustor by Beneficiary, its successors and assigns, under the Note or pursuant to the terms of this Deed of Trust or the 2009 DDA; the obligations evidenced by all renewals, extensions, modifications, substitutions and conditions of the Note; and any and all other obligations of Trustor to Beneficiary, its successors and assigns, now existing and hereafter arising and which are at any 48 07.29-09 Meta Housing. DDA CDC/2009-39 time specifically declared by Beneficiary in writing to be secured by tbis Deed of Trust or which specifically indicate in tbe instruments which evidence the same that they are intended to be so secured. Unless otherwise indicated in this Deed of Trust, the meaning of defined terms and phrases as denoted by an initial capitalized letter in a word or phrase, shall be tbe same as set forth in the 2009 DDA. 2. Trustor's Covenant ofPavment. Trustor shall perform all of its obligations under the Note, tbe 2009 DDA and under tbis Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay tbe Note, and all otber debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 3. Trustor's Warranties of Title. Trustor warrants to Beneficiary that it is the sole holder of fee simple absolute title to all of the Property and that except as set forth in this Deed of Trust, the Note and the 2009 DDA relative to the Senior Lender Documents said title is marketable and free from any lien or encumbrance, unless approved in writing by Beneficiary, and the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that except as required under the 2009 DDA and/or the Senior Lender Documents, Trustor will keep the Property free from all liens of any kind, including, witbout limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiary's prior written consent; that Trustor has good right to make tbis Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the autbority to do so; and that Trustor will forever warrant and defend Beneficiary's interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 4. Trustor's Right to Contest Statutory Liens. As used herein the words "mechanic's lien" and "materialmen's lien" means and includes a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialmen's lien against the Property or a stop notice against the Trustor or the Beneficiary and/or funds held by or owed to the Trustor for the improvement ofthe Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Note, tbe 2009 DDA or tbis Deed of Trust; (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a California admitted surety acceptable to Beneficiary in an amount not less than tbe entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiary and pays for an endorsement to Beneficiary's title insurance policy, in a form satisfactory to Beneficiary, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and witb due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any judgment rendered for tbe lien claimant witbin ten (10) days following entry of any such judgment. 5. Maintenance and Inspection ofImprovements. Trustor shall maintain tbe buildings and other improvements now or hereafter located on tbe Property in a first class condition and state of repair, reasonable wear and tear excepted. Trustor shall not commit or suffer any waste; shall promptly comply witb all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting tbe Property or tbe use thereof, and shall pay all fees or charges of any kind in connection therewith. 49 07-29-09 Meta Housing. DDA CDC/2009-39 6. Construction and Repairs. Trustor shall complete or restore promptly and in a good and workmanlike manner any building or improvement that may be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7. Alterations. No building or other improvement on the Property shall be structurally altered, removed or demolished without the Beneficiary's prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiary's prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiary. 8. Compliance With Laws. Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy ofthe Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any improvements on or related to the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenants. Representations. Warranties and Indemnitv. (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any improvements on or about the Property. (b) Trustor shall, at its sole expense, comply and cause each tenant leasing space within the Property to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined herein below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Property to assure and monitor continued compliance by Trustor and each tenant leasing space in the Property with all such laws, regulations, codes and ordinances. (c) Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, certifYing that the Property is not now being used nor has it ever been used for any Environmental Activities. Beneficiary reserves the right, in its reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property for Hazardous Materials. Trustor hereby grants to Beneficiary, its agents, employees, consultants and contractors the right to enter upon the Property to perform such tests as are reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notifY Beneficiary of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiary a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to 50 07-29-09 Meta Housing - DDA CDC/2009-39 take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiary a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiary may reasonably request. The plan shall be subject to Beneficiary's written approval, which approval may be granted or withheld in Beneficiary's sole but reasonable discretion. Beneficiary shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiary. If Beneficiary disapproves the plan, Beneficiary's notice to Trustor of such disapproval shall include a brief explanation ofthe reasons therefor. Trustor shall submit to Beneficiary a revised final written environmental plan that remedies the defects identified by Beneficiary as reasons for Beneficiary's disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiary within said thirty (30) day period, or if such revised plan is submitted to Beneficiary and Beneficiary disapproves said plan, such failure or disapproval shall, at Beneficiary's option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiary does not notifY Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiary of Beneficiary's failure to respond, at which time Beneficiary shall have an additional forty-five (45) days after receipt of such notice from Trustor to notify Trustor of its approval or disapproval of the final plan within said additional forty- five (45) day period. If Beneficiary fails to notifY Trustor of its disapproval or approval of said plan within said forty-five (45) day period the plan shall be deemed approved. Once any such plan is approved in writing or deemed approved by Beneficiary, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiary, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiary with respect to the approval or disapproval of the environmental plan set forth herein and the actions of Beneficiary pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiary a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiary, a report, satisfactory to Beneficiary, specifYing any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Property. Beneficiary reserves the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property. Trustor hereby grants to Beneficiary, its agent, employees, consultants and contractors the right to enter upon the Property and to perform such tests as Beneficiary deems are necessary to conduct such a review and/or investigation. Beneficiary shall hold in confidence any report delivered by Trustor to Beneficiary pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiary to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiary, (c) regulatory officials having jurisdiction over Beneficiary who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiary's or any participant's interests hereunder. 51 07-29-09 Meta Housing - DDA CDC/2009-39 "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by-products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 V.S.c. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33 V.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 V.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 V.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 ofthe California Health & Safety Code or as "hazardous substances" in Section 253 16 ofthe California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor ofthe State ofCalifomia pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. Hazardous Materials shall exclude substances routinely used in the construction, development, and operation of residential rental housing provided that such substances are used in accordance with all applicable laws. "Enviromnental Laws" as used herein shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. "Enviromnental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. (f) Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiary's choice), Beneficiary, its successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee", and collectively, the "Indemnitees") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Enviromnental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiary: (i) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or on, in, under or affecting all or any portion of any property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; 52 07-29.09 Meta Housing - DDA CDC/2009- 39 (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Property or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Property or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Property including, without limitation, all Environmental Laws; (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters described herein in connection with the Property or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Property or any other property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (vi) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Property of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Property or any portion thereof; (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Property or into the air, any body of water, any other public domain or any property adjacent or proximate to the Property; (viii) Any failure of any Hazardous Materials generated or moved from the Property to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any ofits covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust or any ofthe other Transaction Documents. The indemnity contained herein shall terminate and be of no further force and effect, ifno Claim is pending, upon the repayment ofthe Long Term Project Loan in accordance with its terms. (g) Trustor hereby represents and warrants as follows: 53 07-29-09 Meta Housing. DDA CDC/2009-39 (i) The Property is not and has not been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Property is in compliance with all Environmental Laws; (iii) Trustor has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims") pending or threatened against Trustor or any previous owner or user of the Property (and relating to Trustor's and/or such previous owner's or user's ownership of the Property), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Trustor has not received any written notice (i) pursuant to which the Property has been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Property will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be designated as "border zone property." The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 10. Insurance 10.1. Casualtv Insurance. Trustor shall at all times keep the Property insured for the benefit of Trustee and Beneficiary as follows: 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Property, with a deductible amount not to exceed an amount satisfactory to Beneficiary; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiary; 10.1.3. Against damage or loss by flood, ifthe Property is located in an area identified by the Secretary of Housing and urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of1968 or the Flood Disaster Protection Act of1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiary may require; 54 07-29-09 Meta Housing - DDA CDC/2009-39 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiary may require; 10.1.5. During any alteration, construction, or replacement of improvements on the Property, or any substantial portion thereof, a Builder's All Risk policy with extended coverage with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the improvements on the Property, and workers' compensation, in statutory amounts, with provision for replacement with the coverage described in this Section 10, without gaps or lapsed coverage, for any completed portion of improvements on the Property; and 10.1.6. If required by the Senior Lender, against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiary, if such insurance is required by Beneficiary in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Property is located. 10.2. Liabilitv Insurance. Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiary against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Property, or any street, drive, sidewalk, curb, or passageway adjacent to it, in standard form and with such insurance company or companies and in an amount of at least $3,000,000 combined single limit, or such greater amount as Beneficiary may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust and the 2009 DDA (but such coverage or its amount shall in no way limit such indemnification). 10.3. Other Insurance. Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Property, as (a) may be required by the terms of any construction contract for any improvements on the Property or by any governmental authority, other than Beneficiary, (b) may be specified in the 2009 DDA, or (c) may be reasonably required by Beneficiary from time to time. lOA. Form of Policies. All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiary from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiary shall approve in Beneficiary's sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiary, each insurer shall have a Best Rating of Class A, Category viii, or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiary; (c) with the exception ofthe comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name Beneficiary and Trustee as insureds; and (d) include such deductibles as Beneficiary may approve. If a policy required under this paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiary. 55 07-29-09 Meta Housing - DDA CDC/2009-39 10.5. Duplicate Originals or Certificates. Duplicate original policies evidencing the insurance required under this Section 10 and any additional insurance that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiary and, in addition, Trustor shall deliver to Beneficiary (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Beneficiary of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiary under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiary's reasonable judgment, is sufficient to allow Beneficiary to ascertain whether such policies comply with the requirements of this Section 10. 10.6. Increased Coverage. If Beneficiary determines that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiary, procure such additional coverage as Beneficiary may require in Beneficiary's sole and absolute discretion. 10.7. No Separate Insurance. Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section 10, unless endorsed in favor of Trustee and Beneficiary, as required by this Section 10 and otherwise approved by Beneficiary in all respects. 10.8. Transfer of Title. In the event offoreclosure of this Deed of Trust or other transfer of title or assigrunent ofthe Property in extinguishment, in whole or in part, ofthe Note, all right, title, and interest of Trustor in and to all insurance policies required under this Section 10 or otherwise then in force with respect to the Property and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 10.9. Replacement Cost. For purposes of this Section 10, the term "full insurable value" means the actual cost of replacing the Property in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiary's request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiary. Trustor shall pay the cost of such appraisal. 10.10. Approval Not Warrantv. No approval by Beneficiary of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiary as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11. Beneficiary's Right To Obtain. Trustor shall deliver to Beneficiary original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiary or if any such policy is canceled, whether or not Beneficiary has the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiary, without notice to or demand on Trustor, may (but is not obligated to) obtain such insurance insuring only Beneficiary and Trustee with such company as Beneficiary may deem satisfactory, 56 07-29-09 Meta Housing - DDA CDC/2009-39 and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor or, at Beneficiary's option, may be added to the Note. Trustor acknowledges that, if Beneficiary obtains insurance, it is for the sole benefit of Beneficiary and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiary to protect Trustor in any way. 10.12. Dutv To Restore After Casualtv. If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Property, Trustor shall immediately give notice of such loss or damage to Beneficiary and, if Beneficiary so instructs, shall promptly, at Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, shall (i) commence and continue diligently to completion to restore, repair, replace, and rebuild the Property as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction; or, (ii) pay all monetary obligations due under the Senior Lender Documents and pay all monetary obligations then due under the Note to Beneficiary. II. Assigmnent ofInsurance and Condemnation Proceeds. Subject to the rights of the Senior Lender under the Senior Lender Documents, in the event that the Property, or any part or appurtenance thereof or right or interest therein, be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiary or Trustee may, at its option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief therefor. Subject to the HUD Secondary Financing Rider, attached hereto, all compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Property, are hereby assigned to Beneficiary, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiary any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiary and all refunds orrebates made oftaxes or assessments on the Property, and Beneficiary may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Note, the 2009 DDA or this Deed of Trust. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiary shall be deemed to be held in trust and Beneficiary may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiary or Trustee may require. 12. Use ofInsurance Proceeds. After any damage by casualty to the Property, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiary generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Property. Subject to the rights of the Senior Lender Documents, Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiary shall make available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: 57 07-29-09 Meta Housing - DDA CDC/2009-39 (i) There exists no default under the Note, the 2009 DDA or this Deed of Trust at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiary of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiary from Trustor of sufficient cash funds to cover one hundred percent (100%) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiary in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiary with said amount and any interest earned thereon shall be released to Beneficiary, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiary. In the event of any default under the Note, the 2009 DDA or this Deed of Trust, or any reconstruction requirements, Beneficiary may, at its option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Note; (iv) Receipt by Beneficiary of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiary in writing stating that the work described in the Trustor's certificate is adequate to restore the Property to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (v) Such additional conditions as may reasonably be imposed by Beneficiary to provide assurance that the Proceeds will be used to restore the Property to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiary's prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiary shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiary's discretion, be subject to reasonable holdbacks required by Beneficiary, not exceeding ten percent (10%) of the total estimated cost of completion and which will be released upon lien-free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiary's written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiary in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiary in connection with its 58 07-29-09 Meta Housing - DDA CDC/2009-39 construction loans, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiary. Trustor shall, during the progress of the work, also submit to the Beneficiary, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiary furnished by an architect or engineer approved by Beneficiary in writing showing the cost oflabor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and (c) After completion of the restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Note, the 2009 DDA or this Deed of Trust, Beneficiary shall pay to Trustor (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiary upon delivery to Beneficiary of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer approved by Beneficiary confirming that the Property has been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Property for its intended purposes and use. If (i) any of the conditions in subparagraph l2(b), above, are not fulfilled within sixty (60) days after the date ofthe casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Note, the 2009 DDA or this Deed of Trust; or (ii) if Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) if Trustor is otherwise in default under the Note, the 2009 DDA or this Deed of Trust, or any reconstruction requirements set forth therein or herein, Beneficiary may, at its option, apply the Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiary under the Note, and all other debts of Trustor to Beneficiary are discharged, Beneficiary shall not have the right to require the Property to be repaired under the terms of this Deed of Trust, but Beneficiary's rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Subject to the rights ofthe Senior Lender under the Senior Lender Documents, Trustor shall not cornmence any repairs or reconstruction of any casualty until Beneficiary consents in writing thereto, which consent may be withheld by Beneficiary in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Trustor to subject the Property to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph. 59 07-29-09 Meta Housing - DDA CDC/2009-39 In any event in which the Beneficiary is not otherwise obligated to permit the insurance proceeds to be applied to the restoration of the Property as hereinabove described and, at the option of Beneficiary, the proceeds ofa loss under any policy, whether or not endorsed payable to Beneficiary, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation ofthe Trustor or any other person for payment of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards. Subject to the rights ofthe Senior Lender under the Senior Lender Documents, should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiary shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees to pay Beneficiary's costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiary toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds, as set forth in Section 12 hereinabove; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiary, renders or will render the Property not economically viable or which substantially impairs Beneficiary's security or lessens to any extent the value, marketability or intended use of the Property, Beneficiary may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiary may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiary or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Note plus all other sums due to Beneficiary from Trustor shall be paid to Trustor or Trustor's assignee. 14. Prooerty Taxes and Assessments. Trustor shall pay in full on or before delinquency all rents, taxes, assessments community redevelopment in lieu of property tax charges and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiary with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts. Trustor agrees not to consent to inclusion ofthe Land in any local improvement or special assessment district or to the imposition of any special or local improvement assessment against the Property, without Beneficiary's prior written consent. 16. Mortgage Taxes. In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiary or any payments secured hereby. Trustor shall bear and pay the full amount of such taxes. 60 07.29.09 Meta Housing - DDA CDC/2009-39 ] 7. Soecial Assessment and Insurance Reserves. Subject to the rights of the Senior Lender under the Senior Lender Documents, Trustor shaH, at the request of the Beneficiary, pay to Beneficiary equal monthly instaHments of the special assessments and insurance premiums estimated by the Beneficiary next to become due, in addition to any other periodic payment or performances owed by Trustor under the Note or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiary will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the additional payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiary deems necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiary of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiary on account of assessments or insurance premiums may be commingled and invested with Beneficiary's own fimds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiary shall not exercise the rights granted in this paragraph so long as the following conditions are met: Trust; or (a) There is no other default under the Note, the 2009 DDA or this Deed of (b) Trustor pays all assessments and insurance premiums prior to delinquency. Upon Trustor's failure to comply with any of the conditions (a) or (b) above, Beneficiary may, at its option, then or thereafter exercised, require Trustor to pay the additional sums described in this paragraph. Notwithstanding the foregoing, in the event that the Senior Lender releases casualty or condemnation proceeds to the Trustor for the repair or reconstruction of the Property, Beneficiary shall also consent to the release of such proceeds. ]8. Trustor's Right to Contest Taxes. Trustor shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Note, the 2009 DDA, or this Deed of Trust; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. ] 9. Reoort of Real Estate Transaction. Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may faH on the Beneficiary, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and retums required under this paragraph are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiary. 20. Leases. With respect to any leases currently or hereafter relating to any portion of the Property, Trustor agrees that each such lease shall comply with the applicable provisions of the 2009 DDA. 61 07-29-09 Meta Housing - DDA CDC/2009-39 21. Assignment of Leases. Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiary, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiary all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiary confers upon Trustor a license to collect and retain the rents, issues, deposits and profits ofthe Property, as they become due and payable, subject, however, to the right of Beneficiary upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiary may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiary upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Note or the 2009 DDA, and Beneficiary shall, in its sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiary shall determine. In the event the Beneficiary exercises or is entitled to exercise any of its rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Note or the 2009 DDA, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiary shall have, and is hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiary in writing, Beneficiary's exercise of any of the rights provided in this paragraph shall preclude Trustor from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiary any duty to produce rents from the Property, and such assignment shall not cause Beneficiary to be a "mortgagee in possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiary in any separate assignment ofleases and rents. 22. Impairment of Securitv. Trustor shall not, without first obtaining Beneficiary's written consent, which consent shall not be unreasonably withheld, assign any ofthe rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiary's lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiary, which consent shall not be unreasonably withheld, (i) initiate or support any zoning reclassification ofthe Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non-conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the 62 07-29-09 Meta Housing. DDA CDC/2009-39 Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits. Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiary or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiary, has waived and does hereby waive any immunity to such liability to Beneficiary under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiary's rights against Trustor. Should Beneficiary elect to appear in or defend any such action or proceeding or be made a party to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnifY from and, on demand, reimburse Beneficiary and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of I 0% per annum and shall be due and payable on demand. Trustor shall pay costs of suit, cost of evidence of title expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiary to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. 24. Assignments and Transfers. Trustor acknowledges that Beneficiary relied upon Trustor's financial statements, credit history, business and real property managerial expertise and other factors personal to Trustor in making the Note, and Trustor covenants not to transfer any of the interest in the Property or to permit the transfer of any interest in Trustor, except as provided in Section 25 hereinbelow or as otherwise approved in the 2009 DDA , without first receiving Beneficiary's express written consent in each instance. A breach of this covenant shall constitute a default under the Note and this Deed of Trust. All sums then due to Beneficiary by Trustor hereunder or under the Note may, at Beneficiary's option, be declared immediately due and payable if any of Trustor's interests in the Property, or any part thereof, are sold or transferred, voluntarily or involuntarily, without Beneficiary's written consent. 25. Permitted Transfers. (a) Notwithstanding anything to the contrary contained herein, the respective interests of Trustor's special limited partner and Investor Limited Partner shall be transferable to any affiliate of Investor Limited Partner in accordance with the terms ofthe Partnership Agreement without the consent of the Beneficiary. So long as Trustor is not then in default under the terms Note, the 2009 DDA or this Deed of Trust and upon the expiration ofthe tax credit compliance period, the interests ofthe Investor Limited Partner in the Trustor may be transferred to the Trustor's general partner or its affiliate without the consent of the Beneficiary. (b) Notwithstanding anything to the contrary contained herein, the Trustor's Investor Limited Partner shall be permitted to remove the Trustor's general partner for cause in accordance with the Partnership Agreement without the consent of the Beneficiary; provided, however, that Investor Limited Partner shall not elect and appoint a successor general partner therefore without the consent of the 63 07-29-09 Meta Housing. DDA CDC/2009-39 Beneficiary, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, the substitute general partner shall assume all of the rights and obligations of the removed general partner hereunder and under the 2009 DDA. 26. Further Encumbrances. Trustor acknowledges that Beneficiary relied upon the Property not being subject to additional liens or encumbrances except as set forth in this Deed of Trust, the Note and the 2009 DDA for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiary in bankruptcy; the risks to Beneficiary in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiary's rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiary's option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiary's requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiary to make the Note secured by this Deed of Trust, and with the knowledge that Beneficiary will materially rely upon this paragraph in so doing, Trustor covenants not to encumber the Property except as set forth herein without first receiving Beneficiary's express written consent in each instance, which consent may be withheld by Beneficiary in its sole discretion. A breach of this covenant shall constitute a default under the Note, the 2009 DDA and this Deed of Trust, and Beneficiary may exercise all remedies available to Beneficiary under the Note, the 2009 DDA or this Deed of Trust. Without limiting the generality of the foregoing, no mortgages, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiary shall encumber any real or personal property that is the subject of any lien or security interest granted to Beneficiary. 27. [RESERVED - NO TEXT]. 28. Event of Default. An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfY any performance or payment obligation required under this Deed of Trust, the Note or the 2009 DDA when due, however Trustor shall have ten (10) days to cure any such default; (b) Failure of Trustor to properly perform its obligations under this Deed of Trust, the Note or the 2009 DDA, by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty (30) days nor greater than sixty (60) days from the date of such notice, and shall be determined by Beneficiary in its sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice shall be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice; (c) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time 64 07-29-09 Meta Housing - DDA CDC/2009-39 (which Act, as amended, is herein called the "Bankruptcy Code"), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for reliefin any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (d) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any ofthe Property, of any other real property of Trustor, of any other significant asset of Trustor, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (e) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Trustor or any other person under this Deed of Trust, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (30) days after such sequestration, attachment or execution or five (10) days before the sale of any such assets; (f) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (g) The detennination by Beneficiary that any representation, warranty or statement contained in this Deed of Trust or the Note or the 2009 DDA in writing delivered to Beneficiary in connection with Note or 2009 DDA was incomplete, untrue or misleading in any material respect as ofthe date made and Trustor has not cured such default within thirty (30) days from written notice by Beneficiary of such default; (h) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiary the payment of the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiary's interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Note or the 2009 DDA or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiary by reason of their ownership of this Deed of Trust or the Note and, in such event, Trustor, after demand by Beneficiary, does not pay such taxes or assessments within thirty (30) days or reimburse Beneficiary therefor or, in the opinion of counsel for Beneficiary, it might be unlawful to require Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount pennitted by applicable law; (i) Trustor acknowledges and agrees that all material non-monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that 65 07-29-09 Meta Housing. DDA CDC/2009-39 Beneficiary shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure ofthis Deed of Trust, upon the occurrence of any such material non-monetary default; and (j) Notwithstanding the remedies of Beneficiary set forth in Section 29, below, the parties hereto agree that the Investor Limited Partner shall be entitled to cure any default hereunder by the Trustor, and shall have fifteen (15) days after the expiration of the applicable cure period to effect such cure, and the parties hereto shall accept performance by the Investor Limited Partner of any obligation of the Trustor hereunder as though tendered by the Trustor itself, provided such performance by the Investor Limited Partner has occurred during the cure period, if any, provided to the Trustor hereunder with respect to such default. 29. Rights and Remedies on Default. Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, and subject to the rights ofthe Senior Lender and the Senior Lender Documents, Trustee or Beneficiary may exercise anyone or more of the following rights and remedies: (a) . Beneficiary may exerCise any right or remedy provided for in the Note, the 2009 DDA or this Deed of Trust; (b) . Beneficiary may declare the Note and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) . Beneficiary may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee ofa written declaration of default and demand for sale and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record in case offoreclosure by exercise ofthe power of sale herein. Should Beneficiary elect to foreclose by exercise of the power of sale herein, Beneficiary shall also deposit with Trustee this Deed of Trust, the documents evidencing the Agency Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale 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 upon any terms and conditions specified by Beneficiary and pennitted by applicable law. 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 may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase all or any portion of the Property, as applicable, at sale. 66 07-29-09 Meta Housing. DDA CDC12009-39 (d) . Beneficiary, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Note, the 2009 DDA and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) UCC Remedies. Beneficiary shall have all the rights and remedies of a secured party under the California Uniform Commercial Code, including, without limitation, Section 950 I (4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiary at a place to be designated by Beneficiary that is reasonably convenient to both parties. Upon repossession, Beneficiary may propose to retain the collateral in partial satisfaction of the Note or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiary disposes of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (ii) Beneficiary; and to the reasonable attorneys' fees and legal expenses incurred by (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. (I) Remedial Advances. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, without obligation so to do and without demand upon Trustor and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiary shall be subrogated to the rights and lien interests of any person who is paid by Beneficiary pursuant to the terms of this paragraph. Trustor shall 67 07-29-09 Meta Housing - DDA CDC/2009-39 repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiary, with interest from the date of such advance or expenditure at the rate of I 0% per annum, and the repayment thereof shall be secured hereby. (g) Sununary Possession. Beneficiary may, at its option, either in person or by agent, employee or court-appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (h) Collection of Rents. Beneficiary may require any tenant or other user ofthe Property to make payments of rent or use fees directly to Beneficiary, regardless of whether Beneficiary has taken possession of the Property. If any rents are collected by Beneficiary, then Trustor hereby irrevocably designates Beneficiary as Trustor's attorney-in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the sarne and collect the proceeds. Payments by tenants or other users to Beneficiary in response to Beneficiary's demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiary may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) Beneficiary's Enforcement of Leases. Beneficiary is hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court- appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Note or the 2009 DDA. Trustor hereby grants to Beneficiary full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Note or the 2009 DDA and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiary, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiary under the Note and this Deed of Trust, all in such order as Beneficiary may determine. Beneficiary shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is 68 07-29-09 Meta Housing - DDA CDC/2009-39 further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiary nor shall it operate to make Beneficiary liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition ofthe Property or for any negligence in the management, upkeep, repair or control ofthe Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiary after taking possession of the Property hereunder. (j) Beneficiary's Enforcement of Contracts. Beneficiary shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiary or, at Beneficiary's option, in the name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiary acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiary as its attorney-in-fact for the purposes ofthe foregoing, which power shall be durable and coupled with an interest. Beneficiary does not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiary be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiary in writing, following any default by Trustor under the Note, the 2009 DDA or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiary in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiary under the Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Note. (k) Appointment of Receiver. Beneficiary has the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Note. The receiver may serve without bond, if permitted by law. Beneficiary's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. Employment by Beneficiary shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiary may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiary's option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiary deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiary or otherwise, as Beneficiary may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand and bear interest 69 07-29-09 Meta Housing - DDA CDC/2009-39 from the date of expenditure until repaid at the rate of I 0% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. (I) Specific Enforcement. Beneficiary may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection therewith. (m) General Creditors' Remedies. Beneficiary shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof 30. Application of Sale Proceeds. After deducting all costs and expenses of Trustee and of this Deed of Trust and, subject to the rights ofthe Senior Lender under the Senior Lender Documents, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, 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 rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiary and any other person or persons legally entitled thereto. 31. Remedies Cumulative. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy provided herein or under the Note, the 2009 DDA or this Deed of Trust, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Note, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either ofthem may pursue inconsistent remedies. 32. No Waiver. No waiver of any default or failure or delay to exercise any right or remedy by Beneficiary shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 33. Marshaling. In case ofa sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one or more parcels. Neither Trustee nor Beneficiary shall be required to marshal Trustor's assets. 34. SUBMISSION TO JURISDICTION. (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LA W,HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN SAN BERNARDINO COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (0) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR 70 07-29-09 Meta Housing. DDA CDC/2009-39 PROCEEDING IN ANY FORUM OTHER THAN SAN BERNARDINO COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARY OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 35. Trustor's Indemnification. Trustor agrees to indemnify and hold harmless Trustee and Beneficiary from and against any and all losses, liabilities, penalties, claims, charges, costs and expenses (including attorneys' fees and disbursements) (the "Losses") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiary by reason or on account of, or in connection with: (a) any default by Trustor hereunder or under the Note or the 2009 DDA; (b) Trustee's and/or Beneficiary's good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties hereunder or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent thereto, except for the willful misconduct or gross negligence of the indemnified person; or (I) any failure of Trustor to file any tax reports or returns referred to in this Deed of Trust. The indemnity provided under subsection (I) of this paragraph shall also extend to counsel for the Beneficiary. Any amount payable to Trustee, Beneficiary or counsel for Beneficiary under this paragraph shall be due and payable within ten (10) days after demand therefor and receipt by Trustor of a statement from Trustee, Beneficiary and/or counsel for Beneficiary setting forth in reasonable detail the amount claimed and the basis therefor, and such amounts shall bear interest at the rate of! 0% per annum from and after the date such amounts are paid by Beneficiary, Trustee or counsel for Beneficiary, until paid in full by Trustor. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiary that is subject to the indemnity set forth in this paragraph, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and/or Beneficiary, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiary. Notwithstanding the foregoing, Trustee and Beneficiary, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist 71 07-29-09 Meta Housing - DDA CDC/2009-39 therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiary for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's performance of the obligations secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 36. Attornevs' Fees: Costs. Trustor agrees to reimburse Beneficiary for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiary incurs in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Note or the 2009 DDA, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiary prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work-out, compromise, settlement or satisfaction of the debt secured hereby or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Note or the 2009 DDA. For the purposes hereof, the words "reasonable attorneys' fees" shall mean and include the salaries and fringe benefits of the City Attorney and lawyers employed by the City of Attorney of the City of San Bernardino, computed on a hourly basis, who may provide legal services to the Beneficiary in connection with the exercise by the Beneficiary of any of its remedies hereunder. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 37. Acceptance bv Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 38. Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiary, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiary and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiary shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee herein named or any substitute or successor trustee, then Beneficiary shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiary and the recordation of such writing in the office where this Deed of Trust is recorded, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiary shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiary by an officer of Beneficiary, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiary. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, inununities and duties herein conferred upon Trustee; but, nevertheless, upon the written request of Beneficiary or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property ofthe trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any ofthe properties and moneys held by the Trustee hereunder to said successor or substitute 72 07-29-09 Meta Housing - DDA CDC/2009-39 trustee. All references herein to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and confirms any and all acts that Trustee herein named or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue hereof. 39. Reconvevance. Upon written request of Beneficiary, stating that all performances and sums secured hereby have been satisfied and paid, and upon surrender ofthis Deed of Trust to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in any reconveyance executed under this Deed of Trust 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." 40. No Releases. The Property shall not be released from the lien ofthis Deed of Trust and no person shall be released from liability under the Note or any other obligation secured hereby, except in the manner herein specified. Without affecting the liability of any other person for the payment and performance of any obligation herein mentioned (including Trustor should it convey said Property) and without affecting the lien or priority hereof upon any Property not released, Beneficiary may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or anyone or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described herein, take or release any other security or make compositions or other arrangements with debtors. Beneficiary may also accept additional security, either concurrently herewith or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale hereunder. 41. Beneficiarv's Consents. At any time, upon written request of Trustor, Trustor's payment of Beneficiary's fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person for the payment of the indebtedness, Beneficiary may: (a) consent to the making of any map or plat of said Property; (b) join in granting any easement or creating any restriction thereon, (c) join in any other agreement affecting this Deed of Trust or the lien or charge thereof, and (d) reconvey, without warranty, all or any part of the Property. 42. Partnership Agreement Amendments. The consent of the Beneficiary is not required to an amendment of the Partnership Agreement: (i) resulting from the transfer by the Investor Limited Partner of its interest in the Trustor in accordance with this Deed of Trust; (ii) which does not result in the reduction of the installments of the Investor Limited Partner's Capital Contributions to be made during and at the time of completion of construction of the Project (as defined in the 2009 DDA) under the Partnership Agreement to be used as Trustor's equity contributions in accordance with the 2009 DDA; or (iii) which does not materially and adversely affect the ability of the Trustor to perform its obligation under this Deed of Trust, the Note or the 2009 DDA. 43. Further Assurances. Trustor, from time to time, within fifteen (J 5) days after request by Beneficiary, shall execute, acknowledge and deliver to Beneficiary, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiary, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any 73 07-29-09 Meta Housing - DDA CDC/2009-39 interest which, in the reasonable opinion of Beneficiary, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (IS) days after request by Beneficiary, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiary may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiary on demand all reasonable costs and expenses incurred by Beneficiary in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiary, nor the failure of Beneficiary to make such request shall be construed as a release of such Property, or any part thereof, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiary are cumulative and given as additional security. 44. Time of Performance. Time is of the essence hereof in connection with all obligations of the Trustor herein and under the Note. 45. Notices. The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth and to the Investor Limited Partner at: Attention: Any notices to be given to Trustor by Beneficiary hereunder shall be sufficient, if personally delivered or mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address that Trustor has requested in writing to Beneficiary. Any time period provided in the giving of any notice hereunder shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular first-class postage pre-paid mail, as officially recorded on the certified mail receipt. 46. Beneficiary's Right to Inspect. Beneficiary and its agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiary's interest and to inspect the Property. 47. Reports and Statements. Trustor shall deliver to Beneficiary, within ninety (90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after Beneficiary's request, following an Event of Default, reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiary covering the Property, both certified as correct by Trustor. At Beneficiary's option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiary so requests, such statements shall specify, in 74 07-29-09 Meta Housing - DDA CDC/2009-39 addition to other infonnation requested by Beneficiary, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the tenns of the respective leases or the rental arrangements. Trustor shall pennit Beneficiary or its representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiary all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 48. Assignment bv Beneficiarv: Participation. Beneficiary may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiary may make available to any person all credit and financial data furnished or to be furnished to Beneficiary by Trustor. Trustor agrees to provide to the person designated by Beneficiary any infonnation as such person may reasonably require to fonn a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiary, under the tenns of this Deed of Trust. 49. Non-Recourse Liabilitv. a. As set forth in the Note, the Note is a non-recourse loan and the payment of the principal, or interest or premium, if any, and/or any other charges of any nature arising out of the Note or this Deed of Trust, or for any deficiency with respect to principal, or interest or premium owing on the Note shall be limited to the security given by the Trustor and the Trustor's general except for the "Nonrecourse Carve-Outs" as defined below. b. Notwithstanding the provisions of Section 49(a) above, Trustor and Trustor's general partner shall have full personal joint and several liability for, and shall not be exonerated or exculpated from, the payment of all losses or damages, liabilities and expenses suffered, sustained or incurred by Beneficiary as a result of or arising out of, in connection with, directly or indirectly, or resulting from any of the following matters (such liability and such matters from which such liability arises, collectively, the "Nonrecourse Carve-Outs") (i) any fraud, intentional material misrepresentation, misappropriation or insurance proceeds, condemnation awards, security deposits or trust funds in violation of applicable law or the provisions ofthe 2009 DDA; (ii) Trustor's attempts to interfere with Beneficiary's rights under the Note, the 2009 DDA or this Deed of Trust; (iii) the failure of Trustor to apply proceeds of rents and other income ofthe collateral toward, or for sums otherwise advance by Beneficiary for, the costs of maintenance and operation of the Property and to the payment oftaxes, lien claims, insurance premiums and debt service and other indebtedness to the extent the 2009 DDA requires such taxes, lien claims and other items to be paid; (iv) statutory liability for waste or the wilful damage or destruction to the Property, except as a result of casualty or condenmation; (v) any claims, actions, proceedings and suits initiated by Trustor (or any party empowered to act on behalf of Trustor) alleging that the relationship of Trustor and Beneficiary is that of joint venturers, partners, tenants in common or joint tenants or any relationship other that that of debtor and creditor; (vi) any claim, demand, order, consent decree, settlement, judgment or verdict arising from the manufacture, deposit, storage, disposal, burial, dumping, injecting, spilling, leaking or other placement or release, in, on or about any of the Property ofa Hazardous Material; or (vii) the cost to repair the Property as a result of casualty to the extent that such cost is not reimbursed by Insurance. 75 07-29-09 Meta Housing - DDA CDC12009-39 50. Legal Relationships. The relationship between Beneficiary and Trustor is similar to that oflender and borrower, and no partnership, j oint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiary. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiary of this Deed of Trust. 51. Trustor Certification of Approval. Trustor hereby covenants and certifies that by executing this Deed of Trust, Trustor has obtained all approvals required by its principals, members and partners to execute and deliver the Note and this Deed of Trust. 52. Modification. This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by all of the parties hereto. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiary and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiary's delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiary's failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor's breach or default. 53. Successors. Subject to the prohibitions against Trustor's assignments herein, this Deed of Trust shall inure to the benefit of and bind all of the parties, their successors, estates, heirs, personal representatives and assigns. 54. Partiallnvaliditv.lfa court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed ofTrustto the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 55. Mutual Negotiation. Beneficiary and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 56. Paragraph Headings. The paragraph headings are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 57. Aoolicable Law. This Deed of Trust and the rights of the parties hereunder shall be governed by, construed and enforced in accordance with the laws of the State of California. 58. Entire Agreement. This Deed of Trust, including any exhibits or addenda, contains the entire agreement of the parties with respect to the subject matter hereof 59. Counteroarts. This Deed of Trust may be executed by the principals, members and partners of Trustor in two or more counterparts, all of which together shall constitute one and the same 76 07-29-09 Meta HOUSing - DDA CDC/2009-39 instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 60. Fixture Filing and Recording. This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502( c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of San Bernardino County, California, and covers goods that are, or are to become, fixtures. 61. Survival of Representations and Warranties. All of Trustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Note secured hereby, until performance of all obligations set forth in the Note and in the 2009 DDA or, alternatively, full repayment of the Note and release and reconveyance of this Deed of Trust. 62. Conflicting Provisions. To the extent that the provisions of this Deed of Trust conflict with any provisions of the 2009 DDA, the provisions of this Deed of Trust shall control. 77 07-29-09 Meta Housing. DDA CDC/2009-39 IN WITNESS WHEREOF, Trustor hereby duly executes this Agency Loan Deed of Trust as of the day and year first above written. TRUSTOR Magnolia Highland, L.P. a California limited partnership By: Magnolia Highland, LLC, a California limited liability company Its: Administrative General Partner By: John M. Huskey Manager By: Western Community Housing, Inc. a California non-profit public benefit Corporation Its: Managing General Partner By: Graham Espley-Jones President By: Leanne Truofreh Secretary [NOTARY JURATS ATTACHED] 78 07-29-09 Meta Housing - DDA CDC/2009-39 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY 79 07-29-09 Meta Housing. DDA CDC/2009- 39 Attachment No. 12 Certificate of Completion 80 07-29-09 Meta HousinQ: - DDA CDC/2009-39 Certificate of Completion When Recorded, Mail to: Redevelopment Agency of the City of San Bernardino Attn.: Interim Executive Director 201 North "E" Street, Suite 301 San Bernardino, CA 92401 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO CERTIFICATE OF COMPLETION The undersigned officer of the Redevelopment Agency of the City of San Bernardino (the "Agency") hereby certifies as follows: By its Resolution No. CDC , adopted and approved 200_ and Resolution No. , adopted and approved _' 200_, the Agency has resolved as follows: Section 1. The improvements required to be constructed in accordance with that certain Disposition and Development Agreement (the "Agreement") dated as of _, 2009 by and between the Agency and Magnolia HigWand, L.P., a California limited partnership (the "Developer"), of which Meta Housing Corporation is the General Partner, on the site(s) (the "Property") more fully described in Exhibit "A" attached hereto and incorporated herein by this reference, have been completed in accordance with the provisions of the Agreement. Section 2. This Certificate of Completion shall constitute a conclusive determination of satisfaction of the agreements and covenants contained in the Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct and develop the improvements on the Property, excluding any normal and customary tenant improvements and minor building "punch-list" items, and including any and all buildings and any and all parking, landscaping and related improvements necessary to support or which meet the requirements applicable to the building and its use and occupancy on the Property, whether or not said improvements are on the Property or on other property subject to the Agreement, all as described in the Agreement, and to otherwise comply with the Developer's obligations under the Agreement with respect to the Property and the dates for the beginning and completion of construction of improvements thereon under the Agreement; provided, however, that the Agency may enforce any covenant surviving this Certificate of Completion in accordance with the terms CDC/2009-39 and conditions of the Agreement and the Agency Grant Deed (Recorded Instrument No. ) and the Agency Regulatory Agreement (Recorded Instrument No. ) pursuant to which the Property was conveyed under the Agreement. The Agreement is an official record of the Agency and a copy of the Agreement may be inspected in the office of the Secretary of the Agency, 201 North "E" Street, Suite 301, San Bernardino, California, during regular business hours. Section 3. The Property to which this Certificate of Completion pertains is more fully described in Exhibit "A" attached hereto. DATED AND ISSUED this _ day of ,200_. Emil A. Marzullo Interim Executive Director [NOTARY JURAT ATTACHED] October 9, 2009 Meta Housing Corporation Attention: Aaron Mandel, Project Manager 1640 Sepulveda Boulevard, Suite 425 Los Angeles, CA 90025 Re: 2009 Defense, Indemnification and Hold Harmless Agreement by and between the City of San Bernardino and Magnolia Highland, L.P. Dear Mr. Mandel: Enclosed for your records is a fully executed Agreement as referenced above and is a part of or an attachment to the Agreement that was approved at the meeting of the Community Development Commission of the City of San Bernardino on August 3, 2009, Resolution CDC/2009-39 (Companion Resolution 2009-289). Should you have any questions regarding this matter, please feel free to call me or Mr. Carey K. Jenkins, Housing and Community Development Director at (909) 663-1044. Sincerely, ~-- Lorraine B. Wyche Secretary Enclosure: 2009 Defense, Indemnification and Hold Harmless Agreement by and between the City of San Bernardino and Magnolia Highland, L.P. cc: Carey K. Jenkins (With copy of Executed Agreement) Russ Dejesus/Margaret Fedor (With Original Executed Agreement) Margaret Fedor (With Original Executed Agreement) Wasana A. Chantha, Executive Secretary File P;\Cleric.1 Services Depl\Lorrainc\Lencr'J\2009\lO_09_09 Magnolia Higland, L-P, hcculcd Agmt. (D1HH Agrecmcnt).doc 201 North E Street, Suite 301. San Bernardino, California 92401-1507. (909) 663-1044. Fax (909) 888-9413 CDC/2009-39 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino Attention: City Attorne~ 300 North "D" Street, 6 Floor San Bernardino, CA 92418 (Space Above For Recorder's Use) 2009 DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT BY AND BETWEEN THE CITY OF SAN BERNARDINO AND MAGNOLIA HIGHLAND, L.P. This 2009 DEFENSE, INDEMNIFICATION AND HOLD HARMLESS AGREEMENT (this "Agreement") is made and entered into as of August 3, 2009 (the "Effective Date"), by and between the City of San Bernardino, a charter city (the "City"), and Magnolia Highland, L.P., a California limited partnership (the "Buyer" or the "Developer"). In this Agreement, the City or the Buyer may singularly be referred to as a "Party" and may collectively be referred to as the "Parties.~' RECITALS WHEREAS, on August 3, 2009, the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, and the Buyer executed and entered into the 2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Agreement (the "DDA") with the Buyer for the construction by the Buyer of an affordable senior citizen rental housing project consisting of not more than seventy-nine (79) rental units located in the City of San Bernardino, the County of San Bernardino in the State of California (the "Project"); and WHEREAS, pursuant to Section 1.5(a) of the DDA, the Buyer has agreed to execute, to deliver and to perform his Agreement in favor of the City; and 1 P:\Agendas\Agenda Attachments\Agenda Allachments\Agenda AttachrncntslAgrmts_Amend 2009\08-03-09 Meta Housing Indemnification Agreement _ Final,doex CDC/2009-39 WHEREAS, both the Buyer and the City agree to execute, to deliver and to perform the terms, covenants and conditions of this Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS OF THIS AGREEMENT, AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE BUYER, ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND THE CITY, ON BEHALF OF ITSELF, AND ITS SUCCESSORS AND ASSIGNS, DO HEREBY AGREE AS FOLLOWS: Section 1. Recitals. The matters set forth in the Recitals of this Agreement are true and correct, are material inducements that caused the Parties to execute and to deliver this Agreement, and are incorporated herein by this reference as if fully set forth in this Section I. Section 2. Definitions. Except for those terms defined in the above Recitals to this Agreement and in other sections of this Agreement, the following capitalized terms shall have the meanings as set forth below: "Agency" shall mean the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic, located in the County of San Bernardino, State of California. "City" shall mean the City of San Bernardino, a charter city, located in the County of San Bernardino, State of California. "County" shall mean the County of San Bernardino, in the State of California. "DDA" shall mean the 2009 Affordable Senior Citizen Rental Housing Acquisition, Disposition and Development Agreement, dated August 3, 2009, as executed and delivered by and between the Agency and the Buyer, together with all exhibits, riders and attachments thereto. "Effective Date" shall mean the date of this Agreement. "Environmental Laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any Hazardous Substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances or regulations relate to hazardous substances on, at, in, above, under, from or about the Property), occupational or enviromnental conditions on, at, in, above, under, from or about the Property, as now or may at any later time be in effect, as amended from time to time, including, without limitation, the Comprehensive Enviromnental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of i976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ("FWPCA") [33 USC Section 1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 260i et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC 2 P:\AgendasIAgenda AnachmenlslAgenda Attachment'lAgeoda AttachmentslAgrmt,.Arnend 2009\0&_03.09 Meta Housing Indemnification Agreemem _ Fil1llLdoex CDC/2009-39 Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300fet seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25280 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 25249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, municipal, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on, at, in, above, below, under, from or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water or land use. "Hazardous Substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," ""toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMTA, or under any other environmental law; and those substances listed in the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (I) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, (6) a radioactive material, 3 P:\AgendasIAgenda Attachments\Agenda Attachmems\Agenda Attachments\Agrmts-Amend 2009\08-03-09 Mela Housing Indemnification Agreement _ Final.docx CDC/2009-39 (7) radon, or (8) lead or lead-containing materials. "Laws" shall mean all federal, state, municipal and local laws, statutes, codes, regulations, ordinances, orders, permits and/or approvals, rules, policies and/or procedures, now or hereafter in effect, as amended from time-to-time, including, without limitation, California Enviromnental Quality Act ("CEQA"), National Enviromnental Protection Act ("NEPA") and all applicable Enviromnental Laws. "Property" shall mean the real property and improvements located in the City of San Bernardino, County of San Bernardino, State of California, the legal description of which is attached hereto and incorporated herein by this reference as Exhibit "A." The Project is constructed on the Property. Section 3. Defend, Indemnify and Hold Hannless. The Buyer agrees to defend in any administrative, civil, criminal, or other proceedings, indemnify, protect and save and hold harmless the City and all elected officials, appointed officers, employees and staff, volunteers, agents, representatives, contractors, subcontractors and/or consultants of the City from and against all losses, damages or liability that may be suffered from the acts or from the omissions of the Buyer and/or from the agents, representatives, employees, contractors, subcontractors, consultants, successors, invitees, and/or assigns of the Buyer, in the performance or non- performance of this Agreement The Buyer hereby waives and relinquishes any claims it may have against the City arising from any Agency default under the DDA. The Buyer shall procure and maintain in effect at all times general liability insurance in the combined/single amount of $2,000,000 each occurrence and $4,000,000 aggregate, at its sole cost and expense, and shall name and designate the City and the Agency as "additional insureds" on the general liability insurance policy. The limits of the policy shall not be a limit on the liability of the Buyer under this section. Section 4. Term of Aereement. The term of this Agreement shall commence on the Effective Date and shall survive the termination or expiration of the DDA. Section 5. Reoresentations and Warranties of the Buver. The Buyer makes the following representations and warranties to the City and the Buyer acknowledges that the execution of this Agreement by the City is made in material reliance by the City on such representations and warranties: (a) The Buyer has the legal right, power and authority to enter into this Agreement and the instruments, documents and agreements referenced in this Agreement and the Buyer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement. (b) This Agreement has been duly executed by the Buyer and shall be enforceable in accordance with its terms. 4 P\Agendas\Agenda Attachment,lAgenda AtlachmenlslAgenda AlIachments\Agrmts_Amend 2009\08-03_09 Meta Housinglnderrmificalion Agreement. Finaldoc~ CDC/2009-39 (c) The execution of this Agreement shall not result in a breach of, nor constitute a default under any other agreement, document, instrument or other obligation to which the Buyer is a party, or under any applicable Laws or any writ, injunction, order or decree of any court or governmental body applicable to the Buyer. (d) The Buyer shall timely perform the terms, covenants and conditions of this Agreement and shall comply with all applicable Laws. (e) The Buyer is not in default under the DDA and shall perform the terms, covenants and conditions of the DDA. Section 6. Events of Default. (a) An event of default shall occur under this Agreement whenever: (i) any Party fails to timely pay any amount due and owing under this Agreement and/or the DDA, (ii) any Party fails to perform any term, covenant or condition in this Agreement, (iii) the occurrence of a default under the DDA, (iv) any representation or warranty made by any Party in this Agreement and/or in the DDA is or becomes false and untrue, or (v) any Party files, or has filed against it, a petition in bankruptcy under federal or state bankruptcy laws, any Party is or becomes insolvent, any Party assigns its assets for the benefit of creditors, or whenever a court appoints a receiver or custodian over all or substantially all of the assets of any Party and such appointment is not discharged within sixty (60) calendar days thereafter. Upon the occurrence of an event of default, neither Party shall be under any further obligation under this Agreement, and the rights of the Parties hereunder shall be released and discharged; provided, however, that if the Party who is otherwise claimed to be in default by the other Party commences to cure, to correct or to remedy the alleged default within thirty (30) calendar days after receipt of written notice specifying such default and shall diligently complete such cure, correction or remedy, such Party shall not be deemed to be in default hereunder. (b) The Party which may claim that a default has occurred shall give written notice of default to the Party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured Party shall have no right to exercise any remedy for a default hereunder without delivering the written default notice as specified herein. (c) Any failure or delay by a Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. The rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party. (d) In the event that a default by either Party may remain uncured for more than thirty (30) calendar days following written notice or a lesser time as may be required by law, as provided above, a "breach" shall be deemed to have occurred. In the event of a breach, the Party who is not in default shall be entitled to seek any appropriate remedy or damages by initiating legal proceedings including, without limitation, the right to terminate this Agreement upon 5 PclAgendas\Agenda AnachmernslAgenda Allachment,\Agenda AttachmentslAgrmls-Amend 2009\08-03_09 Meta Housing IndemnificaTion Agreement _ Final,docx CDC12009-39 written notice to the Party in default and the right to enforce all rights and exercise all remedies provided for in this Agreement and the continuing covenants established hereunder, at law and in equity. Section 7. General Provisions. (a) Amendment. This Agreement may be amended or modified only by a written agreement executed by each of the Parties to this Agreement which amendment or modification must be approved by the Mayor and Common Council of the City. (b) Attornevs' Fees and Costs. The prevailing Party in any litigation or other action to enforce or interpret this Agreement shall be entitled to reasonable attorneys' fees, court costs, expert witnesses' fees, costs of suit and other and necessary disbursements in addition to any other relief deemed appropriate by a court of competent jurisdiction. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement shall be considered "reasonable attorneys' fees" for purposes of this Section. (c) Authoritv. Each signatory of this Agreement represents that such signatory is duly authorized to execute this Agreement on behalf of the Party for which such signatory executes this Agreement. Each Party represents that it has the appropriate legal authority to enter into this Agreement and to perform all obligations under this Agreement. (d) Construction and Interpretation. This Agreement has been arrived at through negotiations and each Party has had a full and fair opportunity to revise the terms of this Agreement. As a result, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in the construction or interpretation of this Agreement. Further, the singular form shall include the plural, the masculine shall include the feminine, and VIce versa. (e) Compliance with Laws. In performing their respective obligations under this Agreement, the Parties shall comply with and conform to all applicable Laws. (f) Conflicts of Interest. No Individual Liabilitv. No official or employee of the City and/or of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or employee of the City and/or of the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership, limited liability company, or association in which such official or employee is directly or indirectly interested. No official or employee of the City and/or of the Agency shall be personally liable in the event ofa breach of this Agreement by the City. (g) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. (h) Effectiveness of Agreement. This Agreement shall not be binding on the Buyer until executed by an authorized representative of the Buyer, approved by the Mayor and Common Council of the City and executed by the Mayor or his designee. 6 P:\AgendaslAgenda AttachmernslAgenda AtlRchmentslAgenda Attachmenls\Agrmls_Amend 2009\08-03-09 Meta Housing Indemnification Agreement. Fina1.doex CDC/2009-39 (i) Entire Agreement. This Agreement constitutes the entire agreement between the Parties. This Agreement supersedes all prior negotiations, discussions, and agreements between the Parties concerning the subject matters covered herein. The Parties intend this Agreement to be the final expression of their agreement with respect to the subjects covered herein and a complete and exclusive statement of such terms. (j) Estonnel Certificate. The City agrees to, within twenty (20) calendar days following any written notice from the Buyer, deliver to any potential purchaser or lender a commercially-reasonable estoppel certificate certifYing; (i) whether, to the City's knowledge, there are any then-current claims or defaults under this Agreement, and (ii) any other information regarding this Agreement reasonably requested by such purchaser or lender. (k) California. Governing Law. This Agreement shall be governed by the laws of the State of (I) Headings. The paragraph headings used in this Agreement are intended for convenience only and shall not be used in interpreting this Agreement or in determining any of the rights or obligations of the Parties to this Agreement. (m) Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except for its conflicts of law rules. Any suit, action or proceeding brought under the scope of this Agreement shall be brought and maintained to the extent allowed by law in the County of San Bernardino, State of California. (n) Necessarv Actions. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (0) Notices. All notices, requests, demands or other communications required or permitted under this Agreement shall be in writing unless provided otherwise in this Agreement and shall be deemed to have been duly given and received on; (i) the date of service if served personally or served by facsimile transmission on the Party to whom notice is to be given at the address or addresses as provided below, (ii) on the first business day after mailing, if mailed or dispatched by Federal Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid and addressed as provided below, or (iii) on the 3'd business day after mailing if mailed to the Party to whom notice is to be given by first class mail, registered or certified, postage prepaid, addressed as follows; To the Buyer; Magnolia Highland, L.P. Attention; John M. Huskey 1640 Sepulveda Boulevard, Suite 425 Los Angeles, CA 90025 Phone: (310) 575-3543 Fax; (310) 575-3563 P:\Agendas\Agenda Alllchments\Agenda Allachrnem,IAgeoda AttachmentslAgrmts_Amend 2009\08_Q)_09 Meta Housinglndernnitication Agreement _ Final.docx 7 CDC12009-39 To the City: City of San Bernardino Attention: City Attorney 300 North "DO' Street, 6th Floor San Bernardino, California 924 18 Phone: (909) 384-5355 Fax: (909) 384-5238 To the Agency: Redevelopment Agency of the City of San Bernardino Attention: Interim Executive Director 201 North "EO' Street, Suite 301 San Bernardino, California 92401 Phone: (909) 663-1044 Fax: (909) 888-9413 (P) Partial Invaliditv. Each Party agrees to execute and to deliver additional agreements, documents and instruments and to take any additional actions as may be reasonably required to carry out the purposes of this Agreement. (q) Representation and Warranties. Each representation and warranty contained herein or made pursuant hereto shall be deemed to be material and to have been relied upon and shall survive the execution, delivery, performance, expiration or termination of this Agreement. (r) Severability. Each and every Section of this Agreement shall be construed as a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof to certain circumstances shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is declared invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (s) Successors and Assigns. This Agreement shall be binding on all successors and assigns of the Buyer. The City may assign and delegate its rights, title, interest and obligation in, to and under this Agreement without obtaining the prior consent of the Buyer. (t) Third Partv Beneficiaries. Except for the Agency, this Agreement shall not create any right or interest in any non-Party or in any member of the public as a third party beneficiary. The Agency is not a party to this Agreement but the Agency shall have the right to enforce this Agreement in the event the City does not enforce the payment or non-payment obligations of the Buyer under this Agreement. (u) Time is of the Essence. Time is of the essence in this Agreement. (v) Waivers. Waiver of any breach or default hereunder shall not constitute a continuing waiver or a waiver of any subsequent breach either of the same or of another provision of this Agreement and forbearance or enforce one or more of the remedies provided in the Agreement shall not be deemed to be a waiver of that remedy. P:\AgendasIAgenda Attachment.lAgende AllachmentslAgenda Attachmems\.Agrmts_Amend 2009108_03_09 Meta Housing Indemnification Agreement _ FinaLdocx 8 CDC/2009-39 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date indicated next to the authorized signatures of the officers of each of them as appear below. CITY City of San Bernardino, a charter city Date: /tJ-orbr n4~~ Approved as to Form: By: ,(l~ es F. Penman, City Attorney BUYER Magnolia Highland, L.P., a California limited partnership By: Magnolia Highland, LLC, a California limited liability company Its: Administrative General Partner Jo Iv Date: 7'- 1- D 'j By: By: W s rn Community Ca ifornia non-profit Corporation Housing, public Inc., a benefit Its: Managing General Partner Date: fJ-3 -0 ~ By: 9 P:lAgendaslAgenda Attachmenls\Agenda Allachmem'IAgenda AUachments\A!\rmts-Amend 2009\08-03-09 Meta IInu,jng Indemnification Agreemern _ Final.do," CDC/2009-39 State of California ) County of San Bernardino ) On .~fp.t. f: ?oo'7 ' before me V\!\a"-:"",,, ~;" f\.t~'J P...~l:~ , personally appeared --leI. '^ VII\. !+V5!{."!- I, who proved to me on the basis of satisfactory evidence to be tll1e person~) whose name(.s.) Is/~ subscnbed to the within instrument and acknowledged to me that he/:<he/tlley executed the same in hislhefitheir authorized capacity(ies), and that by hislher/their signature(G) on the instrument the person(-s}, or the entity upon behalf of which the person(-s} acted, executed the instrument. I certify under PENALTY OF PERJURY under th the foregoing paragraph is true and correct. WITNESS my hand and official seal. @ MARIAN Commission 11171M41 . Notary Public . clue .,. Los An"," c....., M Comm. 27 201 at Signature vY\~ ~ '- (Seal) State of California County of San Bernardino ) ) On , before me , personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 10 P:\Agendas\Agenda Anacllmenu\Agenda AllachmemslAgenda Anachmenls\Agrmls-Amend 2009\08_03.09 Meta Housing IndemnifICation Agreement _ Final.doc~ CDC/2009-39 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT ~.<'-:'.-:~~~:~--'_D.0::':~~)_'/:<f2,;:!..'jR~1~:_,?-:":':;;:S::2:'.c<OO: d'..::x'2;Q:~^;.--S:&!...r:<',"''<A'XY''',,-<,..c~~-:;;<;~-..:;;'!...~~~:_';./( :':'i.'''--::::~?'-~-',>.:~~~,:,..~~-_:-,::::L:/.,,~ State of California County of Oranae On 9 / D J .) DO C; I Date } before me,Barbara Defeo. Notary Public Here Insert Name and T'lle ot lhe Officer personally appeared T p;::r,nnc rprllnfren Name(s)01 Signe,(s) 1 fjBARBA';ADE~~o^E ~;, COMM. #1680058 () U '. -" - NOTARYPUBUC.CAUFORN1A-t co ORANGE COUNTY 0 J Mycomm,E,lIPlreSJUIY82010 V Y v-v .... v y '" v y V ...y"'~ Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(fJ whose name~ is/ar:e subscribed to the within instrument and acknowledged to me that ~hey executed the same in R+@'t~ authorized capacity(iest, and that by Ois@..... signature(l'1 on the instrument the person(1), or the entity upon behaif of which the person(~ acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ~,~ SJgnatureofNo!ary~bIIC 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 " .2(.\)1 \)efen'>(...Jlf\J~mn(t(6-+"-,,-lt,, j.. Title or Type of Document 01 a.",," V).(h;"h~Q:~11 .Jf- ,\$--~ Document Date: ~JLO 1.) ..___ Signer(s) Other Than Named Above" Capacity(ies) Claimed by Signer(s) Signer's Name: Jndividual Corporate Officer - Title(s): Partner - ,J Limited _i General Attorney in Fact Trustee Guardian or Conservator Other: I , LJ Signer Is Representing: ~I(l HC-'-'h~ rJ."'__,'i1.1. ,.( ( A ,- tY-1'l j W"la ~''\.c (,,,... I.~l 'bL(\,-) , l? Number of Pages: Signer's Name. : J Individual Corporate Officer - Title(s): -, Partner - -.J Limited U General I Attorney in Fact : Trustee _ Guardian or Conservator I Other I LJ Signer Is Representing: ."i/:<'. '-.;;":::_'.C' C02007 NallOnal Notary Association. 9350 De Soto Ave, PO_ Box 2402' Chatsworth, CA 91313-2402' www!\jationaINolary.o'G Item ~5907 Reorder; Call Toll-Free 1-800-876-6827 CDC/2009-39 EXHIBIT "A" Legal Description of the Property 11 P:\Agenda.slAgenda AttachmentslAgend. Attachment,IAgend. AttachmentslAgrmts-Amend 2009\0&-03-09 Meta Housing Indemnifieal;on Agreement _ Fina1.docx