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Failure by the Developer to timely send the Title Notice Waiver, where the Title Notice Response or Authority's failure to deliver the Title Notice Response results in Authority's election not to address one or more matters set forth in the Title Notice to the Developer's reasonable satisfaction, will be deemed the Developer's continued refusal to accept the title to and conveyance of the Property, in which case each of the Developer and Authority shall have the right to cancel the Escrow and terminate this Agreement upon seven (7) days' Notice, in its sole and absolute discretion.
2.5.5. Disapproval of Encumbrances Securing Authority Obligations.
Notwithstanding any other provision of this Agreement, the Developer disapproves any and all encumbrances against the Property securing monetary (other than non-delinquent property taxes) or performance obligations of Authority, or related to lease revenue bonds. All such encumbrances shall be removed from the Property by Authority, prior to the Close of Escrow, at its sole cost and expense.
2.5.6. No Termination Liability. Any termination of this Agreement and cancellation of the Escrow pursuant to this Section 2.5 shall be without liability to the other Parties or any other Person, and shall be accomplished by delivery of a Notice of termination to the other Parties and the Escrow Agent at least seven (7) days prior to the termination date, in which case the Parties and the Escrow Agent shall proceed pursuant to Section 3.11. Once a Notice of termination is given pursuant to this Section 2.5, delivery of a Title Notice or Title Notice Waiver shall have no force or effect and this Agreement shall terminate in accordance with the Notice of termination.
2.6 Delivery of Property Free of Occupants.
At the Close of Escrow, Authority will deliver possession of the Property to Developer free and clear of any contractual rights created by or with the consent of Authority for any Person (other than Developer) to use or occupy the Property.
2.7 Acceptance of Property "AS-IS".
Except to the extent of any express representations and warranties of Authority specifically set forth in this Agreement (if any) the Close of Escrow shall evidence Developer's unconditional and irrevocable acceptance of the Property in the Property's AS IS, WHERE IS,
SUBJECT TO ALL FAULTS CONDITION, WITHOUT WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR CONDITION, including any warranty as to title, physical condition, soil conditions, the presence or absence of fill, subsurface support, zoning, land use restrictions, the availability or location of utilities or services, the location of any public infrastructure on or off of the Property (active, inactive or abandoned), the suitability of the Property for the Project or other use or the existence or absence of Hazardous Substances (excepting any Hazardous Substance Discharge by Authority) and with full knowledge of the physical condition of the Property, the nature of Authority's interest in and use of the Property, all Laws applicable to the Property, the Permitted Exceptions and any and all conditions, covenants, restrictions, encumbrances and all matters of record relating to the Property.
Developer represents and warrants to Authority that: (a) Developer has had ample opportunity to inspect and evaluate the Property and the feasibility of the uses and activities Developer is Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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entitled to conduct on the Property in accordance with this Agreement; (b) Developer is experienced in real estate development; (c) Developer is relying entirely on Developer's experience, expertise and its own inspection of the Property in its current state in proceeding with acquisition of the Property; (d) Developer accepts the Property in its present condition; and (e) to the extent that Developer's own expertise with respect to any matter regarding the Property is insufficient to enable Developer to reach an informed conclusion regarding such matter, Developer has engaged the services of Persons qualified to advise Developer with respect to such matters. The Close of Escrow shall constitute Developer's representation and warranty to Authority that Developer has received assurances acceptable to Developer by means independent of Authority Parties or City Parties of the truth of all facts material to Developer's acquisition of the Property pursuant to this Agreement and that the Property is being acquired by Developer as a result of its own knowledge, inspection and investigation of the Property and not as a result of any representation made by any Authority Party or City Party relating to the condition of the Property, unless such statement or representation is expressly and specifically set forth in this Agreement. Except to the extent of any express representations and warranties of Authority specifically set forth in this Agreement (if any), Authority and City hereby expressly and specifically disclaims any express or implied warranties regarding the Property.
2.8 Assignment of Property Information and Approvals.
If for any reason this Agreement is terminated, except as a direct result of an Authority Event of Default, without Developer acquiring the Property, Developer shall deliver or cause to be delivered to Authority, within twenty (20) days after Authority's written request and at no cost to Authority, all Property Information and documentation of all Approvals, subject to any unwaived restrictions set forth in any agreement between Developer and any Third Person regarding preparation of such Property Information or documentation by such Third Person, notwithstanding Developer's reasonable efforts to obtain a waiver of such restrictions. On such a request, the Property Information and all Approvals shall be deemed assigned to Authority, without the execution of any additional documents, upon a termination of this Agreement without Developer acquiring the Property. Developer shall, if requested by Authority, execute such other documents as Authority reasonably requests, to further document the assignment of the Property Information and all Approvals to Authority. Developer represents and warrants to Authority that it has the right, power and Authority to make the assignments set forth in this Section 2.8. Developer shall deliver the Property Information to Authority, pursuant to this Section 2.8, without representation or warranty of any kind. Developer shall take such actions and make such payments as may be necessary to preclude any Claim against Authority or the Property for any amounts owing by Developer regarding the Property Information. Developer shall Indemnify the Authority Parties against all Claims arising from any actual or alleged failure of Developer to pay any amount regarding any Property Information.
2.9 Developer to Obtain all Approvals for the Project.
2.9.1. Submission of Development Application. Developer shall exercise reasonable efforts to prepare and submit all required Applications, including without limitation the application for the Lot Line Adjustment, documents, fees, charges or other items (including, without limitation, deposits, funds or sureties in the ordinary course) required for the Construction of the Project, pursuant to all applicable Laws and Approvals, to each necessary Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Government for review and approval. Further, Developer shall exercise reasonable efforts to obtain all Approvals for the Construction of the Project on the Property from each Government, prior to the Project Commencement Date. Prior to commencement of any part of the Construction of the Project, Developer shall obtain all Approvals from each Government required for the Construction of the Project. The City's zoning, building and land use regulations (whether contained in ordinances, the City's municipal code, conditions of approval or elsewhere), including Section 13.14.080(G) of the Corona Municipal Code, which permits affordable housing developments meeting certain conditions to be served by one master water meter, shall be applicable to the Construction of the Project on the Property by Developer.
Developer acknowledges that the Project Plans and Specifications and any changes to the Project Plans or Specifications shall be subject to all applicable Laws and Approvals.
2.9.2. Reservations. The approval of this Agreement by the Authority and the City shall not be binding on the City Council, the Planning and Housing Commission, or any other commission, committee, board or body of the City regarding any Approvals of the Project required by such bodies. No action by the Authority or the City with reference to this Agreement or any related documents shall be deemed to constitute issuance or waiver of any required City Approval regarding the Property, the Project or Developer. The Parties acknowledge and agree that this Agreement is not a statutory development agreement pursuant to Government Code Sections 65864, et seq.
2.10 Environmental Review.
The Developer acknowledges that the obligations to convey the Property and to fund the Land Loan, the Fee Deferral Loan, the HOME-ARP Loan, and the Project Loan under this Agreement is conditioned on the completion of the environmental review process under NEPA and CEQA. The obligation to convey the Property or to fund the Land Loan, the Fee Deferral Loan, the HOME-ARP Loan or the Project Loan to Developer following completion of the environmental review process is within the sole, complete, unfettered, and absolute discretion of the Authority without limitation by or consideration of the terms of this Agreement; and the Authority makes no representation regarding the ability or willingness of the Authority to convey the Property or provide the Land Loan, the Fee Deferral Loan, the HOME-ARP Loan or the Project Loan at the conclusion of the environmental review process required by NEPA and CEQA, or regarding the imposition of any mitigation measures as conditions of any approval that may be granted. The Developer recognizes that, as a result of the environmental review process, the Authority has the absolute discretion and right to terminate this Agreement, and no cost shall be incurred by the Authority as a result of such termination.
2.11 Project Marketing Plan.
At least forty-five (45) calendar days prior to the Close of Escrow, Developer shall submit to Authority an affirmative fair housing marketing plan for the Project with procedures as specified in the Affirmative Fair Housing Marketing Plan Compliance Regulations of HUD (codified as 24 CFR Part 200.620(a)-(c)) and consistent with 24 C.F.R. 92.351(a) and 24 C.F.R.
92.253, or a similar affirmative fair marketing housing plan approved by Authority. Within ten (10) calendar days after Authority receives such marketing plan submitted by Developer, Authority shall approve or disapprove such marketing plan. Authority's failure to approve such Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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marketing plan within the specified ten (10) calendar day period, shall constitute Authority's disapproval of such marketing plan.
2.12 Authority Not to Encumber.
Authority agrees not to place any matters of record against the Property (other than Permitted Exceptions, the Lot Line Adjustment, and any matters arising from Authority's issuance or exercise of any remedy related to any Approval for the Project), prior to the Close of Escrow, without the prior written consent of Developer.
2.13 Preliminary Report Supplements.
If at any time following the Effective Date, the Title Company issues a supplement to the Preliminary Report, then any exceptions to the title to the Property set forth in the supplement and not previously shown as an exception to the coverage under the Title Policy shall be Permitted Exceptions, unless Developer delivers a Supplement Notice to Authority within twenty (20) calendar days following the date of the supplement. Authority shall have twenty (20) calendar days following receipt of a Supplement Notice to elect to deliver a Supplement Notice Response. If Authority elects in a Supplement Notice Response to cause the removal of any matter objected to in a Supplement Notice from the Preliminary Report or its effect to be insured against, Authority shall cause the removal of each such objectionable matter from the Preliminary Report or a commitment to issue such insurance to be issued by an appropriate insurance carrier, prior to the Close of Escrow, all to the reasonable satisfaction of Developer. If Authority is unwilling or unable to cause the removal of any one or more matters objected to in a Supplement Notice from the Preliminary Report or its effect to be insured against, all to the reasonable satisfaction of Developer, then, within ten (10) days following the earlier of: (a) Developer's receipt of the Supplement Notice Response or (b) passage of the time for Authority to deliver a Supplement Notice Response, Developer may either: (1) refuse to accept the title to and conveyance of the Property, in which case either Developer or Authority shall have the right to cancel the Escrow and terminate this Agreement, in its sole and absolute discretion, without liability to the other Parties or any other Person, by delivery of a Notice of termination to the other Parties and the Escrow Agent, or (2) Developer may waive its objection to any items set forth in a Supplement Notice by delivering a Supplement Notice Waiver to both Authority and the Escrow Agent. Failure by Developer to deliver a Supplement Notice Waiver, where a Supplement Notice Response or Authority's failure to deliver a Supplement Notice Response indicates Authority's election not to cause the removal of any matter objected to in a Supplement Notice from the Preliminary Report or to insure against its effect, within ten (10) days following Developer's receipt of such Supplement Notice Response or expiration of the time period for Authority to deliver such Supplement Notice Response under this Agreement, will be deemed Developer's disapproval of the title to and refusal to accept conveyance of the Property and both the Developer and Authority shall have the right to cancel Escrow and terminate this Agreement upon seven (7) days' Notice, in its sole and absolute discretion.
2.14 Right of Entry.
Prior to or upon the Close of Escrow, the Authority shall, to the extent that it still owns the Remainder Property, provide the Developer and its authorized employees, representatives, Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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agents and contractors, permission and a license to enter the Remainder Property for construction staging and for grading and installation of utilities that serve any portion of the Authority Property as set forth in City-approved plans. Prior to Developer or its authorized employees, representatives, agents and contractors entering upon the Remainder Property, Developer shall (i) give the Authority forty-eight (48) hours prior notice of such entry, and (ii) provide satisfactory evidence to the Authority that Developer, or its agents or contractors, have obtained commercial general liability insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate; workers compensation insurance in statutory limits and employers liability insurance with limits not less than $1,000,000 each limit; and umbrella excess liability insurance excess of the underlying commercial general liability and employers liability insurance with limits not less than $5,000,000 each occurrence and aggregate. Such liability insurance shall include or be endorsed (amended) to state that: (1) Developer, its directors, officials, officers, employees, agents, and volunteers shall be covered as additional insured; and (2) the insurance coverage shall be primary insurance as respects Developer, its directors, officials, officers, employees, agents, and volunteers, or if excess, shall stand in an unbroken chain of coverage. Such liability insurance policy shall be placed with an insurer with a current A.M.
Best’s rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. Developer shall defend, indemnify and hold the Authority and the Authority Parties free and harmless from and against any and all claims, damages and liabilities related to Developer’s or Developer’s employees, representatives, agents and contractors’ activities on the Remainder Property under this Section 2.14 (except for the discovery of Hazardous Substances on the Remainder Property which Developer or the Developer Parties did not cause to be located on the Remainder Property or except if related to the gross negligence or misconduct of the Authority or the Authority Parties). The indemnity obligations of Developer under this Section 2.14 shall survive the Closing or termination of this Agreement.
3. JOINT ESCROW INSTRUCTIONS
3.1. Opening of Escrow.
Authority, City and Developer shall cause the Escrow to be opened within five (5) days following the Effective Date by delivering a copy of this Agreement signed by all of the Parties to the Escrow Agent. The Escrow Agent shall promptly confirm the Escrow Opening Date in writing to each of the Parties, with a copy of the Escrow Agent Consent signed by the authorized representative(s) of the Escrow Agent. The provisions of this Section 3 are the joint escrow instructions of Authority, City and Developer to the Escrow Agent for conducting the Escrow.
3.2. Escrow Agent Authority.
Authority, City and Developer authorize the Escrow Agent to:
3.2.1. Charges. Pay and charge Developer for the applicable fees, taxes, charges and costs regarding the Escrow;
3.2.2. Settlement/Closing Statements. Release each Party's Escrow settlement/closing statement to the other Parties;
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3.2.3. Document Recording. File any documents delivered for recording through the Escrow with the office of the Recorder of the County for recordation in the official records of the County, pursuant to the joint instructions of the Parties; and
3.2.4. Counterpart Documents. Utilize documents that have been signed by Authority, City and Developer in counterparts, including attaching separate signature pages to one version of the same document.
3.3. Developer's Conditions to Close of Escrow.
Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Developer, Developer's obligation to purchase the Property from Authority on the Escrow Closing Date shall be subject to the satisfaction or waiver of each of the following conditions precedent, each of which can only be waived in writing by Developer:
3.3.1. Title Policy. The Title Company is, upon payment of the Title Company's premium for the Title Policy, irrevocably and unconditionally committed to issue the Title Policy to Developer, at the Close of Escrow;
3.3.2. Approvals. Final issuance of all discretionary Approvals required from any Government for the Construction of the Project on the Property, on terms and conditions reasonably acceptable to Developer;
3.3.3. Environmental Documents. Final adoption, approval or certification of the Environmental Documents;
3.3.4. Tax-Exempt Bonds and Tax Credits. Developer receives the Tax Credits reservation for the Project from TCAC and, if applicable, the allocation of tax-exempt bonds for the Project from CDLAC.
3.3.5. Authority and City Escrow Deposits. Authority and City deposit all of the items into the Escrow required by Section 3.6;
3.3.6. Settlement/Closing Statement. Developer approves the Escrow Agent's estimated Escrow closing/settlement statement;
3.3.7. Authority Pre-Closing Obligations. Authority performs all of its material obligations required to be performed by Authority under this Agreement prior to the Close of Escrow.
3.3.8. Lot Line Adjustment. The Lot Line Adjustment has been approved by all applicable Governments and has been recorded on the Authority Property in the official records of the County.
3.3.9 General Plan Consistency Determination. The Planning and Housing Commission for the City of Corona shall have determined that the City’s disposition of fee title to the Property pursuant to this Agreement is consistent with the City of Corona General Plan pursuant to Government Code Section 65402.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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3.3.10 HCD Confirmation. Authority shall have confirmed in writing that the California Department of Housing and Community Development (“HCD”) has accepted Authority’s declaration of the Authority Property as “exempt surplus property” under the Surplus Land Act (California Government Code section 54220 et seq.).
3.4. Authority's Conditions to Close of Escrow.
Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Authority, Authority's obligation to sell the Property to Developer on or before the Escrow Closing Date shall be subject to the satisfaction or waiver of each of the following conditions precedent, each of which can only be waived in writing by Authority:
3.4.1. Document Approval. Authority has received from Developer and approved (which approval shall not be unreasonably conditioned or delayed) all of the following described items in Authority's reasonable discretion, unless another provision of this Agreement provides for approval of such document in the Authority's sole and absolute discretion, in which case the Authority shall have approved the document in the Authority's sole and absolute discretion. Except as otherwise expressly provided in this Agreement, by the date set for commencement of construction as set forth in the written confirmation from TCAC to Developer of the reservation of the Tax Credits for the Project, Developer shall deliver all of the documents listed in this Section 3.4.1 in substantially final form; provided, however, Developer shall use commercially reasonable efforts to provide final versions of such documents to Authority at least seven (7) calendar days before the Close of Escrow. Developer shall have all of the following described documents completed and signed by all of the Persons required to make such documents operative and shall have delivered true, accurate and legible copies or originals of all such documents (as specified in this Agreement) to Authority, prior to the Close of Escrow:
(a) Developer Entity Documents;
(b) A copy of the Construction Contract in substantially final form (with a copy of the final Construction Contract being delivered to Authority prior to Close of Escrow);
(c) All Insurance Documents;
(d) A copy of the Construction Financing Documents in substantially final form (with copies of the final Construction Financing Documents being delivered to Authority prior to Close of Escrow);
(e) Documents evidencing a commitment from an Institutional Lender to Developer to provide the Permanent Loan; and
(f) A marketing plan for the Project pursuant to Section 2.11.
3.4.2. Title. The Developer accepts the state of the title of the Property, in accordance with Section 2.5;
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3.4.3. Title Policy. The Title Company is, upon payment of the Title Company's premium for the Title Policy, irrevocably and unconditionally committed to issue the Title Policy to Developer, at the Close of Escrow;
3.4.4. Approvals. Final issuance of all discretionary Approvals required from any Government for the Construction of the Project on the Property, on terms and conditions reasonably acceptable to Authority;
3.4.5. Environmental Documents. Final adoption, approval or certification of the Environmental Documents;
3.4.6. Tax-Exempt Bonds and Tax Credits. Authority receives evidence reasonably satisfactory to Authority that Developer has received the Tax Credits reservation for the Project from TCAC and, if applicable, the allocation of tax-exempt bonds for the Project from CDLAC;
3.4.7. Construction Financing. A Permitted Security Instrument securing repayment of the Construction Financing and approved by Authority has been deposited into the Escrow and is in a condition to be recorded against the Property at the Close of Escrow and the Construction Financing is in a condition to fund promptly following the Close of Escrow;
3.4.8. Developer Escrow Deposits. Developer deposits all of the items into the Escrow required by Section 3.5;
3.4.9. Settlement/Closing Statement. Authority approves the Escrow Agent's estimated Escrow closing/settlement statement; and
3.4.10. Developer Pre-Closing Obligations. Developer performs all of its material obligations required to be performed by Developer under this Agreement prior to the Close of Escrow.
3.4.11. Lot Line Adjustment. The Lot Line Adjustment has been approved by all applicable Governments and has been recorded on the Authority Property in the official records of the County.
3.4.12. General Plan Consistency Determination. The Planning and Housing Commission for the City of Corona shall have determined that the City’s disposition of fee title to the Property pursuant to this Agreement is consistent with the City of Corona General Plan pursuant to Government Code Section 65402.
3.4.13. HCD Confirmation. Authority shall have confirmed in writing that the California Department of Housing and Community Development (“HCD”) has accepted Authority’s declaration of the Authority Property as “exempt surplus property” under the Surplus Land Act (California Government Code section 54220 et seq.).
3.4.14. Separate Deeds of Trust. Notwithstanding anything in this Agreement to the contrary, the Authority and City reserve the right, in their sole discretion, to require Developer to provide four separate deeds of trust, in substantially the same form as set forth in Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “G” attached to this Agreement, which will separately pledge the Property as collateral to secure payment for the Project Note, the Fee Deferral Note, the HOME-ARP Note and the Land Note rather than the single Deed of Trust.
3.5. Developer's Escrow Deposits.
At least one (1) Business Day prior to the Escrow Closing Date scheduled by the Escrow Agent in a writing delivered to all of the Parties, Developer shall deposit the following described funds and documents into the Escrow and, concurrently, provide a copy of each such document to Authority:
3.5.1. Notice of Agreement. The Notice of Agreement signed by the authorized representative(s) of Developer in recordable form which shall be recorded against the entire Property.
3.5.2. Insurance Documents. All Insurance Documents, as approved by Authority;
3.5.3. Regulatory Agreement. The Regulatory Agreement signed by the authorized representative(s) of Developer in recordable form, which shall be recorded against the Property;
3.5.4. Construction Financing Security Instrument. A Permitted Security Instrument securing repayment of the Construction Financing, executed by the authorized representative(s) of Developer in recordable form, to be recorded against the Property at the Close of Escrow;
3.5.5. Bond Regulatory Agreement. If applicable, a regulatory agreement as required by the issuer of tax-exempt bonds for the Project, executed by the authorized representative(s) of Developer in recordable form, to be recorded against the Property at the Close of Escrow;
3.5.6. Land Note. The Land Note signed by the authorized representative(s) of Developer;
3.5.7. Fee Deferral Note. The Fee Deferral Note signed by the authorized representative(s) of Developer;
3.5.8. Project Note. The Project Note signed by the authorized representative(s) of Developer;
3.5.9. HOME-ARP Note. The HOME-ARP Note signed by the authorized representative(s) of Developer;
3.5.10. Deed of Trust. The Deed of Trust signed by the authorized representative(s) of Developer in recordable form, which shall be recorded against the entire Property or, alternatively, to the extent the Authority and City exercise their right under Section
3.4.14, four separate deeds of trust, signed by the authorized representative(s) of Developer in Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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recordable form, which shall be recorded against the entire Property to secure payment for the Project Note, the Fee Deferral Note, the HOME-ARP Note and the Land Note;
3.5.11. Subordination Agreements. Subordination agreement(s) subordinating the Deed of Trust in the form provided by an Institutional Lender for Construction Financing, reasonably approved by the Authority and the City pursuant to Section 2.3.4 and signed by the authorized representative(s) of Developer in recordable form, which shall be recorded against the entire Property;
3.5.12. Density Bonus Agreement. The Density Bonus Agreement approved by the City Council on August 7, 2024 signed by the authorized representative(s) of Developer in recordable form, which shall be recorded against the entire Property;
3.5.13. Final Project Budget and Schedule of Performance. An updated and final Project Budget and Schedule of Performance that has been approved by the Authority's Executive Director; and
3.5.14. Other Funds and Documents. Such documents required from Developer under the terms of this Agreement to close the Escrow, including funds as required to pay all Escrow closing costs, which shall be the sole responsibility of Developer, or by the Escrow Agent in the performance of the Escrow Agent's contractual or statutory obligations relating to the Escrow.
3.6. Authority's and City's Escrow Deposits.
At least one (1) Business Day prior to the Escrow Closing Date scheduled by the Escrow Agent in a writing delivered to all of the Parties, Authority and City shall deposit the following described funds and documents into the Escrow and, concurrently, provide a copy of each such document to Developer:
3.6.1. Deed. The Deed signed by the authorized representative(s) of Authority in recordable form, conveying the Property to the Developer;
3.6.2. Notice of Agreement. The Notice of Agreement signed by the authorized representative(s) of Authority and City in recordable form, which shall be recorded against the entire Property;
3.6.3. Regulatory Agreement. The Regulatory Agreement signed by the authorized representative(s) of Authority and City in recordable form, which shall be recorded against the entire Property;
3.6.4. Subordination Agreements. Subordination agreement(s) subordinating the Deed of Trust in the form provided by an Institutional Lender for Construction Financing, reasonably approved by the Authority and the City pursuant to Section 2.3.4 and signed by the authorized representative(s) of Authority and City in recordable form, which shall be recorded against the entire Property;
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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3.6.5. FIRPTA Certificate. The FIRPTA Certificate signed by the authorized representative(s) of Authority;
3.6.6. Form 593. A Form 593 signed by the authorized representative(s) of Authority;
3.6.7. Density Bonus Agreement. The Density Bonus Agreement approved by the City Council on August 7, 2024 signed by the authorized representative(s) of City in recordable form, which shall be recorded against the entire Property; and
3.6.8. Other Funds and Documents. The principal amount of the HOME-ARP Loan, the Project Loan and such other funds or documents required from Authority or City under the terms of this Agreement to close the Escrow or by the Escrow Agent in the performance of the Escrow Agent's contractual or statutory obligations regarding the Escrow.
3.7. Closing Procedure.
When each of Developer's Escrow deposits, as set forth in Section 3.5, and each of Authority's and City's Escrow deposits, as set forth in Section 3.6, are deposited into the Escrow, the Escrow Agent shall request Notice from both Developer and Authority (on behalf of Authority and City) that each of their respective conditions to the Close of Escrow, as set forth in Sections 3.3 and Section 3.4, respectively, are satisfied or waived. Upon the Escrow Agent's receipt of Notice from both Authority and Developer that each of their respective conditions to the Close of Escrow are either satisfied or waived, the Escrow Agent shall schedule the Escrow Closing Date by Notice to all Parties and, thereafter, shall close the Escrow on or before the Escrow Closing Date by doing all of the following:
3.7.1. Recordation and Distribution of Recorded Documents. The Escrow Agent shall file the following documents with the office of the Recorder of the County for recording in the official records of the County, in the following order, at the Close of Escrow:
(a) the Deed; (b) if applicable, the regulatory agreement required by the issuer of tax-exempt bonds for the Project; (c) a Permitted Security Instrument securing the Construction Financing; (d) the Regulatory Agreement; (e) the Notice of Agreement; (f) the Deed of Trust; (g) the Density Bonus Agreement; (h) the subordination agreements approved pursuant to Section 2.3.4, if any; and (i) any other documents to be recorded through the Escrow upon the joint instructions of Authority (on behalf of Authority and City) and Developer. The Escrow Agent shall deliver conformed copies of all documents filed for recording in the official records of the County through the Escrow to Authority, City, Developer and any other Person designated in the written joint escrow instructions of the Parties to receive an original or conformed copy of each such document. Each copy of a document filed for recording shall show all recording information.
The Parties intend and agree that this Section 3.7 shall establish the relative priorities of the documents to be recorded in the official records of the County through the Escrow, by providing for recordation of Senior interests prior in time to junior interests, as provided in this Section 3.7;
3.7.2. Distribution of Other Documents. The Escrow Agent shall deliver copies of all documents to be delivered through the Escrow that are not to be recorded to Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Authority, City, Developer and any other Person designated in the written joint escrow instructions of the Parties to receive an original or copy of each such document;
3.7.3. Title Policy. Obtain and deliver the Title Policy to Developer;
3.7.4. Funds. Deliver all funds held by the Escrow Agent for the account of Authority to Authority and for the account of City to City, less any charges to the account of Authority or City pursuant to the terms of this Agreement, and deliver the Project Loan in the sum of Seven Million Five Hundred Thirty-Five Thousand Two Hundred Eighty Dollars ($7,535,280.00), and deliver the HOME-ARP Loan in the sum of Five Hundred Twenty-Nine Thousand Eight Hundred Seventy-Five Dollars ($529,875.00) when and as needed to be used to finance the Project's predevelopment, development and construction costs, and all other remaining funds held by the Escrow Agent for the account of Developer to Developer, less of the Escrow closing costs which shall be paid solely by Developer, and less any other charges to the account of Developer pursuant to the terms of this Agreement.
3.7.5. FIRPTA Certificate. File the FIRPTA Certificate with the United States Internal Revenue Service;
3.7.6. Form 593. File the Form 593 with the State of California Franchise Tax Board; and
3.7.7. Report to IRS. Following the Close of Escrow and prior to the last date on which such report is required to be filed with the United States Internal Revenue Service, if such report is required pursuant to Section 6045(e) of the United States Internal Revenue Code, the Escrow Agent shall report the gross proceeds of the sale of the Property pursuant to this Agreement to the United States Internal Revenue Service on Form 1099-B, Form W-9 or such other form(s) as may be specified by the United States Internal Revenue Service pursuant to Section 6045(e) or its associated Federal regulations. Upon the filing of such reporting form with the United States Internal Revenue Service, the Escrow Agent shall deliver a copy of the filed form to both Authority and Developer.
3.8. Close of Escrow.
The Close of Escrow shall occur on or before the Escrow Closing Date. Authority (on behalf of Authority and the City) and Developer may mutually agree to change the Escrow Closing Date by joint written instruction to the Escrow Agent. The Authority Executive Director is authorized to agree to one or more extensions of the Escrow Closing Date on behalf of Authority and the City up to a maximum time period extension of six (6) months in the aggregate, in the Authority Executive Director's sole and absolute discretion. If for any reason (other than a Default or Event of Default by such Party) the Close of Escrow has not occurred on or before the Escrow Closing Date, then either Authority or Developer, if not then in Default under this Agreement, may cancel the Escrow and terminate this Agreement, without liability to any other Party or any other Person for such cancellation and termination, by delivering written Notice of termination to the other Parties and the Escrow Agent. Following any such Notice of termination of this Agreement and cancellation of the Escrow, the Parties and the Escrow Agent shall proceed pursuant to Section 3.11. Without limiting the right of either Authority or Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Developer to cancel the Escrow and terminate this Agreement, pursuant to the first sentence of this Section 3.8, if the Escrow does not close on or before the Escrow Closing Date and neither Authority nor Developer has exercised its contractual right to cancel the Escrow and terminate this Agreement under this Section 3.8 before the first date on which the Escrow Agent Notifies the Parties that the Escrow is in a position to close, then the Escrow shall close as soon as reasonably possible following the first date on which the Escrow Agent Notifies the Parties that the Escrow is in a position to close, pursuant to the terms and conditions of this Agreement.
3.9. Escrow Closing Costs, Taxes and Title Policy Premium.
Developer shall pay all Escrow fees and such other costs as the Escrow Agent may charge for conducting the Escrow. Developer shall pay the premium charged by the Title Company for the Title Policy, including any endorsements or other supplements to the coverage of the Title Policy that may be requested by Developer, and any County documentary transfer tax arising from the transfer of the Property from Authority to Developer at the Close of Escrow.
Developer shall pay any and all recording fees, any and all other charges or fees due at the Close of Escrow, taxes levied by any Government arising from or relating to the sale of the Property pursuant to this Agreement through the Escrow and the cost of any endorsements or supplements to the coverage of the Title Policy requested by Developer. The Escrow Agent shall Notify Developer and Authority of the costs to be borne by Developer at the Close of Escrow by delivering the Escrow Agent's estimated Escrow closing/settlement statement to both Authority and Developer, at least two (2) Business Days prior to the Escrow Closing Date.
3.10. Escrow Cancellation Charges.
If the Escrow fails to close due to an Event of Default attributable to Authority, Authority shall pay all customary and reasonable cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any. If the Escrow fails to close due to an Event of Default attributable to Developer, Developer shall pay all customary and reasonable cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any. If the Escrow fails to close for any reason other than an Event of Default attributable to either Developer or Authority, Developer and Authority shall each pay one-half (1/2) of all customary and reasonable cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any.
3.11. Escrow Cancellation.
If the Escrow is cancelled and this Agreement is terminated pursuant to a contractual right granted to a Party in this Agreement to cancel the Escrow and terminate this Agreement, Authority and Developer shall pay any associated cancellation charges in accordance with Section 3.10 and do each of the following:
3.11.1. Cancellation Instructions. The Parties shall, within three (3) Business Days following receipt of the Escrow Agent's written request, execute any reasonable Escrow cancellation instructions requested by the Escrow Agent; and
3.11.2. Return of Funds and Documents. Within seven (7) days following receipt by the Parties of a settlement statement from the Escrow Agent of cancellation charges Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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regarding cancellation of the Escrow and the Title Policy order, if any: (a) Developer or the Escrow Agent, respectively, shall return to Authority and City any documents previously delivered by Authority and City to Developer or the Escrow Agent regarding this Agreement, the Property or the Escrow; (b) Authority, City or the Escrow Agent, respectively, shall return to Developer all documents previously delivered by Developer to Authority, City or the Escrow Agent regarding this Agreement, the Property or the Escrow, except any Property Information; (c) the Escrow Agent shall return to Developer any funds deposited into the Escrow by Developer, less Developer's share of any customary and reasonable cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any, in accordance with Section 3.10; and (d) the Escrow Agent shall return to Authority any funds deposited into the Escrow by Authority, less, Authority's share of any customary and reasonable cancellation charges regarding cancellation of the Escrow and the Title Policy order, if any, in accordance with Section 3.10.
3.12. Escrow Notices.All Notices from the Escrow Agent to the Parties shall be given in the manner provided in Section 8.1 of this Agreement.
4. PROJECT DEVELOPMENT
4.1. Developer's Covenant to Develop the Project.
Developer covenants to and for the benefit of the Authority and City that Developer shall commence, pursue and complete the development of the Project in accordance with the deadlines and other requirements of this Agreement, including but not limited to the Schedule of Performance set forth in Exhibit “N” and Project Scope and Development set forth in Exhibit “H”. Developer covenants and agrees for itself, its successors and assigns that the Property shall be improved and developed with the Project, in conformity with the terms and conditions of this Agreement and all applicable Laws and conditions of each Government. The construction contract for the Project shall include all applicable federal requirements set forth in Exhibit "O".
The covenants of this Section 4.1 shall run with the Property, until the date of issuance of a Certificate of Completion for the Project.
4.2. Changes to Project Plans and Specifications During Course of Construction.
Developer shall have the right, during the course of Construction of the Project, to make "minor field changes," without seeking the approval of the Authority, if such changes do not affect the type of use to be conducted within all or any portion of a structure. "Minor field changes" shall be defined as those changes from the Approvals for the Project that have no substantial effect on the Project and are made in order to expedite the work of Construction in response to field conditions. Nothing contained in this Section 4.2 shall be deemed to constitute a waiver of or change in any Approvals governing any such "minor field changes" or any Approvals by any Government otherwise required for any such "minor field changes."
4.3. Construction Start and Completion of Project.
4.3.1 Commencement. Developer shall commence Construction of the Project no later than the Project Commencement Date. Thereafter, Developer shall diligently proceed to Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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pursue and complete the Construction of the Project, in a good and workmanlike manner, in accordance with this Agreement and all applicable Laws and all Approvals for the Project issued by each Government.
4.3.2 Completion. On or before the Project Completion Date, Developer shall do all of the following:
(a) Record a Notice of Completion, in accordance with California Civil Code Section 8182, for the entirety of the Project; (b) Cause the Project to be inspected by each Government, as required by the applicable Approvals or Laws, and correct any defects and deficiencies that may be disclosed by any such inspection;
(c) Cause all final Certificates of Occupancy (or equivalent approvals) and other Approvals necessary for the occupancy and operation of the completed Project to be duly issued; and
(d) Deliver the Placed In Service Information to the Authority.
4.3.3 Time Extensions. The Authority Executive Director (on behalf of Authority and City), in his or her sole and absolute discretion, may extend the Project Completion Date for up to an additional one hundred eighty (180) days, in the aggregate.
4.4. Compliance with Laws.
All work performed in connection with the Construction of the Project shall comply with all applicable Laws and Approvals.
4.5. Regular Progress Reports.
Prior to and during the period of Construction of the Project, Developer shall submit to Authority written progress reports and/or hold progress meetings when and as reasonably requested by Authority. The reports shall be in such form and detail as may reasonably be required by Authority.
4.6. Progress Meetings.
At the reasonable request of Authority, Developer shall schedule, coordinate and attend construction progress meetings. The purposes of such meetings shall include but not be limited to discussing engineering matters, changes, delays, and extensions, reviewing work progress in relation to the Project, sharing new information, reporting on any significant events or developments, and otherwise carrying out the purposes of this Agreement. Developer shall provide Authority at least 72 hours prior notice (written or telephonic) of each such meeting.
4.7. Project Schedule.
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Developer shall begin and complete the Project and undertake all obligations and responsibilities of Developer within the times specified in the Schedule of Performance or within such reasonable extensions of such times as may be granted by Authority Executive Director or designee (on behalf of Authority and City) or as otherwise provided for in this Agreement. Any and all deadlines for performance by the Parties shall be extended for any time attributable to Enforced Delay.
4.8. Developer Attendance at Authority Meetings.
Developer agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the development of the Project, such that such Person(s) can meaningfully respond to Authority governing body, City Council or Authority or City staff questions regarding the progress of the Project, attend meetings with Authority or City staff or meetings of the Authority governing body or City Council, when requested to do so by Authority staff, with reasonable advance Notice to Developer.
4.9. Authority Right to Inspect Project and Property.
The Authority Parties, for purposes of this Agreement on behalf of Authority and City, shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours, during the period of Construction of the Project. Any and all Authority representatives who enter the Property shall identify themselves at the Construction management office or, if none, to the apparent on-site Construction supervisor on the Property, upon their entrance onto the Property, and may be accompanied by a representative of Developer, while on the Property. Developer shall make a representative of Developer available for this purpose at all times during normal construction hours, upon reasonable advance Notice from the Authority. The Authority shall Indemnify Developer from injury, property damage or liability to the extent arising out of the exercise by the Authority of the right of access to the Property provided in this Section 4.9, except to the extent that any such injury, property damage or liability arises from the negligence or willful misconduct of any Developer Parties. If in the Authority's reasonable judgment it is necessary, the Authority shall have the further right, from time to time, at its own cost, to retain a consultant or consultants to inspect the Project and verify compliance by Developer with the provisions of this Agreement. Developer acknowledges and agrees that any such Authority inspections are for the sole purpose of protecting the Authority's rights under this Agreement, are made solely for the Authority's benefit, the Authority's inspections may be superficial and general in nature, and are for the purposes of informing the Authority of the progress of the Project and the conformity of the Project with the terms and conditions of this Agreement, and Developer shall not be entitled to rely on any such inspection(s) as constituting the Authority's or the City's approval, satisfaction or acceptance of any materials, workmanship, conformity of the Project with this Agreement or otherwise.
Developer agrees to make its own regular inspections of the work of Construction of the Project to determine that the progress and quality of the Project and all other requirements of the work of Construction of the Project are being performed in a manner satisfactory to Developer.
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4.10. Prevailing Wages.
4.10.1. Responsibility. Developer shall carry out the construction through completion of the Project in conformity with all applicable federal, state and local labor laws and regulations, including, without limitation, as applicable, the requirements to pay prevailing wages under federal law (the Davis-Bacon Act, 40 U.S.C. Section 3141, et seq., and the regulations promulgated thereunder set forth at 29 CFR Part 1 (collectively, “Davis-Bacon”)) and California law (Labor Code Section 1720, et seq.). Developer shall assume any and all responsibility and be solely responsible for: (a) determining whether or not laborers employed relative to the Construction of the Project must be paid the prevailing per diem wage rate for their labor classification, as determined by the State, pursuant to Labor Code Sections 1720, et seq. or pursuant to Davis-Bacon, and (b) causing all contractors and subcontractors to pay such wages and comply with all applicable provisions of Davis Bacon and Labor Code Sections 1720, et seq. and implementing regulations of the Department of Industrial Regulations in the event that it is determined that laborers employed relative to the construction of the project must be paid the prevailing per diem wage rate for their labor classification, either by Developer or as the result of a prevailing wage action.
4.10.2. Waivers and Releases. Developer, on behalf of itself, its successors, and assigns, waives and releases Authority and City from any right of action that may be available to any of them arising out of Developer's responsibilities under Section 4.10.1, including but not limited to any right of action pursuant to Labor Code Section 1781 and/or Davis-Bacon.
Relative to the waiver and release contained in this Section 4.10.2, Developer acknowledges the protections of Civil Code Section 1542, which reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.
4.10.3. Initials. By initialing below, Developer knowingly and voluntarily waives the provisions of Section 1542 solely in connection with the waivers and releases of Section 4.10.2.
_________________
Initials of Authorized
Developer Representative
4.10.4. Indemnity. Additionally, Developer shall indemnify Authority and City, pursuant to Section 7.4.2, against any claims arising out of Developer's responsibilities under Section 4.10.1, including but not limited to any right of action pursuant to Labor Code Section 1781 and/or Davis-Bacon arising from this Agreement or the construction of all or any portion of the Project.
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4.11. Project Certificate of Completion.
4.11.1. Issuance. Following the issuance of a final Certificate of Occupancy for the Project by the City, excluding any Punchlist Work to be completed by the Developer, Developer may request that the Authority Executive Director inspect the completed Project and issue a Certificate of Completion for the Project on behalf of Authority and City. Following the Authority's receipt of such a written request from Developer, the Authority shall promptly inspect the Project to determine whether or not the Project has been completed in compliance with this Agreement. If the Authority Executive Director determines that the Project is complete (excluding any outstanding Punchlist Work) and in compliance with this Agreement, the Authority Executive Director shall issue a Certificate of Completion for the Project on behalf of Authority and City to Developer. If the Authority Executive Director determines that the Project is not complete or not in compliance with this Agreement, the Authority Executive Director shall send written Notice of each non-conformity to Developer, within fifteen (15) calendar days following the Authority's receipt of Developer's written request for a Certificate of Completion.
The statement shall also contain the Authority's opinion of the action(s) Developer must take to obtain a Certificate of Completion from the Authority. If the reason for Developer's failure to complete the Project is confined to the immediate unavailability of specific items or materials for Construction or landscaping at a price reasonably acceptable to Developer or other minor Punchlist Work, the Authority Executive Director may, in its sole and absolute discretion, issue a Certificate of Completion upon the posting of a bond or irrevocable standby letter of credit by Developer, in form and substance reasonably acceptable to the Authority Executive Director and the Authority's legal counsel, in an amount representing the fair value of the work on the Project remaining to be completed, as reasonably determined by the Authority Executive Director. If the Authority Executive Director fails to provide such written statement, within the specified time period, Developer shall be deemed, conclusively and without further action of the Authority, to have satisfied the requirements of this Agreement with respect to the Construction of the Project (excluding any outstanding Punchlist Work), as if a Certificate of Completion had been issued by the Authority Executive Director on behalf of Authority and City pursuant to this Agreement, and the same shall irrevocably be deemed to have been issued as of such date for all purposes of this Agreement; provided, however, that Authority Executive Director shall subsequently issue a Certificate of Completion on behalf of Authority and City, if requested to do so by Developer.
Notwithstanding anything herein to the contrary, Developer shall diligently complete all Punchlist Work and nothing herein shall be construed to relieve Developer of the obligation to complete the Punchlist Work.
4.11.2. Effect. A Certificate of Completion shall only be evidence of the Authority's conclusive determination (on behalf of Authority and City) of satisfactory completion of the Construction of the Project in accordance with the terms of this Agreement. A Certificate of Completion shall not constitute a Notice of Completion under California Civil Code Section 8182, nor shall it act to terminate the continuing reservations, covenants, restrictions or conditions contained in the Deed or any other instruments recorded against the Property or set forth in this Agreement or otherwise. A Certificate of Completion is not evidence of the compliance of the Project with any Laws or Approvals. A Certificate of Completion shall not evidence the satisfaction of any obligation of Developer to the Authority or City under this Agreement or otherwise, other than Developer's obligation to construct and install the Project on the Property. After the recordation of a Certificate of Completion for the Project, any Person Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property or the Project shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement regarding Construction of the Project, but such Person shall be bound by any other reservations, covenants, conditions, restrictions and interests affecting the Property pursuant to this Agreement.
5. INSURANCE
5.1. Developer.
Developer shall maintain, to protect the Authority Parties and City Parties against all insurable Claims resulting from the actions of Developer in connection with this Agreement, the Property and the Project, at the sole cost and expense of Developer, until issuance of a Certificate of Completion for the Project, the following insurance (or its then reasonably available equivalent): (a) Liability Insurance; (b) Automobile Liability Insurance; (c) Property Insurance; (d) Builder's Risk Insurance; and (e) Workers Compensation Insurance.
5.2. Nature of Insurance.
All Liability Insurance, Property Insurance and Automobile Liability Insurance policies this Agreement requires shall be issued by carriers that: (a) are listed in the then current "Best's Key Rating Guide—Property/Casualty—United States & Canada" publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of "A-" and a minimum financial size category of "IX" (exception may be made for the State Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in the State.
Developer may provide any insurance under a "blanket" or "umbrella" insurance policy, provided that: (i) such policy or a certificate of such policy shall specify the amount(s) of the total insurance allocated to the Property and the Project, which amount(s) shall equal or exceed the amount(s) required by this Agreement; and (ii) such policy otherwise complies with this Agreement.
5.3. Policy Requirements and Endorsements.
All insurance policies required by this Agreement shall contain (by endorsement or otherwise) the following provisions:
5.3.1. Insured. Liability Insurance and Automobile Liability Insurance policies shall name the Authority Parties and City Parties as "additional insured" (the endorsement form shall be at least as broad as ISO Form CG 20 10 11 85 or both CG 20 37 and one of the following: CG 20 10, CG 20 26, CG 20 33 or CG 20 38). Property Insurance and Builder's Risk Insurance policies shall name the Authority and the City as a "loss payee." The coverage afforded to the Authority Parties and City Parties shall be at least as broad as that afforded to Developer regarding the Property and the Project and may not contain any terms, conditions, exclusions, or limitations applicable to the Authority Parties and City Parties that do not apply to Developer.
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5.3.2. Primary Coverage. Any insurance or self-insurance maintained by the Authority Parties and City Parties shall be excess of all insurance required under this Agreement and shall not contribute with any insurance required under this Agreement (the endorsement form shall be at least as broad as ISO CG 20 01 04 13).
5.3.3. Contractual Liability. Liability Insurance policies shall contain contractual liability coverage, for the Developer's indemnity obligations under this Agreement.
Developer's obtaining or failure to obtain such contractual liability coverage shall not relieve the Developer from nor satisfy any indemnity obligation of the Developer under this Agreement.
5.3.4. Deliveries to the Authority. Evidence of Developer's maintenance of all insurance policies and endorsements required by this Agreement shall be delivered to the Authority (on behalf of Authority and City) prior to the Close of Escrow. Builder's Risk Insurance shall incept at the time of contractor mobilization for the Project. No later than three (3) days before any insurance required by this Agreement expires, is cancelled or its liability limits are reduced or exhausted, Developer shall deliver to the Authority (on behalf of Authority and City) evidence of Developer’s maintenance of all insurance this Agreement requires. Each insurance policy required by this Agreement shall be endorsed to state that coverage shall not be cancelled, suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar days' advance written notice of such action has been given to Authority (on behalf of Authority and City) by certified mail, return receipt requested; provided that if a thirty (30) days' notice of cancellation endorsement is not available Developer shall notify Authority (on behalf of Authority and City) of this unavailability in writing and shall forward any notice of cancellation to the Authority (on behalf of Authority and City) within two (2) business days from date of receipt by Developer; and further provided that only ten (10) days' advance written notice shall be required for any such action arising from non-payment of the premium for the insurance.
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, to the extent commercially available, in the cancellation wording of any certificates or policies of insurance applicable to the Authority Parties and City Parties pursuant to this Agreement.
5.3.5. Waiver of Certain Claims. Developer shall cause each insurance carrier providing any Liability Insurance, Builder's Risk Insurance, Worker's Compensation Insurance, Automobile Liability Insurance or Property Insurance coverage under this Agreement to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to the Authority Parties and City Parties, if not already in the policy. To the extent that the Developer obtains insurance with a Waiver of Subrogation, the Parties release each other, and their respective authorized representatives, from any Claims for damage to any Person or property to the extent such Claims are paid by such insurance policies obtained pursuant to and in satisfaction of the provisions of this Agreement.
5.3.6. No Representation. No Party makes any representation that the limits, scope, or forms of insurance coverage this Agreement requires are adequate or sufficient.
5.3.7. No Claims Made Coverage. None of the insurance coverage required under this Agreement may be written on a claims-made basis.
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5.3.8. Fully Paid and Non-Assessable. All insurance obtained and maintained by Developer in satisfaction of the requirements of this Agreement shall be fully paid for and non-assessable. However, Developer's policies may be subject to insurer audits.
5.3.9. Authority and City Option to Obtain Coverage. During the continuance of an Event of Default arising from the failure of Developer to carry any insurance required by this Agreement, the Authority and City each may, at its sole option, purchase any such required insurance coverage and the Authority and City, respectively, shall be entitled to immediate payment from the Developer of any premiums and associated reasonable costs paid by the Authority or City, respectively, for such insurance coverage. Any amount becoming due and payable to the Authority or City under this Section 5.3.9 that is not paid within fifteen (15) calendar days after written demand from the Authority or City for payment of such amount, with an explanation of the amounts demanded, will bear interest from the date of the demand at the rate of eight percent (8%) per annum or the Usury Limit, whichever is less. Any election by the Authority or City to purchase or not to purchase insurance otherwise required by the terms of this Agreement to be carried by Developer shall not relieve the Developer of its obligation to obtain and maintain any insurance coverage required by this Agreement.
5.3.10. Separation of Insured. All Liability Insurance and Automobile Liability Insurance shall provide for separation of insured for Developer and the Authority and City Parties. Insurance policies obtained in satisfaction of or in accordance with the requirements of this Agreement may provide a cross-suits exclusion for suits between named insured Persons, but shall not exclude suits between named insured Persons and additional insured Persons.
5.3.11. Deductibles and Self-Insured Retentions. Any deductibles or selfinsured retentions under insurance policies required by this Agreement shall be declared to and approved by Authority (on behalf of Authority and City). Developer shall pay all such deductibles or self-insured retentions regarding the Authority Parties and City Parties or, alternatively, the insurer under each such insurance policy shall eliminate such deductibles or self-insured retentions with respect to the Authority Parties and City Parties.
5.3.12. No Separate Insurance. Developer shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Agreement, unless Authority and City are each made an additional insured thereon, as required by this Agreement.
5.3.13. Insurance Independent of Indemnification. The insurance requirements of this Agreement are independent of the Parties' indemnification and other obligations under this Agreement and shall not be construed or interpreted in any way to satisfy, restrict, limit, or modify the Parties' indemnification or other obligations or to limit the Parties' liability under this Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall the provision of such insurance preclude the Authority or City from taking such other actions as are available to it under any other provision of this Agreement or otherwise at law or in equity.
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6. FINANCING
6.1. Project Financing.
Developer shall finance the development of the Project in accordance with the Project Budget. Further, Authority, City and Developer agree that the financing of the Project shall comply with all of the following:
6.1.1. Tax Credit Financing and Tax-Exempt Bonds. To provide funds for the Construction of the Project, Developer shall in good faith apply for and obtain a reservation of the Tax Credits and, if set forth in the latest approved Project Budget, an allocation of taxexempt bonds to finance a portion of the Total Project Costs. Developer shall use commercially reasonably efforts to submit an application for an allocation of tax-exempt bonds (if applicable) and a reservation of the Tax Credits no later than the deadline for the next round of applications following the issuance of land use entitlements for the Project and in all subsequent CDLAC (if applicable) and TCAC funding rounds for which the Developer determines it has a viable application through the end of calendar year 2025. If Developer does not receive the allocation of tax-exempt bonds (if applicable) and a reservation of Tax Credits as a result of such applications by the time of the award of a Tax Credits for the final applicable Tax Credit reservation round in 2025, the Executive Director may authorize the Developer to submit applications through the final applicable Tax Credit reservation round in 2026 provided that Developer previously submitted applications for Tax Credits for the Project and provided that the Executive Director may condition his approval on Developer covenanting that it shall not knowingly submit an application for Tax Credits in 2026 for any other development project in the Inland Empire CDLAC/TCAC geographic region in any round of a CDLAC/TCAC application cycle that Developer applies for the Tax Credits for the Project. If Developer does not receive a reservation of Tax Credits as a result of such applications by the time of the award of a Tax Credits for the final applicable Tax Credit reservation round in 2026, the Parties agree to meet and confer in good faith for a period of ninety (90) days to determine if a feasible and mutually acceptable alternate arrangement can be made to finance Construction of the Project. If no agreement is reached by the Parties within such ninety (90) day period regarding the alternative courses of action described in the preceding sentence, this Agreement may be terminated upon fifteen (15) days' Notice to the other Parties. Any agreement that is reached between the Parties on an alternative financing plan for the Project shall be memorialized in an implementation agreement to this Agreement. If Developer fails to make the required application to CDLAC (if applicable) and TCAC, then Authority or Developer may terminate this Agreement upon fifteen (15) days' Notice to the other Parties. Failure of Developer to obtain tax-exempt bond allocation (if applicable) or Tax Credits shall not constitute a Default under the terms of this Agreement, unless due to the intentional misconduct of Developer.
6.1.2. Permanent Loan. Prior to the Close of Escrow, Developer shall obtain for Authority's review and approval (on behalf of Authority and City), which may be withheld or conditioned in Authority's reasonable discretion and which shall not be unreasonably delayed, a conditional forward loan commitment for the Permanent Loan.
6.1.3. Use of HOME-ARP Funds. Developer shall only use the HOME-ARP funds for eligible activities as defined in the HOME-ARP Notice. No portion of the HOMEDocusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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ARP funds shall be used to fund costs incurred more than twenty-four (24) months prior to the Effective Date or for any costs not allowed under the HOME-ARP Regulations.
6.2. Project Budget.
By its execution of this Agreement, Authority (on behalf of Authority and City) has given its approval to the Project Budget. While the Project Budget has been prepared based on the best, good faith estimate of Developer of the costs which are likely to be incurred for the Project, the Parties recognize that events and circumstances not currently contemplated, some of which are outside of the control of the Parties, could result in changes in the costs of Construction, necessitating changes in the Project Budget. To the extent that Developer is required to make changes to the Project Budget, Developer shall immediately submit a revised Project Budget to the Authority Executive Director for review and approval (on behalf of Authority and City), which review and approval shall not be unreasonably withheld, conditioned or delayed, as to the sufficiency of the financing secured by Developer to meet the revised Total Project Costs.
6.3. Only Permitted Encumbrances.
Developer shall not record and shall not allow to be recorded against the Property any Security Instrument, lien or other encumbrance that is not a Permitted Encumbrance. Developer shall remove or cause to be removed (or providing title insurance in form and substance reasonably acceptable to Authority (on behalf of Authority and City) and issued by a title insurance company reasonably acceptable to Authority (on behalf of Authority and City), insuring the priority of this Agreement, the Regulatory Agreement, and the Deed of Trust securing the Land Loan, the Fee Deferral Loan, the HOME-ARP Loan, and Project Loan, or any separate deeds of trust required pursuant to Section 3.4.14 of this Agreement, as superior to such lien, with such title insurance being in the minimum amount of the outstanding principal and interest under the Land Loan, HOME-ARP Loan, Project Loan and the Fee Deferral Loan plus 125% of the amount of the lien claim or providing a statutory bond resulting in removal of such lien) any Prohibited Encumbrance made or recorded against the Property or shall assure the complete satisfaction of any such Prohibited Encumbrance to the satisfaction of the Authority (on behalf of Authority and City), in the Authority's sole and absolute discretion. The covenants of Developer set forth in this Section regarding the placement of encumbrances on the Property shall run with the land of the Property and bind successive owners of the Property, until recordation (or deemed issuance) of the Certificate of Completion for the Project.
6.4. Authority Right to Discharge Prohibited Encumbrances.
After sixty (60) calendar days' Notice to Developer of a Prohibited Encumbrance and provided that Developer has not caused such Encumbrance to be removed pursuant to Section
6.3, the Authority (on behalf of Authority and City) shall have the right, but not the obligation, to satisfy or remove any Prohibited Encumbrance against the Property or the Project and receive reimbursement from Developer for any amounts paid or incurred in satisfying or removing any such Prohibited Encumbrance, upon demand. Any amount expended by the Authority to discharge a Prohibited Encumbrance that is not reimbursed to the Authority by Developer within thirty (30) calendar days following written demand for payment from the Authority shall accrue Default Interest, until paid in full. Nothing in this Section 6.4, though, shall require Developer to Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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pay or make provisions for the payment of any tax, assessment, lien or charge that Developer is in the process of contesting the validity or amount thereof, in good faith, and so long as such contest shall not subject all or any portion of the Property to forfeiture or sale.
6.5. Rights of Lender, Authority and City Regarding Permitted Security Instruments.
6.5.1. Notice of Liens. The Developer shall promptly Notify the Authority (on behalf of Authority and City) of any Security Instrument or lien asserted against or attached to all or any portion of the Project or the Property, prior to the date of issuance of a Certificate of Completion for the Project, whether by voluntary act of Developer or otherwise; provided, however, that no Notice of filing of preliminary notices or mechanic's liens need be given by Developer to the Authority, prior to suit being filed to foreclose any such mechanic's lien.
6.5.2. Notice of Default to Lenders. Whenever the Authority or City delivers any Notice of Default to Developer under this Agreement, the Authority or City, as applicable, shall send a copy of such Notice of Default to each Lender holding a Permitted Security Instrument of which the Authority and City have received Notice and a contact address for transmittal of such Notices. Each Lender receiving a copy of any such Notice of Default shall have the right, at its option, to commence the cure or remedy of any Default of Developer set forth in such Notice and to diligently and continuously proceed with such cure or remedy of such Default, within the cure period allowed to Developer under this Agreement. The Authority and City shall accept such performance by a Lender with the same force and effect as if furnished by Developer. If such Default can only be remedied or cured by the Lender upon obtaining possession of the Property, the Authority and City shall allow the Lender an opportunity to obtain possession with diligence and continuity through exercise of remedies under such Lender's Permitted Security Instrument and to remedy or cure such Default within ninety (90) days after obtaining possession of the Property. If the Default reasonably requires more than ninety (90) days to cure, however, then the time available to a Lender to cure pursuant to this Section 6.5 shall be the reasonable time required to complete such cure, as long as the Lender has commenced the cure of the Default within such ninety (90) day period and diligently pursues the cure to completion. During such extension of time, the Authority and City shall not terminate this Agreement or exercise other remedies under this Agreement by reason of such Default. All Developer Specific Defaults shall be deemed cured upon transfer of Developer's interest in the entire Property to the Lender, its assignee or nominee, pursuant to exercise of remedies under a Permitted Security Instrument. In addition, any Lender properly completing the Project with the consent of Authority (on behalf of Authority and City) shall be entitled, upon written request made to Authority, to a Certificate of Completion from Authority. Nothing contained in this Agreement shall be deemed to permit, authorize or require any Lender to undertake or continue the Construction or installation of any portion of the Project (beyond the extent necessary to conserve or protect improvements or Construction already made) prior to or after acquiring title to or possession of the entire Property, without expressly assuming Developer's obligations under this Agreement by written agreement reasonably satisfactory to the Authority (on behalf of Authority and City), in which the Lender agrees to complete the Project in the manner provided in this Agreement. Any Lender desiring to complete the Project must provide the Authority with evidence reasonably satisfactory to the Authority (on behalf of Authority and City) that the Lender has the qualifications (or will engage one or more licensed Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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contractor(s) or consultant(s) with such qualifications) and financial capability necessary to perform such obligations.
6.5.3. No Termination of Permitted Security Instruments by Default. An Event of Default by Developer under this Agreement shall not defeat or render invalid the lien of any Permitted Security Instrument made in good faith and for value as to all or any part of the Property, whether or not the Lender is subordinated to this Agreement; but unless otherwise provided in this Agreement, this Agreement shall be binding and effective against any owner of the Property, whose title thereto is acquired pursuant to exercise of remedies under a Permitted Security Instrument or from a Person exercising any such remedies.
6.5.4. Lender Rights on Termination or Modification. No termination of this Agreement shall be binding upon a Lender unless the termination occurs after Notice to such Lender and such Lender's failure to cure all then existing Defaults under this Agreement (except any Developer Specific Defaults), pursuant to this Section 6.5, or with such Lender's prior written consent. No modification of this Agreement that materially affects the rights of a Lender shall be binding upon the Lender without its prior written consent.
6.5.5. No Construction Obligation of Lender. A Lender shall in no way be obligated by the provisions of this Agreement to construct or complete the development of the Project or to guarantee such construction or completion, but may do so pursuant to and in accordance with this Section 6.5. Nothing in this Agreement shall be deemed to construe, permit, or authorize any Lender to devote all or any portion of the Property to any uses, or to construct any improvements thereon, other than those uses or the Project provided for or authorized by this Agreement.
6.5.6. Authority and City Right to Cure Obligations. In the event of a Default by Developer under any Permitted Security Instrument, prior to the date of issuance of a Certificate of Completion for the Project, where the Lender has not exercised its option to complete the Project under Section 6.5.2, the Authority and City each may cure the Default of Developer under the applicable Permitted Security Instrument, but is under no obligation to do so, prior to completion of any sale or foreclosure of all or any portion of the Property under the applicable Permitted Security Instrument. The Authority or City, as applicable, shall be entitled to reimbursement from Developer of all costs and reasonable expenses incurred by the Authority or City, respectively, in curing any Default of Developer under any Permitted Security Instrument, under demand. Any amount expended by the Authority or City to cure a Default of Developer under any Permitted Security Instrument that is not reimbursed to the Authority or City, as applicable, by Developer within thirty (30) calendar days after Notice of such amount to Developer, shall accrue Default Interest, until paid in full.
6.5.7. Foreclosure of Permitted Security Instrument. Foreclosure of any Permitted Security Instrument, whether by judicial proceedings or by power of sale, or any conveyance by deed in lieu of foreclosure, shall not require the consent of the Authority or constitute a Default under this Agreement.
6.6 Annual Payment on Land Note, Project Note and Fee Deferral Note. Following completion of the Project as evidenced by the issuance by the City of a Certificate of Occupancy Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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and continuing each year thereafter until the applicable maturity date established in the Land Note, the Project Note and the Fee Deferral Note, a portion of the Residual Receipts from the Project shall be paid to the Authority and/or the City, as applicable, and applied to pay down the amounts due and owing under the Land Note, the Project Note and the Fee Deferral Note, as applicable. The payments described in each of the Land Note, the Project Note and the Fee Deferral Note shall be paid to Holder no later than April 1 each year, with the first payment due on the April 1 following the issuance of a Certificate of Occupancy for the Project and continuing each year thereafter. Each annual payment shall be accompanied by the Developer's report of Residual Receipts, an audited financial statement as required under each applicable note, and any other documentation reasonably requested by the Authority and/or the City to substantiate the Developer's determination of Residual Receipts.
6.6.1 Annual Budget. Developer shall prepare and submit to the Authority an Annual Budget no later than 60 days preceding the effective year of such budget. The Annual Budget shall include the projected Gross Revenue and Operating Expenses for the year and a line item showing the projected Residual Receipts from the Project for the year. The Authority will review the Annual Budget and, if acceptable, approve it, which approval shall not be unreasonably withheld, conditioned or delayed. If the Annual Budget is not acceptable, the Authority shall specify the reasons for disapproval. The intent of this section is to provide the Authority an opportunity to disapprove any unreasonable expenses which would diminish the Residual Receipts from the Project. Once approved, any changes to the Annual Budget which exceed ten percent (10%) of the total Annual Budget shall require the Authority’s and/or the City’s, as applicable, prior written consent, which consent shall not be unreasonably withheld.
6.7 Developer Fee. Developer covenants and agrees that the maximum Developer Fee that may be paid from Project sources and/or cash flow is Two Million Five Hundred Thousand Dollars ($2,500,000). A larger Developer Fee may be included in the Project’s eligible basis for tax credit purposes, but, except as otherwise provided in Section 6.8, any fee in excess of $2,500,000 must be contributed as equity to the Project or paid out of the Developer’s share of Residual Receipts. Developer shall not receive payments of Developer Fee in excess of the amounts or ahead of a written schedule to be approved by the Authority prior to Close of Escrow.
6.8 Cost Savings.
6.8.1 Cost Savings Obligation. Subject to compliance with the Tax Credit Rules and the approval of TCAC, and further subject to any requirements of the HOME-ARP Regulations, Developer hereby agrees to provide and pay to the Authority the payment described in this Section 6.8 in connection with Cost Savings (as defined in Section 6.8.2 below), if any, from the Project in an amount to be determined based on the Audit (as defined in Section 6.8.3 below) to be conducted upon completion of construction for the Project. Payment of the Authority Share of Cost Savings (as defined in Section 6.8.2 below) shall be made at the time set forth in Section 6.8.5 below. The amount paid for the Authority Share of Cost Savings shall be credited against the amount then outstanding on the Project Note.
6.8.2 Authority Share of Cost Savings. The actual amount of Cost Savings (as defined below) to be paid to the Authority and retained by the Developer shall be determined Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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after the Audit (as defined in Section 6.8.3 below), and the amount of such Cost Savings shall be equal to the amount by which the total sources of permanent financing for the Project exceed the actual costs incurred to develop the Project including, without limitation, payment of the Developer Fee (resulting amount constituting “Cost Savings”). From the total amount of Cost Savings, the Developer shall retain fifty percent (50%) to be applied to payment of Developer Fee notwithstanding the limits in Section 6.7 if then outstanding, and pay to the Authority fifty percent (50%) (“Authority Share of Cost Savings”). If any of the other soft lenders request a share of Cost Savings, the Authority shall split the Authority Share of the Cost Savings (50%) on a pro rata basis with the other soft lender(s) that are requesting a share of Cost Savings. The pro rata distribution shall be based on the initial principal balances of each respective soft loan of the soft lender(s) that are requesting a share of Cost Savings. If none of the other soft lenders request a share of the Cost Savings, the Authority shall receive the full 50% of the Cost Savings.
6.8.3 Audit to Determine Cost Savings. Within one hundred and eighty (180) days following the issuance of Form 8609 by TCAC, Developer shall cause its certified public accountant(s) to perform a final audit of the Total Project Costs in accordance with the requirements of the Tax Credits and generally accepted auditing standards (GAAP) (“Audit”). If the Audit determines that the total sources of permanent financing for the Project (including long-term permanent debt and tax credit equity) exceed the total actual and documented cost to develop the Project, such excess shall be considered the “Cost Savings” for the Project.
6.8.4 Allocation of Cost Savings Amount. Once determined by the Audit pursuant to Section 6.8.3 above, the full amount of Cost Savings shall be allocated and remitted in the following order: (a) first, Developer shall retain fifty (50%) of Cost Savings to be applied to payment of Developer Fee notwithstanding the limits in Section 6.7 if then outstanding, and (b) second, Developer shall pay to the Authority the Authority Share of Cost Savings which shall be utilized as principal payment due on the Project Note.
6.8.5 Timing of Allocation and Payment of Cost Savings. In the event of any Cost Savings, the payment of the Authority Share of Cost Savings shall become due and payable no later than sixty (60) days after Developer receives its final Tax Credit equity payment for the Project, and each of such payments shall be allocated and remitted in a lump sum, and as applicable credited toward the amount outstanding under the Project Note.
7. REMEDIES AND INDEMNITY
7.1. Remedies.
7.1.1. Developer Remedies. During the continuance of an Event of Default by Authority or City under this Agreement, Developer shall be limited to either of the following remedies: (1) an action against Authority or City for specific performance of this Agreement; or (2) termination of this Agreement; provided however if the Event of Default is the Authority's or the City's failure to fund the Fee Deferral Loan, the Land Loan, the HOME-ARP Loan or the Project Loan when all conditions to funding such loan as set forth in this Agreement have been met, the Developer shall be entitled to recover its reasonable documented direct costs incurred for the Project prior to the date the Event of Default occurs up to a maximum amount of Three Hundred Fifty Thousand Dollars ($350,000) from whichever of the Authority or the City are in Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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default. Under no circumstances shall Authority or City be liable to Developer under this Agreement for any speculative, consequential, collateral, special, punitive or indirect damages or for any loss of profits suffered or claimed to have been suffered by Developer.
7.1.2. Authority and City Remedies. The occurrence of an Event of Default by Developer under this Agreement shall give the City and/or the Authority the right to proceed with any and all remedies set forth in this Agreement, include an action for damages, an action or proceeding at law or in equity to require the Developer to perform its obligations and covenants under this Agreement and any documents executed pursuant hereto or to enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement or any documents executed pursuant hereto, and the right to terminate this Agreement. In addition, the occurrence of an Event of Default by Developer will relieve the City and the Authority of any obligation to further perform hereunder.
7.1.3. Waiver of Rights. Authority, City and Developer each acknowledge and agree that neither Authority nor City would have entered into this Agreement, if it were to be liable to Developer for any monetary damages, monetary recovery or any remedy during the continuance of an Event of Default under this Agreement by Authority or City. Accordingly, Authority, City and Developer agree that the remedies specifically provided for in Section 7.1.1 are reasonable under the circumstances and shall be Developer's sole and exclusive rights and remedies during the continuance of an Event of Default under this Agreement by Authority or City. Developer waives any right to pursue any remedy or damages other than those specifically provided in Section 7.1.1.
7.1.4. Civil Code Section 1542 Waiver. Developer acknowledges the protections of Civil Code Section 1542 relative to the waivers and releases contained in this Section 7.1, which Civil Code Section reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.
7.1.5. Acknowledgment. By initialing below, Developer knowingly and voluntarily waives the provisions of Section 1542 and all other statutes and judicial decisions (whether state or federal) of similar effect solely in connection with the waivers and releases contained in this Section 7.1.
_________________
Initials of Authorized
Developer Representative
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7.1.6. Statement of Intent. California Civil Code Section 1542 notwithstanding, it is the intention of Developer to be bound by the limitation on damages and remedies set forth in this Section 7.1, and Developer hereby releases any and all claims against Authority or City for monetary damages, monetary recovery or other legal or equitable relief related to any event of default under this Agreement prior to the Close of Escrow, except as specifically provided in this Section 7.1, whether or not any such released claims were known or unknown to Developer as of the Effective Date of this Agreement.
7.2. Legal Actions.
Either Party may institute legal action, at law or in equity, to enforce or interpret the rights or obligations of the Parties under this Agreement or recover damages, subject to the provisions of Section 7.1.
7.3. Rights and Remedies are Cumulative.
Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this Agreement 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 the same rights or remedies for any other Default by the other Party.
7.4. Indemnification.
7.4.1. Authority Indemnity Obligations. Authority shall Indemnify the Developer Parties against any Claim to the extent such Claim arises from any wrongful intentional act or negligence of the Authority Parties, but only to the extent that Authority may be held liable under applicable law for such wrongful intentional act or negligence and exclusive of any violation of law (including the State Constitution) relating to Authority’s performance of this Agreement. Nothing in this Agreement is intended nor shall be interpreted to waive any limitation on Authority’s liability, any exemption from liability in favor of Authority, any claim presentment requirement for bringing an action regarding any liability of Authority or any limitations period applicable to liability of Authority, as set forth in Government Code Sections 800, et seq., Sections 900, et seq., or in any other law or require Authority to Indemnify any Person beyond such limitations on Authority’s liability.
7.4.2. Developer Indemnity Obligations. Developer shall Indemnify the Authority Parties and City Parties against any Claim to the extent such Claim arises from any wrongful intentional act or negligence of the Developer Parties. Developer shall also Indemnify the Authority Parties and City Parties against any and all of the following: (a) any Application made by or at Developer’s request; (b) any agreements that Developer (or anyone claiming by or through Developer) makes with a Third Person regarding the Property or the Project; (c) any workers compensation claim or determination relating to any employee of the Developer Parties or their contractors; (d) any Prevailing Wage Action relating to this Agreement or the Project; and (e) any Environmental Claim attributable to any action or failure to act by the Developer Parties.
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7.4.3. Independent of Insurance Obligations. Developer's indemnification obligations under this Agreement shall not be construed or interpreted as in any way restricting, limiting, or modifying Developer's insurance or other obligations under this Agreement.
Developer's obligation to Indemnify Authority Parties and City Parties under this Agreement is independent of Developer's insurance and other obligations under this Agreement. Developer's compliance with its insurance obligations and other obligations under this Agreement shall not in any way restrict, limit, or modify Developer's indemnification obligations under this Agreement and are independent of Developer's indemnification and other obligations under this Agreement.
7.4.4. Survival of Indemnification and Defense Obligations. The indemnity and defense obligations of the Parties under this Agreement shall survive the expiration or earlier termination of this Agreement, until any and all actual or prospective Claims regarding any matter subject to an indemnity obligation under this Agreement are fully, finally, absolutely and completely barred by applicable statutes of limitations.
7.5. Indemnification Procedures.
Wherever this Agreement requires any Indemnitor to Indemnify any Indemnitee:
7.5.1. Prompt Notice. The Indemnitee shall promptly notify the Indemnitor of any Claim.
7.5.2. Selection of Counsel. The Indemnitor shall select counsel reasonably acceptable to the Indemnitee. Counsel to Indemnitor's insurance carrier that is providing coverage for a Claim shall be deemed reasonably satisfactory, except in the event of a potential or actual conflict of interest for such counsel regarding such representation or such counsel proves to be incompetent regarding such representation. Even though the Indemnitor shall defend the Claim, Indemnitee may, at its option and its own expense, engage separate counsel to advise it regarding the Claim and its defense. The Indemnitee's separate counsel may attend all proceedings and meetings. The Indemnitor's counsel shall actively consult with the Indemnitee's separate counsel. The Indemnitor and its counsel shall, however, control the defense, except to the extent that the Indemnitee waives its rights to indemnity and defense for such Claim.
7.5.3. Cooperation. The Indemnitee shall reasonably cooperate with the Indemnitor's defense of the Indemnitee.
7.5.4. Settlement. The Indemnitor may only settle a Claim without the consent of Indemnitee, if the Claim is within the policy limits of applicable insurance policies provided in satisfaction of the requirements of this Agreement and such settlement procures a release of Indemnitee from the subject Claims, does not require Indemnitee to make any payment to the claimant and neither Indemnitee nor Indemnitor on behalf of Indemnitee admits any liability.
Notwithstanding the immediately preceding sentence or any other provision of this Agreement, the Indemnitee's consent shall be required to settle any and all Claims under Builder's Risk Insurance.
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8. GENERAL PROVISIONS
8.1. Notices, Demands and Communications Between the Parties.
8.1.1. Notices. Any and all Notices submitted by any Party to another Party pursuant to or as required by this Agreement shall be dispatched by messenger for immediate personal delivery, overnight delivery service that provides a receipt of delivery, by registered or certified United States mail, postage prepaid, return receipt requested, to the address of the Party, as set forth in Section 8.1.2, or by email at the email address of the Party set forth in Section
8.1.2. Such Notice may be sent in the same manner to such other addresses as any Party may from time to time designate by Notice. Notices shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, the date on the delivery receipt if sent by overnight delivery service, or two (2) calendar days after it is placed in the United States mail, as provided in this Section 8.1. Notices transmitted by electronic mail transmission shall be deemed delivered upon being sent, but only if no message of unavailability or undeliverability is received by the sending Party. Rejection, other refusal to accept or the inability to deliver any Notice because of a changed address of which no Notice was given or other action by a Person to whom Notice is sent, shall be deemed receipt of the Notice.
8.1.2. Addresses. The following are the authorized addresses for the submission of Notices to the Parties, as of the Effective Date:
To Developer: Second Street Family LP
c/o OHDC Second Street Family LLC
414 E. Chapman Avenue
Orange, CA 92866
Attn: Chief Executive Officer
Email: [email protected]
With a courtesy copy to: C&C Second Street Family LLC
14211 Yorba Street, Suite 200
Tustin, CA 92780
Attn: Todd Cottle
Email: [email protected]
and to: Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, CA 94612
Attn: Lynn Hutchins
Email: [email protected]
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To Authority and City: City of Corona Housing Authority 400 S. Vicentia Avenue
Corona, CA 92882
Attn: Authority Executive Director
Email: [email protected]
With a courtesy copy to: City of Corona Housing Authority 400 S. Vicentia Avenue
Corona, CA 92882
Attn: Authority General Counsel
Email: [email protected]
8.2. Conflict of Interest.
No member, official or employee of the Authority or City having any conflict of interest, direct or indirect, related to this Agreement, the Property, or the development or operation of the Project shall participate in any decision relating to this Agreement. The Parties represent and warrant that they do not have knowledge of any such conflict of interest.
8.3. No Third-Party Beneficiaries.
Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any Person other than the Parties and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any Third Person to any Party or give any Third Person any right of subrogation or action over or against any Party.
8.4. Warranty Against Payment of Consideration for Agreement.
Developer warrants that it has not paid or given, and will not pay or give, any Third Person any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section 8.4, shall not include Persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by Developer, respectively.
8.5. Enforced Delay: Extension of Time of Performance.
In addition to specific provisions of this Agreement, performance by any Party hereunder shall not be deemed to be in Default, or considered to be a Default, where delays or Defaults are due to the force majeure events of war, acts of terrorism, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the Party claiming an extension of time to prepare or acts or failure to act of any Government ("Enforced Delay"). An extension of time Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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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 which claims the existence of the delay has first provided the other Parties with written notice of the occurrence of the delay within ten (10) calendar days of the commencement of such occurrence of delay. The inability of Developer to satisfy any condition of this Agreement relating to the Construction of the Project shall not be deemed to be a force majeure event or otherwise provide grounds for the assertion of the existence of a delay under this Section 8.5.
The Parties to this Agreement expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any Party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each Party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such Party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such Party of its obligations under this Agreement.
8.6. Inspection of Books and Records.
Authority and City each shall have the right at all reasonable times, at its cost and expense, to inspect the books and records of Developer pertaining to the construction of the Project or the Property as necessary for the Authority or City, in its reasonable discretion, to enforce its rights under this Agreement. Matters discovered by Authority or City shall not be disclosed to third parties, unless required by law or unless otherwise resulting from or related to the pursuit of any remedies or the assertion of any rights of Authority or City hereunder.
8.7. Approvals.
Except as otherwise provided in this Agreement, approvals required of Authority, City or Developer, or any officers, agents or employees of Authority, City or Developer, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in this Agreement or, if no time is given, within a reasonable time.
8.8. Effect.
This Agreement shall be binding upon and inure to the benefit of the Parties to this Agreement and their respective heirs, executors, administrators, legal representatives, successors and assigns.
8.9. Further Assurances.
The Parties agree to reasonably consider such additional actions or the execution of such other documents as may be reasonably necessary or convenient to the financing, development, and operation of the Project, although nothing in this Section 8.9 shall be deemed a Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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representation, guaranty or commitment by any Party to take any action or execute any document.
8.10. City Delegation to Authority.
Except as otherwise specifically provided in this Agreement and except for actions that may increase costs to the City, for ease of administration of this Agreement, the City delegates to the Authority the authority to administer this Agreement on behalf of the City and authorizes the Authority Executive Director to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments to this Agreement and changes to the attached exhibits prior to their execution and execute documents on behalf of the City, including any documents necessary to implement any changes in the number or affordability of Qualifying Units (as defined in the Regulatory Agreement), as may be required by TCAC. To the extent the authority to administer this Agreement is not delegated by the City to the Authority, the City Manager shall have the authority to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments to this Agreement and changes to the attached exhibits prior to their execution and execute documents on behalf of the City, including any documents necessary to implement any changes in the number or affordability of Qualifying Units (as defined in the Regulatory Agreement), as may be required by TCAC, so long as such actions do not reduce the length of affordability of the Qualifying Units (as defined in the Regulatory Agreement) or add to the costs incurred or to be incurred by City as specified herein. The City Manager reserves the right, in its sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the City Council if the City Manager determines or believes that such action could increase the risk, liability or costs to City, or change the affordability covenants or reduce the length of affordability of the Project.
8.11. Authority Approvals and Actions.
The Authority Executive Director shall have the authority, on behalf of the Authority and the City (to the extent not provided otherwise in this Agreement), to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments to this Agreement and changes to the attached exhibits prior to their execution and execute documents, including, without limitation, the Notice of Completion and any documents necessary to implement any changes in the number or affordability of the Qualifying Units (as defined in the Regulatory Agreement), as may be required by TCAC, so long as such actions do not reduce the length of affordability of the Qualifying Units (as defined in the Regulatory Agreement) or add to the costs incurred or to be incurred by Authority or City as specified herein. The Authority Executive Director reserves the right, in its sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the Authority Board if the Authority Executive Director determines or believes that such action could increase the risk, liability or costs to Authority, or reduce the length of affordability of the Project.
8.12. Investor Limited Partner Provisions.
If and when the Developer is in the form of a limited partnership and admits an investor limited partner into Developer's partnership, the Authority and City each agrees to the following provisions for the benefit of the Developer's investor limited partner:
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8.12.1. The Authority and City each will give the limited partner a copy of any Notice (at the limited partner's address provided in a Notice by Developer to the Authority and City) that the Authority or City gives to the Developer under this Agreement, the Regulatory Agreement and the other Land Loan, HOME-ARP Loan, Project Loan and Fee Deferral Loan documents, provided that Developer has provided the address and contact information for the investor limited partner in writing to the Authority and City;
8.12.2. The Authority and City each will give the limited partner thirty (30) days after the limited partner's receipt of such Notice to cure a non-payment of any sum due under the Land Loan, HOME-ARP Loan, Project Loan and Fee Deferral Loan documents;
8.12.3. The Authority and City each will give the limited partner sixty (60) days after the limited partner's receipt of such Notice to cure any other default under this Agreement, the Regulatory Agreement and other Land Loan, HOME-ARP Loan, Project Loan and Fee Deferral Loan documents;
8.12.4. If a non-monetary default is incapable of being cured within sixty (60) days, the Authority and City each will give the limited partner an additional ninety (90) days to cure such default provided the limited partner has commenced to cure such default and is diligently proceeding to cure such default through the end of such period;
8.12.5. If the limited partner makes any such payment or otherwise cures such default, the Authority and City each will accept such action as curing such default as if such payment or cure were made by the Developer;
8.12.6. The Authority and City each will permit the limited partner to transfer the limited partner's interest to any person or entity at any time provided that, if at the time of such transfer the limited partner has not made one hundred percent (100%) of the capital contributions the limited partner is required to make to the Partnership, the limited partner shall remain liable to the Developer for such capital contributions;
8.12.7. The Authority and City each will permit the limited partner to remove the general partner of the partnership in accordance with the partnership agreement, provided that the substitute general partner is reasonably acceptable to Authority; and
8.12.8. The Authority and City each will permit insurance and condemnation proceeds to be used to rebuild the Project provided that (i) sufficient funds are provided from other sources to effectively rebuild the Project to a lawful affordable housing multi-family complex, and (ii) subject to the rights of any Senior Lenders, Authority (on behalf of Authority and City) shall hold all such proceeds and disburse them based on the progress of construction, subject to such additional reasonable conditions as Authority (on behalf of Authority and City) may impose.
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9. ENTIRE AGREEMENT, EXHIBITS, WAIVERS AND AMENDMENT
9.1. Entire Agreement.
This Agreement integrates all of the terms and conditions mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or previous agreements between the Parties with respect to all or any portion of the Property and the development thereof.
9.2. Exhibit List.
The following is a list of the Exhibits attached to this Agreement. Each of the exhibits referenced in this Section 9.2 is incorporated by this reference into the text of this Agreement.
Exhibit A Authority Property Legal Description
Exhibit B Site Plan
Exhibit C Escrow Agent Consent
Exhibit D Form of Deed
Exhibit E Regulatory Agreement
Exhibit F Land Note
Exhibit G Deed of Trust
Exhibit H Project Scope of Development
Exhibit I Notice of Agreement
Exhibit J Certificate of Completion
Exhibit K Developer Official Action
Exhibit L Project Note
Exhibit M Fee Deferral Note
Exhibit N Schedule of Performance
Exhibit O Federal Requirements
Exhibit P Project Budget (ProForma and Uses and Schedule of Uses) Exhibit Q HOME-ARP Note
9.3. Waivers and Amendments.
All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the appropriate authorities of each Party to this Agreement.
9.4. Execution of Agreement.
This Agreement may be executed in multiple counterpart originals each of which is deemed to be an original. This Agreement constitutes the entire understanding and agreement of the Parties regarding the acquisition, Construction and operation of the Project on the Property.
SIGNATURES ON FOLLOWING TWO PAGES
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CITY AND AUTHORITY SIGNATURE PAGE
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
Authority and City have signed this Affordable Housing Disposition and Development Agreement (Corona Second Street Family Apartments) by and through the signatures of their authorized representative(s) set forth below:
AUTHORITY:
CITY OF CORONA HOUSING AUTHORITY,
a public body, corporate and politic, organized under the laws of the State of California, By: Date:
Jacob Ellis
Executive Director
ATTEST:
Authority Secretary
CITY:
CITY OF CORONA,
a California municipal corporation
By: Date:
Jacob Ellis
City Manager
ATTEST:
City Clerk
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8/22/2024
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DEVELOPER SIGNATURE PAGE
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
Developer has signed this Affordable Housing Disposition and Development Agreement (Corona Second Street Family Apartments) by and through the signatures of their authorized representative(s) set forth below:
DEVELOPER:
SECOND STREET FAMILY LP,
a California limited partnership
By: OHDC Second Street Family LLC,
a California limited liability company,
its managing general partner
By: Orange Housing Development Corporation,
a California nonprofit public benefit corporation,
its sole member and manager
By: ____________________________________
Eunice Bobert, Chief Executive Officer
By: C&C Second Street Family LLC,
a California limited liability company,
its developer general partner
By: C & C Development Co., LLC,
a California limited liability company,
its sole member and manager
By: _____________________________________
Todd R. Cottle, Trustee of the
2007 Todd R. Cottle and
Jennifer N. Cottle Revocable
Trust, its member
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Exhibit “A”
Authority Property Legal Description
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EXHIBIT "A"
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
AUTHORITY PROPERTY LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL 1: (APN: 118-270-053 AND APN: 118-270-055) (CALTRANS PARCEL NOS. 22219, 22221, & 22222- REM)
THAT PORTION OF LOT 5, IN BLOCK 66 OF LANDS OF THE SOUTH RIVERSIDE LAND AND WATER
COMPANY, IN THE CITY OF CORONA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 9, PAGE 6 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. BEING A PORTION OF THE LAND DESCRIBED IN THE DEEDS RECORDED MAY 31, 2013 AS INSTRUMENT NO. 2013-0257879, JULY 23, 2013 AS INSTRUMENT NO. 2013-0354239 AND AUGUST 29, 2013 AS INSTRUMENT NO. 2013-0426213, ALL OF OFFICIAL RECORDS OF SAID COUNTY, LYING SOUTHERLY OF THE FOLLOWING DESCRIBED LINE:
BEGINNING AT CENTERLINE INTERSECTION OF BUENA VISTA AVENUE, 60.00 FEET WIDE, AND 6TH STREET, AS SHOWN ON A MAP FILED IN BOOK 143, PAGES 94 THROUGH 113, INCLUSIVE OF RECORDS OF SURVEY, RECORDS OF SAID COUNTY; THENCE ALONG SAID CENTERLINE OF BUENA VISTA AVENUE NORTH 08°02'08" EAST 1479.18 FEET; THENCE NORTH 81°57'52" WEST
30.00 FEET TO THE WESTERLY LINE OF SAID BUENA VISTA AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 38°05'40" WEST 22.46 FEET TO A NON-TANGENT CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 9968.00 FEET, A RADIAL LINE TO SAID CURVE BEARS NORTH 05°40'54" EAST; THENCE WESTERLY 28.63 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 00°09'52"; THENCE NORTH 84°28'59" WEST 172.40 FEET TO A CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 968.00 FEET; THENCE WESTERLY 365.82 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 21°39'11" TO A COMPOUND CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 50.00 FEET; THENCE SOUTHWESTERLY 2.96 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 03°23'25"; THENCE SOUTH 70°28'25" WEST 260.64 FEET; THENCE SOUTH 72°26'28" WEST 262.95 FEET; THENCE SOUTH 73°45'06" WEST 161.04 FEET TO A NON-TANGENT CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 903.00 FEET, A RADIAL LINE TO SAID CURVE BEARS SOUTH 16°14'56" EAST; THENCE WESTERLY 382.42 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 24°15'53" TO A NONTANGENT CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 1403.00 FEET, A RADIAL LINE TO SAID CURVE BEARS SOUTH 08°02'24" WEST; THENCE WESTERLY 32.47 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 01°19'34"; THENCE SOUTH 54°27'43" WEST 54.64 FEET; THENCE SOUTH 09°15'36" WEST 95.59 FEET; THENCE SOUTH 08°05'21" WEST 34.85 FEET; THENCE SOUTH 09°23'23" WEST 155.22 FEET TO A NON-TANGENT CURVE CONCAVE WESTERLY HAVING A RADIUS OF 95.00 FEET, A RADIAL LINE TO SAID CURVE BEARS SOUTH 79°06'07" EAST; THENCE SOUTHWESTERLY 9.83 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
A-2
Exhibit “A”
Authority Property Legal Description
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OF 05°55'39" FEET TO THE EASTERLY LINE OF LINCOLN AVENUE, 88.50 FEET WIDE AS SHOWN ON SAID MAP.
PARCEL 2: (APN: 118-302-030) (CALTRANS PARCEL NO. 22223-REM) THAT PORTION OF LOT 10, IN BLOCK 64 OF LANDS OF THE SOUTH RIVERSIDE LAND AND
WATER COMPANY, IN THE CITY OF CORONA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 9, PAGE 6 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. BEING A PORTION OF THE LAND DESCRIBED IN THE DEED RECORDED JUNE 23, 1992 AS INSTRUMENT NO. 230917, OF OFFICIAL RECORDS OF SAID COUNTY, LYING SOUTHERLY OF THE FOLLOWING DESCRIBED LINE:
BEGINNING AT THE CENTERLINE INTERSECTION OF BUENA VISTA A VENUE AND 6TH STREET, AS SHOWN ON THE RECORD OF SURVEY FILED IN BOOK 143, PAGES 94 THROUGH 113 OF RECORDS OF SURVEY, RECORDS OF SAID COUNTY; THENCE NORTH 08°02'0811 EAST 1482.02 FEET ALONG THE CENTERLINE OF SAID BUENA VISTA AVENUE; THENCE SOUTH 81 °57'52" EAST 30.00 FEET TO THE EASTERLY LINE OF SAID BUENA VISTA AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 52°08'39" EAST 22.39 FEET TO A NON-TANGENT CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 9968.00 FEET, A RADIAL LINE TO SAID CURVE BEARS NORTH 06°12'34" EAST; THENCE EASTERLY 571.01 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 03°16'56"; THENCE SOUTH 80°30'30" EAST 51.02 FEET; THENCE SOUTH 33°51'13" EAST 39.01 FEET TO A LINE THAT IS PARALLEL WITH AND 0.25 FEET WESTERLY OF THE EASTERLY LINE OF LOT 9 IN BLOCK 64 OF SOUTH RIVERSIDE LAND AND WATER COMPANY LANDS, AS SHOWN BY MAP RECORDED IN BOOK 9, PAGE 6 OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, STATE OF CALIFORNIA; THENCE SOUTH 08°03'4011 WEST 11.86 FEET ALONG SAID PARALLEL LINE TO THE SOUTHERLY LINE OF THE NORTHERLY 100.00 FEET OF THE SOUTHERLY 198.00 FEET OF SAID LOT 9 AND THE POINT OF TERMINATION.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “B”
Site Plan
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EXHIBIT "B"
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
SITE PLAN
[SEE ATTACHED TWO (2) PAGES]
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B
-2
Exhibit “B”
Site Plan
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Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
B
-3
Exhibit “B”
Site Plan
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Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
C-1
Exhibit “C”
Escrow Agent Consent
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EXHIBIT "C"
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
ESCROW AGENT CONSENT
Ticor Title Company of California accepts that certain Affordable Housing Disposition Agreement (Corona Second Street Family Apartments), dated as of [TO BE DETERMINED], by and among the City of Corona, a municipal corporation,, the City of Corona Housing Authority, a public body, corporate and politic, and Second Street Family LP, a California limited partnership, agrees to act as "Escrow Agent" pursuant to such agreement and agrees to be bound by all provisions of such agreement applicable to it as the Escrow Agent.
ESCROW AGENT:
Ticor Title Company of California
By:
Name:
Its:
Dated:
Escrow No.: _______________________
Notice Address:
Ticor Title Company of California
4400 MacArthur Blvd., Suite 800
Newport Beach, CA 92660
Attn: Kim Hernandez
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
D-1
Exhibit "D"
Form of Deed
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EXHIBIT "D"
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
FORM OF DEED
[SEE ATTACHED SIX (6) PAGES]
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Exhibit "D"
Form of Deed
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RECORDING REQUESTED BY:
City of Corona Housing Authority
WHEN RECORDED MAIL TO AND MAIL
TAX STATEMENTS TO:
Second Street Family LP
414 E. Chapman Avenue
Orange, CA 92866
Attn: Eunice Bobert
No fee for recording pursuant to
Government Code Section 27383
APNs: ___________________________________ SPACE ABOVE FOR RECORDER'S USE ONLY The undersigned declares exemption under the following:
Exempt from fee per Government Code 27388.1(a)(2)(D);
recorded by the State or any county, municipality, or other political subdivision of the State.
GRANT DEED
The undersigned Grantor declares:
Documentary transfer tax is $________,
(X) computed on full value of property conveyed, or
( ) computed on full value less of liens and encumbrances remaining at time of sale. ( ) Unincorporated area:
(X) City of Corona
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, the CITY OF CORONA HOUSING AUTHORITY, a public body, corporate and politic, organized under the laws of the State of California ("Grantor"), hereby grants and conveys to SECOND STREET FAMILY LP, a California limited partnership ("Grantee"), the following described real property in the City of Corona, County of Riverside, State of California:
SEE ATTACHED ATTACHMENT "1"
SUBJECT TO:
1. Real property taxes and assessments, not delinquent.
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Exhibit "D"
Form of Deed
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2. Covenants, conditions, restrictions, easements, exceptions, reservations, rights, rights-of-way and other matters of record or discoverable by inspection or survey. Grantor has caused this Grant Deed to be signed by Grantor's authorized representative on ____________________, 20__.
GRANTOR:
CITY OF CORONA HOUSING
AUTHORITY, a public body, corporate and
politic, organized under the laws of the State
of California
By:
Authority Executive Director
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Exhibit "D"
Form of Deed
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
ATTACHED TO: GRANT DEED
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
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Exhibit "D"
Form of Deed
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ATTACHMENT 1
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
[To be inserted after LLA is recorded]
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Exhibit “E”
Regulatory Agreement
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EXHIBIT "E"
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
REGULATORY AGREEMENT
[SEE ATTACHED FORTY-ONE (41) PAGES]
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Exhibit "E"
Regulatory Agreement
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Corona Housing Authority
400 S. Vicentia Avenue
Corona, CA 92882
Attn: Executive Director
APNs: 118-270-053 SPACE ABOVE FOR RECORDER'S USE ONLY
118-270-055 EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383 AND §27388.1(a)(2)(D)
REGULATORY AGREEMENT
(Corona Second Street Family Apartments)
by and among
CITY OF CORONA HOUSING AUTHORITY,
a public body, corporate and politic,
organized under the laws of the State of California,
CITY OF CORONA,
a California municipal corporation,
and
SECOND STREET FAMILY LP,
a California limited partnership
[Dated as of __________, 2024 for reference purposes only] Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
Regulatory Agreement
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REGULATORY AGREEMENT
(Corona Second Street Family Apartments)
This REGULATORY AGREEMENT (Corona Second Street Family Apartments) ("Regulatory Agreement") is made and entered into as of ____________, 202__, by and among the CITY OF CORONA HOUSING AUTHORITY, a public body, corporate and politic, organized under the laws of the State of California (the "Authority"), CITY OF CORONA, a California municipal corporation ("City") and SECOND STREET FAMILY LP, a California limited partnership ("Owner").
RECITALS
A. City, Authority and Owner's predecessor-in-interest entered into that certain Affordable Housing Disposition and Development Agreement (Corona Second Street Family Apartments) dated as of August 21, 2024 (the "Affordable Housing Agreement"), which provides that Authority will convey to Owner that certain property located at ___________ 2nd Street, as more specifically described in Attachment No. 1, incorporated herein by this reference (the "Property"), subject to the terms and conditions of the Affordable Housing Agreement.
Under the Affordable Housing Agreement, both the Authority and the City have agreed to provide financial assistance to the Owner for acquisition of the Property and the construction thereon by Owner of a one hundred fifteen (115) unit multifamily residential development, including one manager's unit (the "Project").
B. Authority, City and Owner desire that the Project be operated as a multifamily residential community on the Property with the residential units made available to Qualified Households at an Affordable Rent as more specifically defined herein. This Regulatory Agreement establishes terms and conditions which govern the operation of the Property.
C. The terms of the Affordable Housing Agreement require that certain covenants and affordability restrictions remain in full force and effect on the Project for a term commencing on the date of recordation of this Regulatory Agreement and continuing in perpetuity following the recordation of Certificate of Completion as defined herein.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
UNDERTAKINGS SET FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, OWNER, AUTHORITY AND CITY DO HEREBY COVENANT AND AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS AS FOLLOWS:
1. Definitions of Certain Terms. AS USED IN THIS 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. ALL INITIALLY CAPITALIZED TERMS USED AND NOT OTHERWISE Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
Regulatory Agreement
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DEFINED IN THE RECITALS OR IN THIS SECTION SHALL HAVE THE MEANING ASCRIBED TO SUCH TERM BY THE AFFORDABLE HOUSING AGREEMENT.
1.1 30% Household. An individual or household that has a household income equal to or less than thirty percent (30%) of the then current AMI adjusted for household size.
1.2 50% Household. An individual or household that has a household income equal to or less than fifty percent (50%) of the then current AMI adjusted for household size.
1.3 60% Household. An individual or household that has a household income equal to or less than fifty-nine and one-half percent (60%) of the then current AMI adjusted for household size.
1.4 70% Household. An individual or household that has a household income equal to or less than seventy percent (70%) of the then current AMI adjusted for household size.
1.5 80% Household. An individual or household that has a household income equal to or less than eighty percent (80%) of the then current AMI adjusted for household size.
1.6 Adjusted for Family Size Appropriate to the Unit. So long as operation of the Project occurs at a time that a TCAC extended use agreement or regulatory agreement is in place on the Project, occupancy requirements for the Qualifying Units in the Project shall be calculated under Title 26, Subtitle A, Section 42(g)(2)(c), Subsections (i) and (ii) of the Internal Revenue Code (i.e., 1.5 individuals for each separate bedroom). When no federal statute is applicable to the Project, the occupancy requirements for the Qualifying Units in the Project shall comply with Health and Safety Code Section 50052.5(h).
1.7 Affordable Rent.
1.8 Qualifying Units. In reference to each Qualifying Unit, the maximum rent allowed for the Qualifying Unit by the TCAC Regulatory Agreement to qualify for, receive and be in compliance with the applicable program for the Tax Credits or the affordable rent amounts set forth in Health and Safety Code Section 50053(b) for the applicable household limit, whichever is less. The HOME-ARP Units are subject to additional affordable rent restrictions as set forth below.
1.9 HOME-ARP Qualifying Households. For each Unit occupied by a HOME-ARP Qualifying Household during the HOME-ARP Term only, the maximum rent (rent plus utilities) allowed shall not exceed thirty percent (30%) of the adjusted income of a household whose annual income is equal to or less than fifty percent (50%) of the AMI adjusted for number of bedrooms in the unit. HUD will publish the HOME-ARP rent limits on an annual basis.
1.10 HOME-ARP Units With Rental Subsidy. Notwithstanding subsection (ii) above, for a HOME-ARP Unit that receives a federal or state project-based rental subsidy and is occupied by a HOME-ARP Qualifying Household that pays as a contribution to rent no more than 30 percent (30%) of the household’s adjusted income, the maximum rent allowed is the rent Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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allowable under the federal or state project-based rental subsidy program (i.e., the tenant rental contribution plus the rental subsidy allowable under that program). For a HOME-ARP Unit that receives tenant-based rental assistance, the maximum rent allowed is the rent permissible under the applicable rental assistance program (i.e., the tenant rental contribution plus the rental subsidy allowable under that rental assistance program).
1.11 HOME-ARP Low Income Households. For each HOME-ARP Unit occupied by HOME-ARP Low Income Households during the HOME-ARP Term only, the maximum rent (rent plus utilities) allowed be as set forth in 24 CFR 92.252(a) (i.e., the lesser of the fair market rent for existing housing for comparable units in the area, as established by HUD, or a rent equal to 30 percent (30%) of the income of a family at 65 percent (65%) of the AMI, adjusted for number of bedrooms in the unit). The rent limits for HOME-ARP Low -Income Households apply to the rent plus the utility allowance established pursuant to the HOME-ARP Notice.
1.12 AMI. The Area Median Family Income for the Riverside-San BernardinoOntario MSA as published annually by the federal Department of Housing and Urban Development (HUD) on setting income limits pursuant to Section 8 of the United States Housing Act of 1937.
1.13 Annual Report. The Certification of Continuing Program Compliance attached to this Regulatory Agreement as Attachment No. 3 and incorporated by this Reference or comparable report filed annually by Owner with TCAC or other governmental agencies.
1.14 Automobile Liability Insurance. Insurance coverage against claims of personal injury (including bodily injury and death) and property damage covering all Owner owned, leased, hired and non-owned vehicles, with minimum limits for bodily injury and property damage of One Million Dollars ($1,000,000). Such insurance shall be provided by a business or commercial vehicle policy and may be provided through a combination of primary and excess or umbrella policies, all of which shall be subject to pre-approval by the Authority (on behalf of the Authority and the City), which approval shall not be unreasonably withheld, delayed or conditioned.
1.15 Certificate of Completion. The written certification of Authority (on behalf of the Authority and the City), in substantially the form of Exhibit J attached to the Affordable Housing Agreement, certifying that the Project has been completed in compliance with the terms and conditions of this Agreement.
1.16 HCD. The State of California Department of Housing and Community Development.
1.17 HOME Act. Part A of Subchapter II of Chapter 130 of Title 42 of the United States Code, commencing with Section 12741, as amended or superseded, including all implementing regulations, rulings and policies.
1.18 HOME-ARP Low-Income Household. An individual or family who meets the criteria for a low-income household pursuant to 24 CFR 92.2. If the income of a HOME-ARP Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Low Income Household increases after initial occupancy of the HOME-ARP Unit such that the individual or family no longer meets the criteria for a low income household pursuant to 24 CFR
92.2, the tenant can remain in the HOME-ARP Unit, the HOME-ARP Unit will be considered temporarily out of compliance and the Authority shall be required to take action in accordance with Sections VI.B.15 and VI.B.17 of HOME-ARP Notice.
1.19 HOME-ARP Qualifying Household. An individual or family who meets the criteria of a qualifying population specified in Section IV.A of the HOME-ARP Notice.
1.20 HOME-ARP Term. The period beginning on the date of recordation of this Agreement and ending on the later of the fifteenth (15th) anniversary of the recording of the Certificate of Completion and the end of the term of any Housing Assistance Payments Contract between the County and Owner with respect to Section 8 Project-Based Vouchers for the Project.
1.21 HOME-ARP Units. The one (1) Studio Unit and one (1) Three Bedroom Unit constructed, in part, with HOME-ARP funds. The HOME-ARP Units will be "floating" units as that term is defined in 24 CFR 92.252(j). Owner shall provide City with information regarding any substitution or filling vacancies in any “floating” unit so that the Project remains in compliance with the HOME-ARP Regulations and the HOME-ARP Notice. Not less than 70 percent (70%) of the total number of Qualifying Units assisted with HOME-ARP funds must be restricted for occupancy by households that are HOME-ARP Qualifying Households at the time of the household’s initial occupancy. Not more than 30 percent (30%) of the total number of HOME-ARP Units may be restricted to HOME-ARP Low-Income Households and such units do not have to be restricted for occupancy by HOME-ARP Qualifying Households, however rental units restricted to HOME-ARP Low-Income Households are only permitted in projects that include HOME-ARP Units for HOME-ARP Qualifying Households. Units restricted for occupancy by HOME-ARP Qualifying Households must be occupied by households that meet the definition of a HOME-ARP Qualifying Household at the time of initial occupancy of the HOME-ARP Unit. After initial occupancy, a HOME-ARP Qualifying Household retains its eligibility to occupy a HOME-ARP Unit irrespective of any changes in the HOME-ARP Qualifying Household’s income or whether the household continues to meet the definition of a HOME-ARP Qualifying Household. As such, a HOME-ARP Unit remains in compliance with the HOME-ARP unit restriction set forth above as long as the unit is occupied by a HOME-ARP Qualifying Household that met the definition of a HOME-ARP Qualifying Household at the time of initial occupancy. At initial occupancy, units restricted for HOME-ARP Low-Income households must be occupied by households that meet the definition of low-income in 24 CFR
92.2. 1.22 HUD. The United States Department of Housing and Urban Development.
1.23 Income Certification Form. The Certification of Tenant Eligibility attached to this Regulatory Agreement as Attachment No. 2 and incorporated by this reference, or comparable income certification form required by TCAC or other governmental agencies.
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Exhibit “E”
Regulatory Agreement
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1.24 Liability Insurance. Commercial general liability insurance against claims for bodily injury, personal injury, death, or property damage occurring upon, in, or about the Property, the Project or adjoining streets or passageways, at least as broad as Insurance Services Office Occurrence Form CG0001, with a minimum liability limit of Two Million Dollars ($2,000,000) for any one occurrence and which may be provided through a combination of primary and excess or umbrella insurance policies. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the Project or the general aggregate limit shall be twice the required minimum liability limit for any one occurrence.
1.25 Management Agent. A person with significant experience in management of affordable rental housing projects substantially similar to the Project and that is, at the time, managing other financially self-supporting, successful affordable rental housing projects substantially similar to the Project.
1.26 Manager Unit. The one (1) Three Bedroom Unit within the Project reserved exclusively for use by the on-site manager employed by the Owner or the Management Agent, as applicable.
1.27 One Bedroom Unit. Any one of the one bedroom residential accommodations within the Project.
1.28 Project. The operation of a multi-family rental housing project which shall include approximately one hundred fourteen (114) units, which shall be rented to Qualified Households at Affordable Rents, the Manager Unit and all related on- and off-site improvements, as more particularly described in the Affordable Housing Agreement.
1.29 Property Insurance. Insurance providing coverage for the Property and all improvements on or to the Property against loss, damage, or destruction by fire and other hazards encompassed under the broadest form of property insurance coverage then customarily used for like properties in the County of Riverside, in an amount equal to one hundred percent (100%) of the replacement value (without deduction for depreciation) of all improvements comprising the Project (excluding excavations and foundations) and in any event sufficient to avoid coinsurance and with no co-insurance penalty provision, with "ordinance or law" coverage. To the extent customary for like properties in the County of Riverside at the time, such insurance shall include coverage for explosion of steam and pressure boilers and similar apparatus located on the Property; an "increased cost of construction" endorsement; and an endorsement covering demolition and cost of debris removal, all subject to policy sublimits. Property Insurance shall also include rental or business interruption insurance in an amount, at least, equal to the average annual gross income from the Project for the preceding three (3) calendar years and providing for a 12-month extended period of indemnity.
1.30 Qualified Households. A household that (1) intends to reside in a Qualifying Unit; and (2) whose income does not exceed the maximum income allowable for the subject Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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Qualifying Unit; or in the case of a HOME-ARP Unit meets the qualifications for occupancy under the HOME-ARP Notice.
1.31 Qualifying Units. The one hundred fourteen (114) Studio Units, One Bedroom Units, Two Bedroom Units, and Three Bedroom Units within the Project restricted to occupancy by Qualified Households as set forth in Section 6, including, without limitation, the HOME-ARP Units.
1.32 Studio Unit. Any one of the residential accommodations within the Project consisting of a single room serving as a living room, bedroom and kitchen with a separate bathroom.
1.33 Tax Credits. An allocation from TCAC of four percent (4%) or nine percent (9%) federal low income housing tax credits or of state low income housing tax credits to finance a portion of the costs of the Project, all in accordance with Section 42 of the Internal Revenue Code of 1986, as amended, the applicable provisions of the California Taxation and Revenue Code, all associated Internal Revenue Service regulations and all associated TCAC regulations.
1.34 TCAC. The California Tax Credit Allocation Committee or its successor in function.
1.35 TCAC Regulatory Agreement. The regulatory agreement required to be recorded against the Property by TCAC to obtain the Tax Credits.
1.36 Term. The period of time following the date of recordation of this Agreement, and continuing in perpetuity.
1.37 Three Bedroom Unit. Any one of the three bedroom residential accommodations within the Project.
1.38 Two Bedroom Unit. Any one of the two bedroom residential accommodations within the Project.
1.39 Workers Compensation Insurance. Workers compensation insurance complying with the provisions of California law and an employer's liability insurance policy or endorsement to a liability insurance policy, with a minimum liability limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease, covering all employees of Owner.
2. Reservation of Property for Affordable Housing. The Owner covenants and agrees to reserve and restrict the Property for Construction of the Project and, thereafter, reserve and restrict use and residential occupancy of the Qualifying Units by individuals and families who, at the time of initial occupancy of a Qualifying Unit and continuously thereafter (subject to the other provisions of this Regulatory Agreement), until the end of the Term, are members of a Qualified Household. One (1) Three Bedroom Unit within the Project may be used as a Manager Unit at any given time provided that no Qualifying Unit shall be used as a Manager Unit.
3. Affordable Multi-Family Residential Rental Property Restrictive Covenant. The Owner covenants to and for the benefit of the Authority and City that the Owner shall develop, own, Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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manage and operate, or cause the management and operation of, the Project to provide multifamily residential rental housing in the Qualifying Units only to Qualified Households at an Affordable Rent. The Owner hereby confirms and remakes its covenant set forth in Section 4.1 of the Affordable Housing Agreement to develop the Property with the Project and such covenant is incorporated into this Regulatory Agreement in its entirety by this reference. The Owner will not knowingly permit any Qualifying Unit to be used on a transient basis and will not lease or rent any Qualifying Unit for an initial period of less than twelve (12) months. No Qualifying Unit will, at any time, be leased or rented for use as a hotel, motel, time share, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitary or rest home. The term of affordability for the HOME-ARP Units is fifteen (15) years. Following expiration of the HOME-ARP Term the HOME-ARP Units will no longer be restricted pursuant to the HOME Act, the HOME-ARP Regulations, the HOME-ARP Notice, or any HUD regulations, but shall continue to be restricted by the Authority as Qualifying Units pursuant to this Agreement. At all times during the HOME-ARP Term, the Owner's action with respect to the Project shall at all times be in conformity with: (i) all requirements imposed on projects assisted with HOME-ARP funds as contained in the HOME Act, the HOME-ARP Regulations, and other implementing rules and regulations, as such may be amended or supplemented from time to time; and (ii) the HOME-ARP Notice ; and other implementing rules and regulations, as such may be amended or supplemented from time to time. At all times during the HOME-ARP Term, the Project must comply with the property standards for new construction projects pursuant to 24 CFR 92.251(a).
4. Continuous Operation Covenant. The Owner covenants to and for the benefit of the Authority and City to cause the Project to be continuously operated, in accordance with the other provisions of this Agreement, throughout the Term. Owner shall use commercially reasonable efforts to ensure that each Qualifying Unit and the Manager Unit shall not remain vacant for a period longer than ninety (90) days or such shorter period of time as may be required by TCAC regulations.
5. Abandonment. The Owner shall not abandon or surrender the operation of all or any part of the Project during the Term, except due to material casualty or condemnation.
6. Rental of Qualifying Units. The Owner covenants that each Qualifying Unit shall be occupied or available for occupancy by a Qualified Household at an Affordable Rent on a continuous basis throughout the Term, in accordance with the following tenant income level mix:
6.1. Not less than one (1) of the Studio Units shall be occupied or available for occupancy by a 30% Household, which during the HOME-ARP Term shall be classified as a HOME-ARP Unit and be occupied or available for occupancy by a HOME-ARP Qualifying Household; and
6.2. Not less than one (1) of the Studio Units shall be occupied or available for occupancy by a Qualified Households that is a 50% Household; and Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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6.3. Not less than three (3) of the Studio Units shall be occupied or available for occupancy by Qualified Households that are 60% Households; and
6.4. Not less than one (1) of the Studio Units shall be occupied or available for occupancy by a Qualified Household that is a 70% Households; and
6.5. Not less than one (1) of the One Bedroom Units shall be occupied or available for occupancy by a Qualified Household that is a 30% Household; and
6.6. Not less than one (1) of the One Bedroom Units shall be occupied or available for occupancy by a Qualified Household that is a 50% Household; and
6.7. Not less than fourteen (14) of the One Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 60% Households; and
6.8. Not less than two (2) of the One Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 70% Households; and
6.9. Not less than five (5) of the Two Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 30% Households; and
6.10. Not less than five (5) of the Two Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 50% Households; and
6.11. Not less than thirty-one (31) of the Two Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 60% Households; and
6.12. Not less than five (5) of the Two Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 70% Households; and
6.13. Not less than five (5) of the Three Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 30% Households; and
6.14. Not less than five (5) of the Three Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 50% Households, one (1) of which during the HOME-ARP Term shall be classified as a HOME-ARP Qualifying Unit and be occupied or available for occupancy by a HOME-ARP Qualifying Household; and
6.15. Not less than twenty-nine (29) of the Three Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 60% Households; and
6.16. Not less than five (5) of the Three Bedroom Units shall be occupied or available for occupancy by Qualified Households that are 70% Households.
7. Affordable Rent. The monthly rent charged to a Qualified Household for the occupancy of a Qualifying Unit shall never exceed an Affordable Rent for such Qualifying Unit.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
E-11
Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
7.1. Rent Increases. Rent for Qualifying Units may be increased only once per calendar year, based on changes in Area Median Income; provided that the rent for each Qualifying Unit must never exceed an Affordable Rent for the Qualifying Unit as necessary to maintain the tenant income mix specified in Section 6.
7.1.1. Maintaining Financial Stability. Notwithstanding Section 7.1, if, during the Term and through no fault of Developer, the Project generates insufficient income to cover its operating costs, required deposits to replacement reserves, and debt service on approved financing as shown on the Annual Budget, and as is necessary to maintain the financial stability of the Project, with the exception of the HOME-ARP Units during the HOME-ARP Term, Developer may request approval of the Authority and the City (a) to allow 80% Households to occupy the Qualifying Units that are otherwise required to be occupied by a 30% Household, a 50% Household, a 60% Household or a 70% Household pursuant to this Agreement, and (b) to increase the rent on one or more of the Qualifying Units that are otherwise required to be occupied by a 30% Household, a 50% Household, a 60% Household or a 70% Household pursuant to this Agreement to an Affordable Rent for a 80% Household. The rent increase permitted by this Section 7.1.1 is subject to the following requirements: (x) concurrently with the request, Developer shall provide the Authority and the City with evidence that the Project is not operating at a financially stable level, (y) a proposed operating budget reflecting the requested rent increases (the “Operating Budget”); and (z) a description of efforts to obtain alternate sources of rental subsidy and/or maintain financial stability. The number of the Qualifying Units subject to the rent increase and the amount of the proposed increase may not be greater than the number or amount required to ensure that the Project generates sufficient income to cover its operating costs, required deposits to replacement reserves, and debt service on approved financing as shown on the Operating Budget, and as is necessary to maintain the financial stability of the Project. In addition, Developer hereby agrees to the following:
7.1.1.1 Developer shall use good faith commercially reasonable efforts to obtain alternative sources of rental subsidies and shall provide the Authority and City with annual progress reports on efforts to obtain alternative sources of rental subsidies that would allow the rents to be reduced. Upon receipt of any alternative rental subsidies, Developer shall reduce the rents back to the original restrictions required by this Agreement to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs, required replacement reserves and debt service of the Project as shown on the Operating Budget.
7.1.1.2 Developer shall provide tenants in the Qualifying Units with notice of any rent increase pursuant to this Section 7.1.1, and shall notify the tenant that if they have received a tenant-based voucher from the County they may use the tenant-based voucher for their Qualifying Unit.
7.1.1.3 All rent increases for the Qualifying Units are subject to Authority and City approval pursuant to the terms of this Section 7.1. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the Authority and the City a schedule of any proposed increase in the rent. The Authority or City will disapprove a rent increase if it does not comply with the restrictions set forth in this Section 7.1.1.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
7.1.1.4 Developer shall give tenants of all Qualifying Units written notice at least sixty (60) days prior to any rent increase.
7.1.1.5 With respect to any Qualifying Units for which Authority and City has authorized Developer to increase rents pursuant to this Section, the preference to rent to households which are homeless or at risk of homelessness shall automatically terminate. The City’s local preferences as Section 8.8 of this Agreement shall remain.
7.2. Determination of Household Income. Determination of Qualified Household income shall be made by the Owner at the time of initial application by an individual or family for occupancy of a Qualifying Unit. At the time of initial application, the Owner shall require an applicant to complete the Income Certification Form and certify the accuracy of the information provided on such form. On or before March 31 of each calendar year during the Term, the Owner shall require each Qualified Household occupying a Qualifying Unit to recertify the Qualified Household's income on the Income Certification Form. The Owner shall make a good faith effort to verify the accuracy of income information provided in any Income Certification Form by an applicant for occupancy of a Qualifying Unit or by a Qualified Household occupying a Qualifying Unit, by taking one or more of the following steps, as reasonably required or indicated: (1) obtain an income tax return and copy of each W2 Wage and Earnings Statement for the most recently concluded income tax year; (2) conduct a credit reporting agency or similar search; (3) obtain an income verification form from the applicant's or the Qualified Household's current employer(s); (4) obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant or the Qualified Household receives assistance from either of such agencies; or (5) if the applicant or an adult member of a Qualified Household is unemployed and has no such income tax return, obtain another form of independent verification. For purposes of this Section 7.2, the Owner may conclusively rely upon the evidence of the age of the occupant(s) of a Qualifying 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. All such verification information shall only be obtained by the Owner after obtaining the applicant's or the Qualified Household's written consent for the release of such information to the Owner. Failure to consent in writing to the release of such income verification information to the Owner may disqualify an applicant for occupancy of a Qualifying Unit or be grounds for termination of Qualified Household's occupancy of a Qualifying Unit.
7.3. The Qualifying Units are not specifically assigned to any qualifying income category (i.e., 30% Household, 50% Household, 60% Household or 70% Household). The restricted income level of each Qualifying Unit may change as Qualifying Units become vacant, a Qualified Household tenant's income changes or other Qualifying Units are occupied by Qualified Households. In all circumstances, though, the rent for each Qualifying Unit shall be an Affordable Rent for the Qualifying Unit as necessary to maintain the restricted income tenant mix required under Section 6. If, upon any recertification, the income of a previously Qualified Household exceeds one hundred forty percent (140%) of the qualifying income for a 60% Household, then the Owner or Management Agent shall notify such household that its lease for Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
E-13
Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
its Qualifying Unit will not be renewed upon the expiration of its lease, unless the household again becomes a Qualified Household upon recertification prior to the expiration of its lease. In any event, if the income category of a Qualified Household upon recertification is different from the previous income of the Qualified Household (i.e. a 30% Household becomes a 50% Household, 60% Household or a 70% Household; a 50% Household becomes a 30% Household 60% Household, or a 70% Household; a 60% Household becomes a 30% Household, 50% Household or a 70% Household; or 70% Household becomes a 30% Household a 50% Household, or a 60% Household; or any similar change in the income of a Qualified Household tenant of the Project), the Owner or Management Agent shall rent the next available Unit to a Qualified Household with an income level that will maintain the tenant income level mix set forth in Section 6. To the extent the federal or state low-income housing tax credit requirements conflict with the requirements in this Section 7.3 relative to the continued occupancy by households that do not qualify as Qualified Households, the federal or state low-income housing tax credit requirements shall apply in place of the provisions in this Section 7.3.
7.4. The Owner shall maintain on file all Income Certification Forms completed by applicants for occupancy of Qualifying Units and by Qualified Households that occupied or are occupying Qualifying Units in accordance with Section 6 and shall provide copies of the rent roll and Income Certification Forms to the Authority for its review and approval within fifteen (15) days following Notice to the Owner.
7.5. The Owner and each Qualified Household occupying a Qualifying Unit shall permit the Authority to conduct inspections of the Property, the Project and the interior and exterior of each Qualifying Unit, from time-to-time, for purposes of verifying compliance with this Regulatory Agreement, upon fifteen (15) days prior written notice to the Owner and subject to tenant's rights under applicable Law.
7.6. The Owner shall submit its first Annual Report to the Authority on the April 30th immediately following the issuance of the final Certificate of Occupancy for the Project by the City. Thereafter, on each April 30 during the Term, the Owner shall submit an Annual Report to the Authority. The Authority shall maintain the confidentiality of the information contained in any Annual Report specifically relating to any particular Qualified Household occupying a Qualifying Unit, to the extent reasonably allowed by Law, as determined by the Authority's general or special counsel.
8. Owner Covenant Regarding Lease of Qualifying Units. The Owner, for itself, its successors and assigns, covenants and agrees that, if any Qualifying Unit is rented or leased during the Term, the rental or lease of the Qualifying Unit shall be accomplished through a written lease agreement and all of the following restrictions shall apply:
8.1. A Qualified Household shall be the record tenant and only occupant of the Qualifying Unit.
8.2. The lease for each Qualifying Unit shall be for an initial term of not less than twelve (12) months.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
E-14
Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
8.3. The lease for each HOME-ARP Unit during the HOME-ARP Term shall include any provisions necessary to comply with the requirements of the Violence Against Women Reauthorization Act of 2013 (Pub. L. 113–4, 127 Stat. 54) applicable to HUD-funded programs as implemented by 24 CFR 92.359.
8.4. The lease for each HOME-ARP Unit during the HOME-ARP Term shall not contain any provision which is prohibited by 24 C.F.R. 92.253(b) and the lease for each Qualifying Unit shall not contain any of the following provisions:
8.4.1. An agreement by the Qualified Household to be sued, to admit guilt or to the entry of a judgment in favor of the Owner in a lawsuit brought in connection with the lease;
8.4.2. An agreement by the Qualified Household that the Owner may take, hold or sell personal property of any member(s) of the Qualified Household, without notice to the Qualified Household and a court decision on the respective rights of the Owner and the member(s) of the Qualified Household, other than an agreement by the Qualified Household concerning disposition of personal property remaining in the Qualifying Unit after the Qualified Household has moved out of the Qualifying Unit;
8.4.3. An agreement by the Qualified Household not to hold the Owner or its agents legally responsible for any willful misconduct or negligence attributable to the Owner or its agents;
8.4.4. An agreement by the Qualified Household that the Owner may institute a lawsuit, involving or affecting the Qualified Household or any of its members, without notice to the Qualified Household;
8.4.5. An agreement by the Qualified Household that the Owner may evict the Qualified Household without instituting a civil court proceeding in which the Qualified Household has an opportunity to present a defense or before a court decision on the respective rights of the Owner and the Qualified Household;
8.4.6. An agreement by the Qualified Household to waive any right to a trial by jury;
8.4.7. An agreement by the Qualified Household to waive the Qualified Household's right to appeal or to otherwise challenge a court decision in connection with the lease;
8.4.8. An agreement by the Qualified Household to pay attorney's fees or other legal costs, even if the Qualified Household wins in a court proceeding by the Owner against the Qualified Household; provided, however, the Qualified Household may be obligated to pay costs if the Qualified Household loses such a legal action;
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
8.4.9. An agreement by the Qualified Household to pay one (1) or more security deposits (or the equivalent) totaling in excess of the amount of two month's rent for such Qualifying Unit. Failure to pay any security deposit installment may constitute a breach of the lease.
8.5. Each lease for a Qualifying Unit shall contain all of the following provisions:
8.5.1. An agreement authorizing the Owner to immediately terminate the tenancy of a Qualified Household occupying a Qualifying Unit, where one or more members of that Qualified Household misrepresented any fact material to the qualification of such household as a Qualified Household;
8.5.2. An agreement providing that each Qualified Household occupying a Qualifying Unit shall be subject to annual certification or recertification of income as a condition to continued occupancy of the Qualifying Unit;
8.5.3. An agreement providing that each Qualified Household occupying a Qualifying Unit may be subject to rental increases in accordance with this Regulatory Agreement; and
8.5.4. Providing that the Owner will not discriminate on the basis of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, genetic information or receipt of public assistance or housing assistance in connection with rental of a Qualifying Unit, or in connection with the employment or application for employment of persons for operation and management of the Project, and all contracts, applications and leases entered into for such purposes shall contain similar non-discrimination clauses to such effect.
8.6. Any termination of a lease or refusal to renew a lease must be in conformance with 24 CFR 92.253(c) for a HOME-ARP Unit during the HOME-ARP Term, the requirements of the Violence Against Women Reauthorization Act of 2013 ((Pub. L. 113-4, 127 Stat. 54) applicable to HUD-funded programs for a HOME-ARP Unit during the HOME-ARP Term, and must be preceded by not less than sixty (60) days' written notice to the tenant by Owner specifying the grounds for the action.
8.7. The Owner shall not terminate the tenancy or refuse to renew the lease or rental agreement of a Qualified Household except for: (i) serious or repeated violations of the terms and conditions of the lease; (ii) because the previously Qualified Household is no longer a Qualified Household; (iii) for violation of applicable Federal, State, or local law; or (iv) for other good cause. The Owner shall follow all applicable laws in connection with termination of the tenancy of a Qualified Household or a refusal to renew the lease or rental agreement of a Qualified Household, including conformance with 24 C.F.R. 92.253(c).
8.8. Tenant Selection Policies and Criteria. The Owner shall adopt written tenant selection policies and criteria that:
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
8.8.1. meet the requirements for tenant selection set out in 24 C.F.R. 92.253(d) with respect to the HOME Units;
8.8.2. are consistent with the purpose of providing affordable rental housing for Qualified Households at an Affordable Rent;
8.8.3. are reasonably related to tenant eligibility and ability to perform the obligations of the lease for a Qualifying Unit;
8.8.4. to the extent allowed by applicable federal and state fair housing laws and subject to all applicable governmental requirements and any funding obtained by Owner to operate and/or develop the Project that has been approved by the Authority and the City (including, without limitation, TCAC, CDLAC (if applicable), Internal Revenue Service and HUD requirements), among Qualified Households which are otherwise eligible to rent a Qualifying Unit, give reasonable preference and consideration to the housing needs of applicant households which are homeless or at risk of homelessness and have documentable ties to the City of Corona, including but not limited to priority placement on a written waiting list, for twenty (20) of the Qualifying Units;
8.8.5. to the extent allowed by applicable federal and state fair housing laws and subject to all applicable governmental requirements and any funding obtained by Owner to operate and/or develop the Project that has been approved by the Authority and the City (including, without limitation, TCAC, CDLAC (if applicable), Internal Revenue Service and HUD requirements), among Qualified Households which are otherwise eligible to rent a Qualifying Unit, give reasonable preference and consideration to the housing needs of applicant households residing in the City of Corona that are involuntarily displaced by natural disaster, or by activities of the Authority or the City including but not limited to priority placement on a written waiting list;
8.8.6. provide for the selection of tenants from a written waiting list in the chronological order of their application subject to Sections 8.8.4 and 8.8.5 above, insofar as is practicable;
8.8.7. give prompt written notice to any rejected applicant of the grounds for rejection;
8.8.8. provide for all of the Qualifying Units to be available for occupancy on a continuous basis to Qualified Households at an Affordable Rent; and
8.8.9. do not give preference to any particular class or group of Persons in leasing or renting the Qualifying Units, except as provided in Sections 8.8.4 and 8.8.5 and to the extent that a tenant must be a Qualified Household.
9. Non-Discrimination. All units in the Project shall be available at an Affordable Rent for occupancy on a continuous basis to Qualified Households. Except as provided in Sections 8.8.4 Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
and 8.8.5, Owner shall not give preference to any particular class or group of persons in renting the units in the Project. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit. Neither Owner nor any person claiming under or through Owner, 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 Unit or in connection with the employment of persons for the operation and management of any Unit, the Project or the Property. All deeds, leases or contracts made or entered into by Owner as to the units, the Project or the Property or any portion thereof, shall contain covenants prohibiting discrimination, as prescribed by this Regulatory Agreement. Owner shall include a statement in all advertisements, notices and signs for the availability of units in the Project for rent to the effect that Owner is an Equal Housing Opportunity Provider.
10. Equal Housing Notice. Provide for a statement in all advertisements, notices and signs for the availability of Qualifying Units for lease or rent to the effect that the Owner is an equal housing opportunity provider, and include an equal housing opportunity logotype in all notices, signs and advertisements in print media for the Qualifying Units.
11. Development and Management of the Project.
11.1. Management of Project. Owner shall be responsible for management of the Project including, without limitation, the selection of Qualified Households, certification and recertification of household size, income, gender and the age of the head of household and relation of head of household to the household, of all Qualified Households, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. Neither Authority nor City shall have any responsibility for the management or operation of the Project or the Property. The Project shall at all times be managed by a Management Agent reasonably acceptable to Authority (on behalf of the Authority and the City), with demonstrated ability to operate residential rental facilities similar to the Project in a manner that will provide decent, safe, and sanitary housing. For the purposes hereof, if Owner directly performs the functions of the Management Agent by its employees or by means of a service contract with an entity which is a partner or an affiliate of a partner in Owner, such Management Agent shall be deemed approved by Authority (on behalf of the Authority and the City). If the Management Agent is an entity or person other than Owner, its employees, a partner in Owner or an entity owned or controlled by Owner or which owns and/or controls Owner, Owner shall submit for Authority's approval (on behalf of the Authority and the City) 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 Authority. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, Authority (on behalf of the Authority and the City) shall approve the proposed Management Agent by notifying Owner in writing within thirty (30) Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
E-18
Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
days following Owner's written request for such approval. Unless the proposed Management Agent is disapproved by Authority within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved. The Authority (on behalf of the Authority and the City) hereby approves Advanced Property Services Management, Inc., as the initial property manager.
11.2. Authority Rights. If Owner directly performs the functions of the Management Agent by its employees or by means of a service contract with an entity which is a partner or an affiliate of a partner in Owner and the Authority determines Owner has not met its management responsibilities, Authority shall have the right to enter the Project, to review relevant documentation to determine if Owner is acting in a reasonable manner and to require Owner to hire a third party management company acceptable to the Authority (on behalf of the Authority and the City).
11.3. Insurance.
11.3.1. Required Insurance. Owner shall maintain, to protect Authority Parties and City Parties against all insurable Claims resulting from the actions of Owner in connection with this Regulatory Agreement, the Property and the Project, at the sole cost and expense of Owner during the Term hereof the following insurance (or its then reasonably available equivalent): (a) Liability Insurance; (b) Automobile Liability Insurance to the extent required by this Regulatory Agreement; (c) Property Insurance; and (d) Workers Compensation Insurance.
Owner shall require all subcontractors to maintain the same insurance required of Owner set forth in this Section 11.3 prior to performing any work on the Property or the Project.
11.3.2. Policy Requirements and Endorsements. All insurance policies required by this Regulatory Agreement shall contain (by endorsement or otherwise) the following provisions:
(a) Insured. Owner's Liability Insurance and Automobile Liability Insurance policies shall name Authority Parties and City Parties as "additional insured." Owner's Property Insurance policy shall name each of Authority and City as a "loss payee." The coverage afforded to Authority Parties and City Parties shall be at least as broad as that afforded to Owner regarding the Property and the Project and may not contain any terms, conditions, exclusions, or limitations applicable to Authority Parties and City Parties that do not apply to Owner. (b) Primary Coverage. Any insurance or self-insurance maintained by Authority Parties and City Parties shall be in excess of all insurance required under this Regulatory Agreement and shall not contribute to any insurance required under this Regulatory Agreement.
(c) Contractual Liability. Owner's Liability Insurance policy shall contain contractual liability coverage for Owner's indemnity obligations under this Regulatory Agreement. Owner's obtaining or failure to obtain such contractual liability coverage shall not Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
relieve Owner from nor satisfy any indemnity obligation of Owner under this Regulatory Agreement.
(d) Deliveries to Authority. Owner shall deliver to Authority (on behalf of Authority and City) evidence of all insurance policies required by this Regulatory Agreement. No later than three (3) days before any insurance required by this Regulatory Agreement expires, is cancelled or its liability limits are reduced or exhausted, Owner shall deliver to Authority (on behalf of Authority and City) evidence of Owner's maintenance of all insurance this Regulatory Agreement requires. Each insurance policy required by this Regulatory Agreement shall be endorsed to state that coverage shall not be cancelled, suspended, voided, reduced in coverage or in limits, except after thirty (30) calendar days' advance written notice of such action has been given to Authority (on behalf of Authority and City) by certified mail, return receipt requested; provided that if a thirty (30) days' notice of cancellation endorsement is not available Owner shall notify Authority (on behalf of Authority and City) of this unavailability in writing and shall forward any notice of cancellation to the Authority (on behalf of Authority and City) within two (2) business days from date of receipt by Owner; and further provided, however, that only ten (10) days' advance written notice shall be required for any such action arising from non-payment of the premium for the insurance. 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, to the extent commercially available, in the cancellation wording of any certificates or policies of insurance applicable to Authority Parties and City Parties pursuant to this Regulatory Agreement. (e) Waiver of Certain Claims. Owner shall cause each insurance carrier providing insurance coverage under this Regulatory Agreement to endorse their applicable policy(ies) with a Waiver of Subrogation with respect to Authority Parties and City Parties, if not already in the policy. To the extent that Owner obtains insurance with a Waiver of Subrogation, the Parties release each other, and their respective authorized representatives, from any Claims for damage to any Person or property to the extent such Claims are paid by such insurance policies obtained pursuant to and in satisfaction of the provisions of this Agreement. (f) No Claims Made Coverage. None of the insurance coverage required under this Regulatory Agreement may be written on a claims-made basis.
11.3.3. Fully Paid and Non-Assessable. All insurance obtained and maintained by Owner pursuant to this Section 11.3 shall be fully paid for and non-assessable. However, such insurance policies may be subject to insurer audits.
11.3.4. Authority and City Option to Obtain Coverage. During the continuance of an Event of Default arising from the failure of Owner to carry any insurance required by this Regulatory Agreement, Authority and City each may, at its sole option, purchase any such required insurance coverage and Authority and City, respectively, shall be entitled to immediate payment from Owner of any premiums and associated reasonable costs paid by Authority or City, respectively, for such insurance coverage. Any amount becoming due and payable to Authority or City under this Section 11.3.4 that is not paid within fifteen (15) calendar days after Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
E-20
Exhibit “E”
Regulatory Agreement
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JAMIER\01200.20009\10270109.25
written demand from Authority or City for payment of such amount, within an explanation of the amounts demanded, will bear interest from the date of the demand at the rate of eight percent (8%) per annum or the maximum interest rate allowed by applicable law, whichever is less. Any election by Authority or City to purchase or not to purchase insurance otherwise required by the terms of this Regulatory Agreement to be carried by Owner shall not relieve Owner of its obligation to obtain and maintain any insurance coverage required by this Regulatory Agreement.
11.3.5. Separation of Insured. Owner's Liability Insurance and Automobile Liability Insurance policies shall provide for separation of insured for Owner and the Authority and City Parties. Insurance policies obtained in satisfaction of or in accordance with the requirements of this Regulatory Agreement may provide a cross-suits exclusion for suits between named insured Persons, but shall not exclude suits between named insured Persons and additional insured Persons.
11.3.6. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions under insurance policies required by this Regulatory Agreement shall be declared to and approved by Authority (on behalf of Authority and City). Owner shall pay all such deductibles or self-insured retentions regarding Authority Parties and City Parties or, alternatively, the insurer under each insurance policy required by this Section 11.3 shall eliminate such deductibles or self-insured retentions with respect to Authority Parties.
11.3.7. No Separate Insurance. Owner shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Regulatory Agreement, unless Authority and City are each made an additional insured thereon, as required by this Regulatory Agreement.
11.3.8. Insurance Independent of Indemnification. The insurance requirements of this Regulatory Agreement are independent of Owner indemnification and other obligations under this Regulatory Agreement and shall not be construed or interpreted in any way to satisfy, restrict, limit, or modify Owner's indemnification or other obligations or to limit Owner's liability under this Regulatory Agreement, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall the provision of such insurance preclude Authority or City from taking such other actions as are available to it under any other provision of this Regulatory Agreement or otherwise at law or in equity.
11.3.9. Nature of Insurance. The policies of insurance required by this Regulatory Agreement shall be issued by carriers that: (a) are listed in the then current "Best's Key Rating Guide—Property/Casualty—United States & Canada" publication (or its equivalent, if such publication ceases to be published) with a minimum financial strength rating of "A-" and a minimum financial size category of "XI" (exception may be made for the California Compensation Insurance Fund when not specifically rated); and (b) are authorized to do business in California. Owner may provide any insurance under a "blanket" or "umbrella" insurance policy, provided that: (i) such policy or a certificate of such policy shall specify the amount(s) of Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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the total insurance allocated to the Property and the Project, which amount(s) shall equal or exceed the amount(s) required by this Regulatory Agreement; and (ii) such policy otherwise complies with this Regulatory Agreement.
12. Maintenance of the Project. Owner, for itself, its successors and assigns, hereby covenants and agrees that the Project, including, without limitation those areas that are subject to public view (e.g.: all improvements, paving, walkways, landscaping, and ornamentation) shall be maintained in good repair and in 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 of the Project in contravention of the general maintenance standard described above ("Maintenance Deficiency"), then Authority (on behalf of Authority and City) shall notify Owner in writing of the Maintenance Deficiency and give Owner thirty (30) calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. "Maintenance Deficiency" includes, without limitation, the following inadequate or nonconforming property maintenance conditions and/or breaches of residential property use restrictions: (i) failure to properly maintain the windows, structural elements, and painted exterior surface areas of the units in a clean and presentable manner; (ii) failure to keep the common areas of the project free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the Property; (iii) failure to regularly maintain, replace and renew the landscaping in a reasonable condition free of weed and debris; and (iv) 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.
12.1. In the event Owner fails to cure or commence to cure the Maintenance Deficiency within the time allowed, Authority (on behalf of Authority and City) may thereafter conduct a hearing following transmittal of written notice thereof to Owner ten (10) calendar days prior to the scheduled date of such hearing in order to verify whether a Maintenance Deficiency exists and whether Owner has failed to comply with the provision of this Section 12. If, upon the conclusion of the hearing, Authority makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, as described above, then Authority (on behalf of Authority and City) shall have the right to enter the Project and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or equity that Authority may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by Authority for the abatement of a Maintenance Deficiency as authorized by this Section 12.1 shall become a lien on the Project. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by Authority to Owner, Authority shall have the right to enforce the lien in the manner as provided in Section
12.3. 12.2. Graffiti which is visible from any public right-of-way which is adjacent or contiguous to the Project shall be removed by Owner 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 Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the Project and thereafter such graffiti is not removed within seventy-two (72) hours following the time of its application, or Owner's actual knowledge of its existence, whichever occurs later; then in such event and without notice to Owner, Authority (on behalf of Authority and City) shall have the right to enter the Project and remove the graffiti. Notwithstanding any provision of the Regulatory Agreement to the contrary, any sum expended by Authority for the removal of graffiti from the Project as authorized by this Section 12.2 shall become a lien on the Project. If the amount of the lien is not paid within thirty (30) calendar days after written demand for payment by Authority to Owner, Authority shall have the right to enforce its lien in the manner as provided in Section 12.3.
12.3. The parties hereto further mutually understand and agree that the rights conferred upon Authority under this Section 12 expressly include the power to establish and enforce a lien or other encumbrance against the Property in the manner provided under California Civil Code Sections 2924, 2924b and 2924c, as such sections may be amended or superseded, in the amount as reasonably necessary to restore the Project to the maintenance standards required under this Section 12, including attorneys fees and costs of Authority associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of Authority in connection with such action. In any legal proceeding for enforcing such a lien against the Project, the prevailing party shall be entitled to recover its attorneys' fees and costs of suit. The provisions of this Section 12 shall be a covenant running with the land for the Term and shall be enforceable by Authority (on behalf of Authority and City) in its discretion, cumulative with any other rights or powers granted to Authority under applicable law. Nothing in the foregoing provisions of this Section 12 shall be deemed to preclude Owner from making any alterations, additions, or other changes to any structure or improvement or landscaping on the Project, provided that such changes comply with the zoning and development regulations of the City and other applicable law.
12.4. Capital Replacement Reserve Account. Owner shall establish an account for the payment of repair and replacement of capital items ("Capital Replacement Reserve Account") in an initial amount as required by the Institutional Lenders for the Project or the investor limited partner of the Owner. Each year thereafter, Owner shall deposit into the Capital Reserve Replacement Account additional amounts as required by the Institutional Lenders for the Project or the investor limited partner of the Owner, but not less than Three Hundred Dollars ($300) per Unit per year.
12.4.1. Capital Repairs and Replacements. Capital repairs and replacements shall include, but not be limited to, the following that are provided on a Project-wide basis or a significant portion of the Project as reasonably determined by the Authority Executive Director:
wet and dry utilities; roof repair and replacement as necessary; repair and replacement of boilers and the major operating components thereof; stucco repair and replacement; exterior painting; replacement of carpeting and vinyl or other hard surface flooring; replacement of drapes or other window coverings; replacement of dishwashers, garbage disposals and other interior appliances; repair and replacement of heating, ventilating and air conditioning systems, equipment and Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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components; replacement of light fixtures, replacement of cabinetry, and installation of solar panels. All of the foregoing and other similar expenditures on the Project shall be considered to be qualifying capital repair and replacement expenses. Interior painting and servicing, repair or replacement of interior hardware shall not be considered to be a capital repair, but shall be ordinary operating expenses for the Project. Owner shall withdraw funds from the Capital Replacement Reserve Account to pay such capital repair and replacement expenses as Owner may deem necessary for the purposes of meeting the maintenance and replacement obligations described herein.
12.4.2. Insured Depository. The Capital Replacement Reserve Account shall be maintained in a depository insured by an agency of the federal government.
12.4.3. Documentation. Annually, or more frequently at Authority's request (on behalf of Authority and City), Owner shall document the level of capital repairs and replacements for the preceding period. Owner shall maintain and shall provide as requested documentation showing the quantity and price of items purchased, price of materials and the cost of contracted labor or other services incurred in connection with such capital repair and replacement, and such other items as Authority may reasonably request.
12.4.4. Withdrawals from Reserve Account. On an annual basis, Owner shall notify Authority of the anticipated cash requirements which will need to be withdrawn from the Capital Replacement Reserve Account. Amounts so budgeted and approved by Authority (on behalf of Authority and City) may be withdrawn by Owner from the indicated Capital Replacement Reserve Account without further Authority or City approval. Other withdrawals for unbudgeted, unanticipated or emergency Project expenditures may be withdrawn by Owner without prior Authority or City approval, but Owner shall notify Authority (on behalf of Authority and City) in writing within ten (10) calendar days after withdrawal. All amounts so withdrawn by Owner shall be expended on the Project and in accordance with this Regulatory Agreement. Withdrawals in excess of Twenty-Five Thousand Dollars ($25,000) in any one calendar year shall be pre-approved by Authority (on behalf of Authority and City) in its reasonable discretion, subject to the rights of any Senior Lenders or the investor limited partner of the Owner.
12.4.5. Interest Earned on Funds in the Capital Replacement Reserve Account.
Any interest or other earnings from sums deposited into the Capital Replacement Reserve Account shall be retained in and added to the balance in said account.
12.4.6. Capital Needs Assessment. Owner shall deliver to Authority (on behalf of Authority and City), for the Authority's reasonable review and approval, a capital needs assessment ("CNA") every ten (10) years after the date of the Certificate of Completion for the Project. The CNA shall include an analysis of Owner's actual expenditures for capital needs compared to the most recently approved CNA, Owner's original operating budget and its thencurrent operating budget. Each CNA shall include a ten (10) year capital needs assessment or analysis of replacement reserve requirements prepared by a qualified third party in accordance with reasonable and customary standards for similar residential rental projects.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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12.4.7. Displacement of Residents and Relocation. Owner shall make best efforts to conduct capital repairs and replacements and ordinary repair and maintenance (collectively, "Repairs") in good faith and in a manner that does not result in the displacement of any of the residents of the Units. If any of Owner's actions to conduct Repairs result in displacement of any of the Units' residents, Owner shall notify the Authority (on behalf of Authority and City) in writing, prior to conducting such Repairs, of the identities of the residents to be displaced, the Units they will be displaced from, and the estimated length of time such residents shall be displaced. If the displacement of the residents triggers relocation obligations, Owner shall be responsible, at its sole cost and expense, for any and all such relocation obligations and related expenses. Owner shall comply with all applicable federal, state and local laws, rules and regulations regarding such relocation obligations and related expenses, including any relocation requirements set forth by the Authority (on behalf of Authority and City). Owner shall defend, indemnify and hold harmless the Authority Parties and the City Parties from and against all liability for any relocation obligations and related expenses attributable to any Repairs.
13. Covenants to Run With the Land. Owner, City and Authority 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 within the territorial jurisdiction(s) of the Authority and the City and that each shall be deemed covenants running with the land and shall pass to and be binding upon the Property and each successor-in-interest of Owner in the Property for the Term. Owner hereby expressly assumes the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in this Regulatory Agreement. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property 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.
14. Burden and Benefit. The Authority, City and Owner hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Owner's legal interest in the Property is affected by the affordable dwelling use and occupancy covenants hereunder. The Authority, City and 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 Property by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the affordable housing goals and objectives of the Authority and City and in order to make the Property available for acquisition by Owner.
15. Defaults.
15.1. Events of Default. The occurrence of any of the following is a default and shall constitute a material breach of this Regulatory Agreement and, if not corrected, cured or remedied in the time period set forth in Section 15.2, shall constitute an "Event of Default" hereunder:
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Exhibit “E”
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15.1.1. failure of 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 Regulatory Agreement;
15.1.2. any warranty, representation or statement made or furnished to Authority and City by Owner under this Regulatory Agreement that is false or misleading in any material respect either now or at the time made or furnished;
15.1.3. the dissolution or termination of the existence of Owner as an ongoing business, insolvency, appointment of a receiver for any part of the Property of Owner, 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 Owner; or
15.1.4. a Default pursuant to the Affordable Housing Agreement.
15.2. Notice of Default. Authority (on behalf of Authority and City) shall give written notice of default to Owner, in accordance with Section 22, stating that such notice is a "Notice of Default", specifying the default complained of by Authority (on behalf of Authority and City) and requiring the default to be remedied within thirty (30) calendar days of the date of the Notice of Default. Except as required to protect against further material damage, Authority (on behalf of Authority and City) may not institute legal proceedings against Owner until thirty (30) calendar days after providing the Notice of Default. Failure or delay in giving a Notice of Default 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) calendar days, and if Owner initiates corrective action within said thirty (30) calendar day period and diligently works to effect a cure as soon as possible, then Owner may have such additional time as authorized in writing by Authority (on behalf of Authority and City) as reasonably necessary to complete the cure of the default 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, conditioned or delayed. The Authority (on behalf of Authority and City) shall give the investor limited partner in the Owner the following notice and cure rights:
15.2.1. The Authority will give the limited partner a copy of any Notice (at the limited partner's address provided in a Notice by Owner to the Authority) that the Authority gives to the Developer under this Agreement, provided that Developer has provided the address and contact information for the investor limited partner in writing to the Authority;
15.2.2. The Authority will give the limited partner thirty (30) days after the limited partner's receipt of such Notice to cure a non-payment of any sum due under this Agreement;
15.2.3. The Authority will give the limited partner sixty (60) days after the limited partner's receipt of such Notice to cure any other default under this Agreement; Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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15.2.4. If a non-monetary default is incapable of being cured within sixty (60) days, the Authority will give the limited partner an additional ninety (90) days to cure such default provided the limited partner has commenced to cure such default and is diligently proceeding to cure such default through the end of such period; and
15.2.5. If the limited partner makes any such payment or otherwise cures such default, the Authority will accept such action as curing such default as if such payment or cure were made by the Owner.
If Owner fails to take corrective action relating to a default within thirty (30) calendar days following the date of Notice of Default (or to complete the cure within the additional as may be authorized by Authority (on behalf of Authority and City) or set forth above for the limited partner of Owner), an Event of Default shall be deemed to have occurred.
15.3. Inaction Not a Waiver of Default. Any failure or delays by Authority (on behalf of Authority and City) 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 Authority (on behalf of Authority and City) in asserting any of its rights and remedies shall not deprive Authority (on behalf of Authority and 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.
16. Remedies. Upon the occurrence of an Event of Default, Authority (on behalf of Authority and City) shall, in addition to the remedial provisions of Section 12 as related to a Maintenance Deficiency at the Property, 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 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 Authority or City; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and Agreements of Owner to Authority and City.
16.1. Rights and Remedies are Cumulative. The rights and remedies of Authority (on behalf of Authority and City) as set forth in this Section 16 are cumulative and the exercise by Authority (on behalf of Authority and 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 Owner.
16.2. Enforcement by Third Parties. No third party shall have any right or power to enforce any provision of this Regulatory Agreement on behalf of Authority or City or to compel Authority or City to enforce any provision of this Regulatory Agreement against Owner or the Project.
17. Governing Law. This Regulatory Agreement shall be governed by the laws of the State of California and applicable federal laws, without regard to its conflicts of laws principles.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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18. Amendment. This Regulatory Agreement may be amended after its recordation only by a written instrument executed by Owner, City and Authority.
19. Attorney's Fees. In the event that a party to this Regulatory Agreement brings an action to enforce any condition or covenant, representation or warranty in this Regulatory Agreement or otherwise arising out of this Regulatory Agreement, the prevailing party(ies) in such action shall be entitled to recover from the other party reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit. for the purposes of this Section 19, the words "reasonable attorneys' fees," in the case of Authority and City, shall include the salaries, costs and overhead of the Authority general counsel and City Attorney as well as any other legal counsel hired by the Authority or City in such action, as allocated on an hourly basis.
20. Severability. If any provision of this 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 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.
21. Time is of the Essence. For each provision of this 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.
22. Notices, Demands and Communications Between the Parties. Any and all Notices submitted by any Party to another Party pursuant to or as required by this Agreement shall be dispatched by messenger for immediate personal delivery, by registered or certified United States mail, postage prepaid, return receipt requested, to the address of the Party, as set forth in this Section, or by email at the email address of the Party set forth in this Section. Such Notice may be sent in the same manner to such other addresses as any Party may from time to time designate by Notice. Notices shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail, as provided in this Section. Notices transmitted by electronic mail transmission shall be deemed delivered upon being sent, but only if no message of unavailability or undeliverability is received by the sending Party. Rejection, other refusal to accept or the inability to deliver any Notice because of a changed address of which no Notice was given or other action by a Person to whom Notice is sent, shall be deemed receipt of the Notice.
The following are the authorized addresses for the submission of Notices to the Parties, as of the Effective Date:
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To Owner: Second Street Family LP
414 E. Chapman Avenue
Orange, CA 92866
Attn: OHDC Second Street Family LLC
Email: [email protected]
With copies to: C&C Second Street Family LLC
14211 Yorba Street, Suite 200
Tustin, CA 92780
Attn: Todd Cottle
Email: [email protected]
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, CA 94612
Attn: Lynn Hutchins
Email: [email protected]
To Authority: City of Corona Housing Authority
400 S. Vicentia Avenue
Corona, CA 92882
Attn: Authority Executive Director
Email: [email protected]
With a courtesy copy to: City of Corona Housing Authority 400 S. Vicentia Avenue
Corona, CA 92882
Attn: Authority General Counsel
Email: [email protected]
23. Recording. The parties hereto shall cause this Regulatory Agreement to be recorded in the official records of the County of Riverside.
24. No Third Party Beneficiary. No claim as a third-party beneficiary under this Regulatory Agreement by any person, corporation or any other entity, shall be made or be valid against the Authority or Owner.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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25. Prohibition Against Transfer.
25.1. Except as expressly provided in the Affordable Housing Agreement, Owner shall not, without prior written approval of Authority (on behalf of Authority and City), which may not be unreasonably withheld, delayed or conditioned: (i) assign or attempt to assign this Regulatory Agreement or any right herein; or (ii) make any total or partial sale, transfer, conveyance, lease, leaseback, or assignment of the whole or any part of the Property or the improvements thereon, with the exception of leases of the residential units as permitted by this Regulatory Agreement, or permit to be placed on any of the Property any unauthorized mortgage, trust deed, deed of trust, encumbrance or lien.
25.2. In the absence of specific written agreement or approval by Authority (on behalf of Authority and City), no unauthorized sale, transfer, conveyance, lease, leaseback or assignment of the Property shall be deemed to relieve Owner or any other party from any obligations under this Regulatory Agreement.
26. City Delegation to Authority. Except as otherwise specifically provided in this Agreement and except for actions that may increase costs to the City, for ease of administration of this Agreement, the City delegates to the Authority the authority to administer this Agreement on behalf of the City and authorizes the Authority Executive Director to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments to this Agreement and execute documents on behalf of the City. To the extent the authority to administer this Agreement is not delegated by the City to the Authority, the City Manager shall have the authority to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments to this Agreement and execute documents on behalf of the City so long as such actions do not materially or substantially change the number of the Qualifying Units, the affordability of the Qualifying Units, reduce the length of affordability of the Qualifying Units, or add to the costs incurred or to be incurred by City as specified herein. The City Manager reserves the right, in his or her sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the City Council if the City Manager determines or believes that such action could increase the risk, liability or costs to City, or change the affordability covenants or reduce the length of affordability of the Project.
27. Authority Approvals and Actions. The Authority Executive Director shall have the authority to make approvals, issue interpretations, waive provisions, grant extensions of time, approve amendments to this Agreement and execute documents on behalf of the Authority and the City (to the extent not provided otherwise in this Agreement), including, without limitation, any documents necessary to implement any changes in the number or affordability of the Qualifying Units, as may be required by TCAC, so long as such actions do not reduce the length of affordability of the Qualifying Units or add to the costs incurred or to be incurred by Authority or City as specified herein. The Authority Executive Director reserves the right, in his or her sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the Board of the Authority if the Authority Executive Director determines or believes that such action could increase the risk, liability or costs to Authority, or reduce the length of affordability of the Project.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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IN WITNESS WHEREOF, Owner, Authority and City have caused this 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.
[Signatures on following pages]
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AUTHORITY AND CITY SIGNATURE PAGE
TO
REGULATORY AGREEMENT
(Corona Second Street Family Apartments)
AUTHORITY:
CITY OF CORONA HOUSING AUTHORITY,
a public body, corporate and politic, organized under the laws of the State of California, By: Date:
Jacob Ellis
Executive Director
ATTEST:
Authority Secretary
CITY:
CITY OF CORONA,
a California municipal corporation
By: Date:
Jacob Ellis
City Manager
ATTEST:
City Clerk
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
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Exhibit “E”
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OWNER SIGNATURE PAGE
TO
REGULATORY AGREEMENT
(Corona Second Street Family Apartments)
OWNER:
SECOND STREET FAMILY LP, a California limited partnership By: OHDC Second Street Family LLC,
a California limited liability company,
its managing general partner
By: Orange Housing Development Corporation,
a California nonprofit corporation,
its sole member and manager
By: ____________________________________
Eunice Bobert, Chief Executive Officer
By: C&C Second Street Family LLC,
a California limited liability company,
its developer general partner
By: C&C Development Co., LLC,
a California limited liability company,
its sole member and manager
By: ____________________________________
Todd R. Cottle, Trustee of the 2007 Todd R.
Cottle and Jennifer N. Cottle Revocable Trust
its member
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
ATTACHMENT NO. 1
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ATTACHMENT NO. 1
TO
REGULATORY AGREEMENT
(Corona Second Street Family Apartments)
Property Legal Description
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
[To be inserted after recordation of LLA]
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
ATTACHMENT NO. 2
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ATTACHMENT NO. 2
TO
REGULATORY AGREEMENT
(Corona Second Street Family Apartments)
Certification of Tenant Eligibility
NOTE TO PROPERTY OWNER: This form is designed to assist you in computing Annual Income in accordance with the method set forth in the United States Department of Housing and Urban Development ("HUD") Regulations (24 CFR 813). You should make certain that this form is at all times up-to-date with the HUD Regulations.
Re: _Second Street Family Apartments, Corona, California I/We, the undersigned, state that I/we have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the property listed above. Listed below are the names of all persons who intend to reside in the unit:
1. 2. 3. 4. 5.
Names of
Members of
Household
Relationship
to Head of
Household Age
Social
Security
Number
Place of
Employment
6. Head of Household (check one):
Mother: ____
Father: ____
Other: _____________ (specify relationship – i.e. legal guardian, sister, brother, etc.) Income Computation
7. The total anticipated income, calculated in accordance with the provisions of this Section 7, of all persons over the age of 18 years listed above for the 12-month period beginning the date that I/we plan to move into a unit is $ ____________________.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
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Included in the total anticipated income listed above are:
(a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets); (c) interest and dividends (including income from assets excluded below); (d) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of period receipts, including any lump sum payment for the delayed start of a periodic payment; (e) payments in lieu of earnings, such as unemployment and disability compensation, workmen's compensation and severance pay;
(f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (i) any earned income tax credit to the extent that it exceeds income tax liability.
Excluded from such anticipated income are:
(a) casual, sporadic or irregular gifts;
(b) amounts which are specifically for or in reimbursement of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen's compensation), capital gains and settlement for personal or property losses;
(d) amounts of educational scholarship paid directly to the student of the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes, are to be included in income; (e) special pay to a household member who is away from home and exposed to hostile fire;
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
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(f) relocation payments under Title 11 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
(g) foster child care payments;
(h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977;
(i) payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act. (j) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes;
(k) payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program;
(l) payments received from the Job Training Partnership Act; (m) the first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Court of Claims.
8. Do the persons whose income or contributions are included in item 6 above:
(a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? ___ Yes ____ No; or (b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale) during the last two years at less than fair market value? ___Yes ___No (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than $5,000? ___Yes ___No (d) If the answer to (c) is yes, state:
(i) the amount of income expected to be derived from such assets in the 12- month period beginning on the date of initial occupancy in the unit that you propose to rent:
$______; and
(ii) the amount of such income, if any, that was included in item 6 above:
$______
9. (a) Are all of the individuals who propose to reside in the unit full-time students*? ____Yes ____No
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
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*A full-time student is an individual enrolled as a full-time student during each of five calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional or farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is at least one of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? ____Yes ____No
10. Neither myself nor any other occupant of the unit I/we propose to rent is the owner of the property in which the unit is located (hereinafter the "Owner"), has any family relationship to the Owner or owns, directly or indirectly, any interest in the ownership. For purposes of this section, indirect ownership by an individual shall mean ownership by a family member, ownership by a corporation, partnership, estate or trust in proportion to the ownership or beneficial interest in such corporation, partnership, estate or trust held by the individual or a family member, and ownership, direct or indirect, by a partner of the individual.
11. This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, correct and complete and, based upon information I/we deem reliable and that the statement of total anticipated income contained in Section 7 is reasonable and based upon such investigation as the undersigned deemed necessary.
12. I/we will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either an income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding calendar year.
13. I/we acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our agreement with the Owner to lease the units and will entitle the Owner to prevent or terminate my/our occupancy of the unit by institution of an action for eviction or other appropriate proceedings.
14. I/we acknowledge that all of the individuals who propose to reside in the unit qualify as either a United States citizen, United States non-citizen national or a qualified alien (as that term is defined in 8 U.S.C § 1641, as amended from time to time, or any successor statute).
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
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15. Housing Issuer Statistical Information (will be used for reporting purposes only):
Marital Status: _____________________________
Head of Household: _________________________
Head of Household (Race):
White ________ Asian ________ Hispanic ________
African-American ________ Native American ________ Other ________ Physical Disability: Yes ________ No ________
I/we declare under penalty of perjury that the foregoing is true and correct.
Executed this ________ day of__________, ____ in the County of Riverside, California. ____________________________________
Applicant
____________________________________
Applicant
[Signature of all persons over the age of 18 years listed in number 2 above required] Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
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FOR COMPLETION BY PROPERTY OWNER ONLY:
1. Calculation of eligible income:
(a) Enter amount entered for entire household in 6 above: $______________ (b) (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance ($_______________);
(2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook savings ($________), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance
(3) Enter at right the greater of the amount calculated under (1) or (2) above:
$_____________;
(c) TOTAL ELIGIBLE INCOME
(Line l(a) plus line 1(b)(3): $________________
2. The amount entered in l(c):
_____ Qualifies the applicant(s) as a Qualified Household. _____ Does not qualify the applicant(s) as Qualified Household.
3. Apartment unit assigned:
Bedroom Size: ______ Rent: $________
4. This apartment unit [was/was not] last occupied for a period of 31 consecutive days by persons whose aggregate anticipated annual income, as certified in the above manner upon their initial occupancy of the apartment unit, qualified them as a Qualified Household.
5. Method used to verify applicant(s) income:
_____ Employer income verification.
_____ Copies of tax returns.
_____ Other (_____________________)
_________________________________
Manager
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
ATTACHMENT NO. 2
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The undersigned employee has applied for a rental unit located in a project financed in part by the Authority of Corona for persons of very low income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis.
Annual wages ________ Overtime ________ Bonuses ________ Commissions ________
Total current income ____________
I hereby certify that the statements above are true and complete to the best of my knowledge. _____________________________ _______________ ______________________________ Signature Date Title
I hereby grant you permission to disclose my income to ____________________________ in order that they may determine my income eligibility for rental of an apartment at [_____________________].
_____________________________ _______________
Signature Date
Please send to: ________________________________________ ________________________________________
________________________________________
I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge.
_____________________________ _______________
Signature Date
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
ATTACHMENT NO. 3
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ATTACHMENT NO. 3
TO
REGULATORY AGREEMENT
(Corona Second Street Family Apartments)
Certificate of Continuing Program Compliance
For Annual Reporting Period Ending
The undersigned, _______________, as the authorized representative of Second Street Family LP, a California limited partnership ("Owner"), has read and is thoroughly familiar with the provisions of the various documents associated with the financial assistance provided by the Housing Authority of the Authority of Corona ("Housing Authority"), Authority of Corona ("Authority"), as established in numerous documents including the Regulatory Agreement, dated as of _____________ among Owner, Authority and Authority.
As of the date of this Certificate, the following percentage of residential units in the project are (i) occupied by Qualified Households (as such term is defined in the Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Qualified Household vacated such unit, as indicated:
Number of Units occupied by Qualified Households: ________________ Number of Vacant Units: ________________
Number of Qualified Households who commenced
occupancy during the preceding reporting period: ________________
Attached is a separate sheet ("Occupancy Summary") listing, among other items, the appropriate information for each residential unit in the Project, the occupants of each unit and the rent paid for each unit. The information contained thereon is true and accurate and reasonable and is Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
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based on information submitted to the owner and is certified under penalty of perjury by each tenant.
[Signatures on following page]
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
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The undersigned hereby certifies that (1) a review of the activities of Owner during such reporting period and of Owner's performance under the Regulatory Agreement has been made under the supervision of the undersigned; and (2) to the best of the knowledge of the undersigned, based on the review described in clause (1) hereof, Owner is not in default under any of the terms and provisions of the above documents.
Dated:______________________ OWNER
____________________________________
Name:_______________________________
Its: _________________________________
____________________________________
Name:_______________________________
Its: _________________________________
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
EXHIBIT E
ATTACHMENT NO. 3
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OCCUPANCY SUMMARY
Total Number of Units in the Project: ___________
Total Units occupied by Qualified Households: ___________ Total Units available for rent to Qualified Households: ___________ ATTACHED IS THE FOLLOWING INFORMATION:
A. Resident and rental information on each occupied apartment in the complex.
B. Certification of Tenant Eligibility for all Qualified Households who have moved into ________________, Corona, California, since the filing of the last Occupancy Summary. The same are true and correct to the best of the undersigned's knowledge and belief.
Dated:______________________ OWNER
____________________________________
Name:_______________________________
Its: _________________________________
____________________________________
Name:_______________________________
Its: _________________________________
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-1
Exhibit “F”
Land Note
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EXHIBIT "F"
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
LAND NOTE
[SEE ATTACHED SEVEN (7) PAGES]
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-2
Exhibit “F”
Land Note
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AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT
LAND PROMISSORY NOTE SECURED BY DEED OF TRUST
(Corona Second Street Family Apartments)
Principal Amount: $________.00 Date of Note: , 202__
Maker: SECOND STREET FAMILY
LP, a California limited partnership
Lender: CITY OF CORONA HOUSING
AUTHORITY, a public body, corporate and
politic, organized under the laws of the State of
California; and
CITY OF CORONA, a California municipal
corporation
Maturity Date: Interest Rate: One- Percent (1%)
1. Housing Authority Land Loan.
FOR VALUE RECEIVED, the undersigned, Second Street Family LP, a California limited partnership ("Maker"), with its principal place of business located at 414 E. Chapman Avenue, Orange, CA 92866, promises to pay to the CITY OF CORONA HOUSING AUTHORITY, a public body, corporate and politic, organized under the laws of the State of California, a municipal corporation ("Authority") and the CITY OF CORONA, a California municipal corporation (“City" and collectively with the Authority “Holder”) at 400 S. Vicentia Avenue, Corona, California, 92882, or such place as the Holder may, from time to time, designate by written notice to the Maker, the principal sum of ____________ DOLLARS ($______) (the "Land Loan"), together with any accrued interest, if applicable, as set forth in this Promissory Note. This Promissory Note (the "Note") is made and given pursuant to that certain Affordable Housing Disposition and Development Agreement among the Authority, the City of Corona, a California municipal corporation and Maker, dated August 21, 2024 (the "Affordable Housing Agreement"). The Affordable Housing Agreement is incorporated herein by this reference. All initially capitalized terms used but not defined herein shall have the meanings given to them in the Affordable Housing Agreement. The Land Loan is made for the conveyance of the Property by Authority to Maker in accordance with the terms and conditions of the Affordable Housing Agreement.
2. Term of Loan and Right of Prepayment.
a. Maturity Date. All accrued interest, if any, and principal shall be due and payable in full without any further demand or notice fifty-five (55) years from the date on which the Certificate of Completion is issued ("Maturity Date").
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-3
Exhibit “F”
Land Note
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b. Prepayment. This Note may be prepaid in whole or in part at any time and from time to time without penalty or premium.
3. Security for Note.
This Note is secured by a Deed of Trust executed by Maker which creates a lien on that certain real property as described therein and in the Affordable Housing Agreement.
4. Interest Calculation.
The principal outstanding under this Note shall accrue simple interest at the rate of one percent (1%) per annum, except in the case of Default as set forth in Section 9 of this Note.
Principal and interest shall be payable in lawful money of the United States of America. If applicable, interest shall be computed based on an actual day year and the actual number of days elapsed. Interest shall commence on amounts disbursed hereunder from the date of disbursement.
5. Annual Payment.
Following completion of the Project as evidenced by the issuance by the City of a Certificate of Occupancy as defined in Section 111.2 of the California Building Code, 2013 Municipal Code, and continuing each year thereafter until the Maturity Date, a portion of the Residual Receipts (as defined below) from the Project shall be paid to Holders and applied to pay down the amounts due and owing under this Note. The payments described below shall be paid to Holder no later than April 1 each year, with the first payment due on the April 1 following the issuance of a Certificate of Occupancy for the Project, and continuing each year thereafter. a. Annual Payments from Residual Receipts. After the Fee Deferral Note and the HOME-ARP Note have been paid in full, Maker shall make repayments of the outstanding principal and accrued interest of this Note, if any, as follows:
(i) an amount equal to the product of thirty percent (30%) times Fifty Percent (50%) of the Residual Receipts from the Project shall be paid to the City as repayment of amounts due and owing under this Note; and
(ii) an amount equal to the product of seventy percent (70%) times Fifty Percent (50%) of the Residual Receipts from the Project shall be paid to the Authority as repayment of amounts due and owing under this Note.
Such annual payments shall be accompanied by the Maker's report of Residual Receipts. The Maker shall provide the Holder with the audited financial statement provided for in Section 6, and any other documentation reasonably requested by Holder to substantiate the Maker's determination of Residual Receipts.
All payments made hereunder shall be credited first to any accrued but unpaid interest (if applicable), then to current interest due and owing and lastly to principal. Interest not Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-4
Exhibit “F”
Land Note
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paid current each year shall be added to and thereafter be considered additional principal due hereunder.
Notwithstanding the foregoing, the entire outstanding balance of principal and any interest owing under this Note shall be due and payable in full fifty-five (55) years from the date hereof.
Prior to any sale of all or any portion of the Project, or Refinancing of all or any portion of the outstanding debt from the Project, and so long as there is any outstanding amount due and owing under this Note, Maker shall notify Holder of any such proposed or intended sale or Refinancing. The Executive Director shall have the right to review all documents related to and to approve or disapprove any Refinancing that will increase the interest rate or increase the outstanding principal amount of such outstanding debt or cause or require the release or withdrawal of cash or equity from any part of the Project. The Executive Director shall reasonably consider any such proposed Refinancing based on an economic evaluation conducted by City’s economic consultant that analyzes the effect of the proposed Refinancing (i) the availability of Residual Receipts to repay this Note (and any other subordinate loans), (ii) the availability of Cost Savings, and (iii) the ability of Maker to repay any outstanding debt or other liens, if any, against the Project or Property as such payment becomes due. In such event, Maker and Holder shall meet and confer, and shall use good faith efforts, to determine the feasibility of the payoff or restructuring of the remaining balance owing under this Note as part of any such sale or Refinancing to provide for repayment of this Note sooner than the fifty-five (55) year repayment period. Nothing herein shall be construed or interpreted to give the Executive Director with the authority to review and approve (or disapprove) a Refinancing that includes in any manner the Resyndication of the Project.
b. Definition of Residual Receipts. For the purposes of this Note, "Residual Receipts" shall mean the sum of money computed as follows:
(i) All rents, revenues, consideration or income (of any form) received by Maker in connection with or relating to the ownership or operation of the Project, including any Net Refinancing Proceeds and any revenue from contributions, loans or grants which is not required to meet future project obligations (but excluding tenants' security deposits, partner capital contributions and similar advances) ("Gross Revenue") less all of the following: all customary and reasonable costs and expenses reasonably and actually incurred in connection with the operation and maintenance of the Project, including but not limited to premiums for Property Insurance and Liability Insurance; the normally amortized principal and interest payments due on mortgages that are Senior to this Note; utility services not paid directly by tenants; maintenance and repair; security services and payments for social/supportive services in an amount approved as part of the Annual Budget; payment of principal or interest on any indebtedness of Maker to any affiliate of Maker (individual or entity) or partner of Maker to repay completion and operating deficit loans relating to the Project in an amount approved as part of the Annual Budget; asset management fee payable to the limited partner of Maker and partnership management fee payable to Maker, which fees together shall not exceed Thirty Thousand Dollars ($30,000) per year during the first year after issuance of the Certificate of Completion with allowable annual escalations of up to two and one-half percent (2.5%) per year Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-5
Exhibit “F”
Land Note
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with any greater amount to be approved by the Authority in the Annual Budget; reasonable property management fees not to exceed Seventy Dollars ($70) per unit per month during the first year after issuance of the Certificate of Completion with allowable annual escalations of up to three percent (3%) per year or greater amount as approved by the Authority in the Annual Budget; deferred Developer Fee in an amount in an amount approved as part of the Project Budget (as defined in the Affordable Housing Agreement); amounts (approved by Holder) expended to restore the Project after a casualty loss or condemnation; reasonable and customary cost for accounting and auditing the books and records of the Project; taxes; franchise tax filing fees; and any other reserves reasonably required by the investors or the lenders approved by the Authority for the Project (collectively, "Operating Expenses"). (ii) Notwithstanding the generality of the foregoing, the following items shall not be considered Operating Expenses for purposes of computing Residual Receipts:
(A) Payment of any fees or expenses or of any portion of the Residual Receipts to Maker or any affiliate of Maker, except as specifically set forth herein; (B) Income taxes imposed upon Maker's income;
(C) Payment of principal or interest on any indebtedness of Maker to any Lender, including any affiliate of Maker (individual or entity) or partner of Maker, except as specifically approved by Holder in writing or otherwise set forth herein; and (D) Depreciation, cost recovery, amortization and similar items which do not involve the expenditure of cash.
6. Audited Financial Statement.
Maker shall annually provide Holder with an audited financial statement documenting the calculation of Residual Receipts for the previous calendar year ending December 31. The audited financial statement shall be provided on or before April 1, together with payment of the Residual Receipts payment due to Holder. Holder shall have the right to inspect and audit Maker's books and records concerning the calculation of the Residual Receipts Payment and to object within ninety (90) days from receipt of Maker's statement. Failure to timely object shall be deemed acceptance. If Holder does object, Holder shall specify the reasons for disapproval.
Maker shall have thirty (30) days to reconcile any disapproved item. If Maker and Holder cannot agree on the amount of the Residual Receipts payment, an independent auditor mutually selected by Maker and Holder shall resolve any disputed items. The cost of the auditor shall be shared equally by Maker and Holder.
7. Annual Budget.
Maker shall prepare and submit to Holder a proposed annual operating budget for the management and operation of the Project ("Annual Budget") no later than 60 days preceding the effective year of such budget. The Annual Budget shall include the projected Gross Revenue Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-6
Exhibit “F”
Land Note
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JAMIER\01200.20009\10270109.25
and Operating Expenses for the year and a line item showing the projected Residual Receipts from the Project for the year. Holder will review the Annual Budget and, if acceptable, approve it, which approval shall not be unreasonably withheld. If the Annual Budget is not acceptable, Holder shall specify the reasons for disapproval. The intent of this section is to provide Holder an opportunity to disapprove any unreasonable expenses which would diminish the Residual Receipts from the Project. Once approved, any changes to the Annual Budget which exceed ten percent (10%) of the total Annual Budget shall require Holder's prior written consent, which consent shall not be unreasonably withheld.
8. Acceleration Upon Certain Events or Upon Default.
In the event of any Default under the terms of this Note, the Affordable Housing Agreement or the Regulatory Agreement, the Deed of Trust which is the security for this Note, or under any Senior loans, notes or deeds of trust, at the option of the Holder and after notice to the Maker, providing Maker with thirty (30) days in which to cure any Default, and such Default not having been cured within thirty (30) days (or if a greater amount of time is reasonably necessary to effect a cure, if actions to cure such Default are not undertaken within said thirty (30) day period and pursued with reasonable diligence thereafter), all principal and interest due under this Note shall immediately become due and payable, upon thirty (30) day written notice from the Holder to the Maker. Failure to exercise such option shall not constitute a waiver of the right to exercise it in the event of any subsequent Default.
Should the undersigned Maker agree to or sell, convey, transfer, or dispose of the real property described in the Deed of Trust securing this Note or any part thereof or interest therein, without first obtaining the prior written consent of the Holder (except for a Permitted Transfer, as defined in the Affordable Housing Agreement), then, at the option of the Holder, all principal and interest due hereunder shall immediately become due and payable upon thirty (30) days written notice from the Holder to the Maker. Consent to one transaction of this type will not constitute a waiver of the right to require consent to future or successive transactions.
Notwithstanding the generality of the foregoing, certain transfers permitted under the Affordable Housing Agreement shall not constitute a Default hereunder or under the Affordable Housing Agreement, and any such action shall not accelerate the maturity of this Note, provided that any transfer is either a Permitted Transfer as defined in the Affordable Housing Agreement or is reasonably acceptable to the Authority with reasonable promptness, and any transferee under such a transfer agrees to be bound by any and all instruments in favor of the Authority.
9. Interest on Default.
From and after a Default, the entire outstanding principal balance of this Note shall automatically bear an annual interest rate equal to the lesser of: (a) eight percent (8%) compounding annually; or (b) the maximum interest rate allowed by law.
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-7
Exhibit “F”
Land Note
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JAMIER\01200.20009\10270109.25
10. Costs Paid by Maker.
Maker agrees to pay the following costs, expenses and attorneys fees paid or incurred by the Holder of this Note, or as adjudged by a court of competent jurisdiction: (a) reasonable costs of collection, costs and expenses and attorneys fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit in such sum as the court may adjudge reasonable as attorneys fees in any action to enforce payment of this instrument.
11. Waiver.
Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this instrument, and expressly agrees that, without in any way affecting the liability of Maker hereunder, the Holder hereof may extend the Maturity Date or the time for payment of any installment due hereunder, accept additional security, release any party liable hereunder or release any security now or hereafter securing this Note. Maker hereby waives, to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this instrument or any deed of trust, security agreement, guarantee or other agreement now or hereafter securing this Note.
12. Indemnification.
Maker shall indemnify, defend, protect and hold the Authority harmless from and against any and all loss, damage, liability, action, cause of action, cost or expense, including, without limitation, reasonable attorneys fees and expenses incurred by the Holder hereof, arising as a result of any (i) fraud or material misrepresentation by the Maker under or in connection with the Affordable Housing Agreement or related agreements; (ii) intentional bad faith waste of the real property encumbered by the deed of trust which secures this Note; and (iii) losses resulting from Maker's failure to maintain insurance as required under the provisions of the deed of trust securing this Note and the Affordable Housing Agreement.
13. Nonrecourse.
This Note shall become a nonrecourse obligation of Maker on the date that Maker files a valid and timely Notice of Completion for the Project and the Holder must resort only to the Project or the Property, or both, for repayment should the Maker fail to repay the sums evidenced hereby. At such time as this Note becomes nonrecourse, neither Maker nor any of its general and limited partner shall have any personal liability for repayment of the Land Loan and no deficiency judgment may be obtained against Maker or any of its general and limited partners except for actual or constructive fraud, material misrepresentation, intentional bad faith waste of or on the Project and such other matters as are referred to below. Notwithstanding the generality of the foregoing, however, Maker shall indemnify, defend, protect and hold Holder harmless from and against any and all loss, damage, liability, action, cause of action, cost or expense, including, without limitation, reasonable attorneys' fees and expenses incurred by the Holder arising as a result of any (i) fraud or material misrepresentation by the Maker under or in connection with the Affordable Housing Agreement or any other agreements or documents Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-8
Exhibit “F”
Land Note
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JAMIER\01200.20009\10270109.25
provided in connection therewith; (ii) intentional bad faith waste of the Property encumbered by the deed of trust which secures this Note; and (iii) losses resulting from Maker's failure to maintain insurance as required under the provisions of the deed of trust securing this Note.
Maker's obligation to indemnify the Holder hereof as aforesaid shall be recourse obligations of the Maker, and in the event of any breach of such obligations, the Holder shall have the right to proceed directly against the Maker to recover any and all losses, damages, liability, costs and expenses (including without limitation, reasonable attorneys' fees and expenses) and may bring any action and institute any proceeding to obtain a deficiency judgment in or following foreclosure for any and all such losses, damages, liabilities, costs and expenses resulting from such breach.
14. Severability.
If any provision of this Note is determined by a court of competent jurisdiction to be void or unenforceable, such determination shall not affect any other provision of this instrument, and all other provisions hereof shall remain valid and in full force and effect.
15. Non-Waiver.
No delay in demanding or failure to demand performance hereunder shall constitute a waiver by the Holder hereof of its right to subsequently demand such performance or to exercise any remedies for any Default hereunder. Further, in order to be effective, any waiver of any of the Holder's rights and remedies hereunder shall be expressed in a writing signed by a duly appointed representative of the Holder hereof. Further, waiver by the Holder hereof of any right hereunder shall not constitute a waiver of any other right, including, but not limited to, the right to exercise any and all remedies for a different or subsequent event of Default hereunder. [Signatures on Following Page]
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
F-9
Exhibit “F”
Land Note
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JAMIER\01200.20009\10270109.25
MAKER:
SECOND STREET FAMILY LP, a California limited partnership By: OHDC Second Street Family LLC,
a California limited liability company,
its managing general partner
By: Orange Housing Development Corporation,
a California nonprofit corporation,
its sole member and manager
By: ____________________________________
Eunice Bobert, Chief Executive Officer
By: C&C Second Street Family LLC,
a California limited liability company,
its developer general partner
By: C & C Development Co., LLC,
a California limited liability company,
its sole member and manager
By: _____________________________________
Todd R. Cottle, Trustee of the 2007 Todd R.
Cottle and Jennifer N. Cottle Revocable Trust.
its member
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
G-1
Exhibit “G”
Deed of Trust
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JAMIER\01200.20009\10270109.25
EXHIBIT "G"
TO
AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT (Corona Second Street Family Apartments)
DEED OF TRUST
[SEE ATTACHED SIXTEEN (16) PAGES]
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
G-1
Exhibit “G”
Deed of Trust
1603\62\3812672.1
JAMIER\01200.20009\10270109.25
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Corona Housing Authority
400 S. Vicentia Avenue
Corona, CA 92882
Attn: Executive Director
APNs: SPACE ABOVE FOR RECORDER'S USE ONLY
EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383 AND §27388.1(a)(2)(D)
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(Corona Housing Authority & City of Corona – Corona Second Street Family Apartments) This Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) ("Deed of Trust") is dated as of _________, 202_, by Second Street Family LP, a California limited partnership, whose address is 414 E. Chapman Avenue, Orange, CA 92866 ("Trustor"), to _______________________________ ("Trustee"), for the benefit of the City of Corona Housing Authority, a public body, corporate and politic, organized under the laws of the State of California ("Authority"), whose address is 400 S. Vicentia Avenue, Corona, CA 92882 and the City of Corona, a municipal corporation ("City, and together with the Authority, the "Beneficiary"), and is executed to secure those four certain Promissory Notes each of even date herewith and executed by the Trustor, one payable to the City and the Authority in the principal amount of Four Million Dollars ($4,000,000.00), one payable to the City in the principal amount of Five Hundred Twenty Nine Thousand Eight Hundred Seventy-Five Dollars ($529,875.00), one payable to the City in the principal amount of ____ Dollars ($________) [not to exceed $2,000,000,] and one payable to the Authority in the principal amount of Seven Million Five Hundred Thirty-Five Thousand Two Hundred Eighty Dollars ($7,535,280.00) respectively, executed by Trustor in favor of Beneficiary (such Promissory Notes, as it may from time to time be supplemented, amended extended, renewed or otherwise modified), the provisions of which are incorporated in the Deed of Trust by this reference.
This Deed of Trust is made with respect to that certain "Affordable Housing Disposition and Development Agreement (Corona Second Street Family Apartments)" dated August 21, 2024, for reference purposes only, between the Trustor, the Beneficiary and the City of Corona, a California municipal corporation ("City") (the "Affordable Housing Agreement").
Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
G-2
Exhibit “G”
Deed of Trust
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JAMIER\01200.20009\10270109.25
Trustor hereby IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION, the following property ("Trust Estate"):
(a) All of that certain real property in the City of Corona, County of Riverside, State of California, more particularly described in Exhibit "A" attached hereto and by this reference made a part hereof ("Subject Property"); (b) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property ("Improvements"); (c) All tenements, hereditament, appurtenances, privileges, franchises and other rights and interests now or in the future benefitting or otherwise relating to the Subject Property or the Improvements, including easements, rights-of-way and development rights ("Appurtenances"). (Appurtenances, together with the Subject Property and the Improvements, are hereafter collectively referred to as the "Real Property"); (d) Subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management operation, leasing or occupancy of the Trust Estate, including those past due and unpaid ("Rents"); (e) All present and future right, title and interest of Trustor in and to all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code ("UCC"), whether existing now or in the future) located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks, heating, ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property ("Goods," and together with the Real Property, collectively the "Property"); and
(f) All present and future right, title and interest of Trustor in and to all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the Property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
G-3
Exhibit “G”
Deed of Trust
1603\62\3812672.1
JAMIER\01200.20009\10270109.25
subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types of intangible personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property (collectively, "Intangibles").
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estates described above in which a security interest may be created under the UCC (collectively, the "Personal Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and remedies of a "secured party" under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9313 and 9402(6) of the UCC.
FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect, the following: (a) payment of that certain Land Promissory Note dated _________, 202__ to the City and the Authority in the original principal amount of Four Million Dollars ($4,000,000.00) (the "Land Note"), (b) payment of that certain Project Promissory Note dated _________, 202_ to the Authority in the original principal amount of Seven Million Five Hundred Thirty-Five Thousand Two Hundred Eighty Dollars ($7,535,280.00) (the "Project Note"), (c) payment of that certain HOME-ARP Promissory Note to the City in the principal amount of Five Hundred Twenty Nine Thousand Eight Hundred Seventy-Five Dollars ($529,875.00) (the "HOME-ARP Note", (d) payment of that certain Fee Deferral Promissory Note to the City in the principal amount of _____ Dollars ($____) [not to exceed $2,000,000] (the "Fee Deferral Note", and together with the Land Note, the Project Note, and the HOME-ARP Note, referred to herein as the "Notes"); and (e) due, prompt and complete observance, performance and discharge of each and every monetary and non-monetary condition, obligation, covenant and agreement contained herein or contained in the Affordable Housing Agreement. The Affordable Housing Agreement, that certain Regulatory Agreement (Corona Second Street Family Apartments) dated August 21, 2024, for reference purposes only, between the Trustor, the Beneficiary and the City ("Regulatory Agreement") and the Notes (collectively, "Secured Obligations") and all of their Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391
G-4
Exhibit “G”
Deed of Trust
1603\62\3812672.1
JAMIER\01200.20009\10270109.25
terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof, however evidenced.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:
1. That Trustor shall perform its obligations as set forth in the Secured Obligations at the time and in the manner respectively provided therein;
2. That Trustor shall not permit or suffer the use of any of the property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed;
3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable. This Deed of Trust shall cover, and the property subject hereto shall include all property now or hereafter affixed or attached to or incorporated upon the Subject Property in, to or under which Trustor now has or hereafter acquires any right, title or interest, which, to the fullest extent permitted by law, shall be deemed fixtures and a part of the Subject Property. To the extent any of the property subject to this Deed of Trust consists of rights in action or personal property covered by the UCC, this Deed of Trust shall also constitute a security agreement, and Trustor hereby grants to Beneficiary, as secured party, a security interest in such property, including all proceeds thereof, for the purpose of securing the Secured Obligations. In addition, for the purpose of securing the Secured Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of the property described herein in, to, or under which Trustor now has or hereafter acquires any right, title or interest, whether present, future or contingent, including, but not limited to, all equipment, inventory, accounts, general intangibles, instruments, documents and chattel paper, as those terms are defined in the UCC, and all other personal property of any kind (including, without limitation, money and rights to the payment of money), whether now existing or hereafter created, that are now or at any time hereafter (i) in the possession or control of Beneficiary in any capacity; (ii) erected upon, attached to or appurtenant to the Subject Property; (iii) located or used on the Subject Property or identified for use on the Subject Property (whether stored on the Subject Property or elsewhere); or (iv) used in connection with, arising from, related to, or associated with the Subject Property or any of the personal property described herein, the construction of any improvements on the Subject Property, the ownership, development, maintenance, management or operation of the Subject Property, the use or enjoyment of the Subject Property or the operation of any business conducted thereon, including, without limitation, all such property described as the Trust Estate hereinabove. The security interests granted in this Paragraph 3 are hereinafter severally and collectively called the "Security Interest". The Security Interest shall be self-operative with respect to the real property described herein but Trustor shall execute and deliver on demand such additional security agreements, financing statements and other instruments as may be requested in order to impose the Security Interest more specifically upon the real and personal property encumbered hereby. The Security Docusign Envelope ID: 5D0EF862-DB82-42AD-AAAE-6D75961C9D3F Docusign Envelope ID: D01E67E6-2CAD-44A1-8085-B5556D1F8A1D Docusign Envelope ID: 7F9B164F-0EB4-47DA-B023-C643C3700391