Agenda, first session — Crescent City City Council, July 24, 2023 (part 2 of 2)

ATTACHMENT NO. 1
Map of Site
Attachment No. 2

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ATTACHMENT NO. 2
Legal Description of the Site
That real property situated in the City of Crescent City, County of Del Norte, State of California, more particularly described as follows:

PARCEL ONE:

BEGINNING at the most Northerly corner of Block 75 of the City of Crescent City, according to the official surveys and monuments of said City; and running Thence Westerly along Seventh Street, 95 feet;
Thence at a right angle Southerly, 72 feet;
Thence at a right angle Easterly, 95 feet to “I” Street; and Thence Northerly along “I” Street, 72 feet to the point of beginning.

PARCEL TWO:

BEGINNING at a point on the Easterly line of H Street, 72 feet Southerly from the most Westerly corner of Block 75 of the City of Crescent City, according to the official surveys and monuments; and running
Thence Southerly along said line of “H” Street, 90 feet; Thence at a right angle Easterly, 240 feet to the Westerly line of “I” Street; Thence Northerly along said line of “I” Street, 90 feet; and Thence at a right angle Westerly, 240 feet to the point of beginning. [APN 118-170-002]
Attachment No. 3

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ATTACHMENT NO. 3

SCHEDULE OF PERFORMANCE

ACTION DATE

1. Execution and Delivery of Agreement by
Developer. The Developer shall execute
and deliver this Agreement to the City.

Not later than August 1, 2023.

2. Execution of Agreement by City. The
City Council shall hold a public meeting
to authorize execution of this Agreement
by the City, and if so authorized, the City
shall execute and deliver this Agreement
to the Developer. (Section 900)
Within 45 days after execution and delivery
by the Developer.

3. Opening of Escrow. The City shall open
an escrow for conveyance of the Site to
the Developer. (Section 202)
Within 30 days after execution of this
Agreement by the City.

4. Submission – Basic Concept Drawings.

The Developer shall prepare and submit
to the City for review and approval Basic
Concept Drawings and related documents
containing the overall plan for
development of the Site. (Section 303)
Completed.

5. Approval – Basic Concept Drawings.

The City shall approve or disapprove the
Developer's Basic Concept Drawings and
related documents. (Section 303)
Completed.

6. Delivery of Preliminary Title Report.

The City shall cause Escrow Agent to
deliver to Developer the Preliminary Title
Report. (Section 205)
Within 15 days after opening of escrow.

7. Approval of Preliminary Title Report.

The Developer shall approval or
disapprove the Preliminary Title Report.
(Section 205)
Within 30 days after receipt thereof by the
Developer.

Attachment No. 3

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ACTION DATE

8. Inspections; Condition of the Site. The
Developer shall complete its
investigation of the Site; its physical
condition, the soils and toxic conditions
of the Site and all other matters that may
affect the Developer's willingness to
develop the Site pursuant to this
Agreement. (Section 212)
Within 90 days after execution of this
Agreement by the City.

9. Submission – Preliminary Construction
Drawings and Landscaping and Grading
Plans. The Developer shall prepare and
submit to the City for review and
approval Preliminary Construction
Drawings and Landscaping and Grading
Plans for the Site. (Section 304)
Within 60 days after receiving approval of
Tax Credit Financing.

10. Approval – Preliminary Construction
Drawings and Landscaping and Grading
Plans. The City shall approve or
disapprove the Developer's Preliminary
Construction Drawings and Landscaping
and Grading Plans. (Section 305)
Within 45 days after receipt thereof by the
City.

11. Submission – Final Construction
Drawings and Landscaping and Grading
Plans. The Developer shall prepare and
submit to the City for review and
approval Final Construction Drawings
and Landscaping and Grading Plans for
the Site. (Section 304)
Not later than 60 days after approval of the
Preliminary Construction Drawings.

12. Submission – Evidence of Equity Capital
and Financing. The Developer shall
submit to the City for review and
approval evidence of equity capital, Tax
Credit Financing and other alternative
financing necessary for development of
the Site. (Section 214)
Within 90 days of receipt of approval of Tax
Credit Financing.

Attachment No. 3

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ACTION DATE

13. Approval – Final Construction Drawings
and Landscaping and Grading Plans. The
City shall approve or disapprove the
Developer's Final Construction Drawings
and Landscaping and Grading Plans.
(Section 305)
Prior to the date set forth herein for the close
of escrow.

14. Approval – Evidence of Equity Capital
and Mortgage Financing. The City shall
approve or disapprove the Developer's
evidence of equity capital and mortgage
financing. (Section 214)
Within 30 days after receipt thereof by the
City.

15. Deposit of Executed Documents and All
Required Sums. The Developer shall
deposit the executed Note, Deed of Trust,
Affordable Housing Covenant, and all
required sums into escrow. (Section 207)
Prior to the date set forth herein for the close
of escrow.

16. Deposit of Grant Deed. The City shall
deposit the grant deed into escrow.
(Section 206)
Prior to the date set forth herein for the close
of escrow.

17. Close of Escrow. The City shall convey
title to the Site to the Developer, and the
Developer shall accept such conveyance.
(Section 203)
Upon completion of all conditions to close
of escrow, but in any event not later than
December 31, 2026, or such later date as
may be approved by both parties.

18. Submission – Certificates of Insurance.

The Developer shall furnish to the City
duplicate originals or appropriate
certificates of bodily injury and property
damage insurance policies. (Section 308)
Prior to the date set forth herein for the
commencement of construction of the
Developer's improvements on the Site.

19. Governmental Permits. The Developer
shall obtain any and all permits required
by the City or any other governmental
agency. (Section 309)
Prior to the date set forth herein for the
commencement of construction of the
Developer's improvements on the Site.

Attachment No. 3

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ACTION DATE

20. Commencement of Construction of
Developer's Improvements. The
Developer shall commence construction
of the improvements to be constructed on
the Site. (Section 307)
Within 30 days after conveyance of the Site
by the City to the Developer.

21. Property Management Agreement. The
Developer shall enter into an agreement
with the approved Property Management
Company. (Section 502)
Prior to completion of construction of the
improvements on the Site.

22. Completion of Construction of
Affordable Units. The Developer shall
complete construction of the Affordable
Units to be constructed on the Site.

Within 18 months after commencement
thereof by the Developer.

23. Issuance – Certificate of Completion.

The City shall furnish the Developer with
Certificate of Completion. (Section 422)
Promptly after completion of all
construction required to be completed on the
Site and upon written request therefor by the
Developer.

Attachment No. 4

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ATTACHMENT NO. 4

SCOPE OF DEVELOPMENT
I. PRIVATE DEVELOPMENT
A. General
The Developer agrees that the Site shall be developed and improved in accordance with the provisions of this Agreement and the plans, drawings and related documents approved by the City pursuant hereto. The Developer and its supervising architect, engineer and contractor shall work with City staff to coordinate the overall design, architecture and color of the improvements on the Site.

B. Developer's Improvements
The Developer shall construct, or cause to be constructed, in accordance with all City of Crescent City requirements, on the Site, the Housing Project consisting of not less than twenty-seven (27) rental dwelling units (the "Units"), consisting of the following:

A three-story structure, the first floor to be developed with a manager’s unit, office, community sunroom and laundry facilities, and 6 additional residential units; the second and third floors each consist of 10 residential units with a mix of one and two bedroom units; a 29-stall parking lot, garbage and recycling area, and landscaping, as more fully set out in the Planning Commission’s approval of Application # UP14-01, AR14-02, PR14-01, approved on April 10, 2014.

Building materials and standards of construction for the Units shall be subject to the approval of the City.

The Developer shall be responsible for the development of all on-site and off-site improvements required for the Housing Project or otherwise made a condition to the development of the Site, including without limitation landscaping as required by the City Planning Department and the extension of all water, sewer, and electric utility services to the Site.

C. Architecture and Design
The Developer's improvements shall be of high architectural quality, shall be well landscaped and shall be effectively and aesthetically designed. The shape, scale of volume, exterior design and exterior finish of the building must be consonant with, visually related to, physically related to and an enhancement of adjacent buildings within the Project Area. The Developer's plans submitted to the City shall describe in detail the architectural character intended for the Developer's improvements.

Attachment No. 5

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D. Applicable Codes
The Developer's improvements shall be constructed in accordance with the Uniform Building Code (with City modifications) and the Crescent City Municipal Code.

II. SITE CLEARANCE AND PREPARATION
The Developer shall perform, or cause to be performed, at its sole cost and expense, the following work:

The Developer shall compact, finish grade and do such site preparation as is necessary for the construction of the Developer's improvements on the Site.

Attachment No. 5

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ATTACHMENT NO. 5

FORM OF GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
________________
5251 Ericson Way
Arcata, CA 95521
Exempt from Recording Fees Per Gov. Code § 27383
TAX STATEMENTS: SAME AS ABOVE Exempt from SB 2 Fees per Gov. Code § 27388.1(a)(2)(D) APN: 118-170-002-000 SPACE ABOVE THIS LINE FOR RECORDER’S USE

GRANT DEED
The undersigned Grantor declares:
__This Transfer is exempt from the documentary transfer tax. __The documentary transfer tax is $____________ and is computed on:
__The full value of the interest or property conveyed
__The full value less the liens or encumbrances remaining thereon at the time of sale.

The property is located in _x_ an Incorporated City of Crescent City or __ an Unincorporated area.

For valuable consideration, the receipt of which is hereby acknowledged, THE CITY OF CRESCENT CITY (herein "City" or "Grantor"), a municipal corporation of the State of California, acting in its capacity as the successor housing entity to the former City of Crescent City Redevelopment Agency, hereby grants to _________________, a California limited partnership (herein called "Grantee"), the real property (the "Site") legally described in the document attached hereto, labeled Exhibit A, and incorporated herein by this reference.

1. The Site is conveyed pursuant to a Disposition and Development Agreement (the "DDA") entered into by and between the Grantor and the Grantee and dated _______________, 2023. The Site is also conveyed subject to easements and other matters of record. The Site is also conveyed subject to the Deed of Trust to be recorded against the Site pursuant to the DDA, and subject to the Affordable Housing Covenant referenced in paragraph 2, below.

2. The Site shall be developed with a low-income senior apartment complex (the "Housing Project") consisting of twenty-seven (27) rental dwelling units, a portion of which shall be rented to qualified very-low and low income senior households ("Eligible Households") in accordance with that certain Affordable Housing Covenant ("Affordable Housing Covenant") to be recorded against the Site pursuant to Section 302 of the DDA. The Grantee hereby covenants and agrees, for itself and its successors and assigns, that during construction and thereafter, the Grantee shall not use the Site for any purpose other than as set forth in the Affordable Housing Covenant for a Attachment No. 5

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period of fifty-five (55) years from the date of recordation of the Affordable Housing Covenant against the Site.

3. Prior to the issuance of a Certificate of Completion by the Grantor as provided in Section 422 of the DDA, the Grantee shall not, except as permitted by the DDA, sell, transfer, convey, assign or lease the whole or any portions of the Site without the prior written approval of the Grantor. Subsequent to the issuance of a Certificate of Completion, any sale, transfer, conveyance or assignment shall be subject to the provisions contained in the Affordable Housing Covenant, the Note, and the Deed of Trust. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Site or to prohibit or restrict the leasing of any part or parts of a building or structure when said improvements are completed.

4. Option To Repurchase. Grantee hereby grants to Grantor the option to repurchase the Site hereby conveyed and all improvements subsequently constructed thereon upon the terms and provisions more fully set forth in Section 612 of the DDA, which provisions are incorporated herein by this reference thereto. As more fully provided in such Section 612:
a. The option shall be exercisable by Grantor in each and every one of the following circumstances:
(1) Grantee fails to commence construction of the improvements on the Site as required by the DDA for a period of ninety (90) days after written notice thereof from the Grantor; or (2) Grantee abandons or substantially suspends construction of improvements on the Site for a period of ninety (90) days after written notice of such abandonment or suspension from the Grantor; or
(3) Grantee transfers, or suffers any involuntary transfer of the Site or any part thereof in violation of the DDA
b. Grantor's option shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit:
(1) Any first mortgage, deed of trust or other security instrument permitted by the DDA; or
(2) Any rights or interests provided in the DDA for the protection of the holder of such mortgages, deeds of trust or other security instruments.

To exercise its right to repurchase, reenter, and take possession with respect to the Site, the Grantor shall pay to the Grantee in cash an amount equal to:
a. The costs actually incurred by the Grantee for on-site labor and materials for the construction of the improvements existing on the Site, exclusive of amounts financed; less b. Any gains or income withdrawn or made by the Grantee from the Site or improvements thereon; and less.

Attachment No. 5

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c. The amount of liens on the Site, and any unpaid assessments against the Site which are assumed by Grantor.

5. The Grantee covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Site.

All deeds, leases or contracts made relative to the Site, the improvements thereon or any part thereof shall contain or be subject to substantially the following nondiscrimination clauses:
(1) In deeds: (a) "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land."
(b) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.

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all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
(a) "That there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased."
(b) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status,
nothing in paragraph (a) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivisions (d) of Section 51 and Section 1360 of the Civil Code and
subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to paragraph (a).
(3) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises."

6. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by the DDA, provided, however, that any successor of Grantee to the Site shall be bound by such remaining Attachment No. 5

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covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.

7. Except as otherwise provided, the covenants contained in the Affordable Housing Covenant and paragraph 2(a) of this Grant Deed shall remain in effect for a period of 55 years from the date of recordation of the Affordable Housing Covenant. The covenants against discrimination contained in paragraph 5 of this Grant Deed shall remain in perpetuity. The covenants contained in paragraphs 3 and 4 shall remain in effect until issuance of a Certificate of Completion pursuant to Section 422 of the DDA for the Site.

8. The covenants contained in paragraphs 2, 3, 4, 5 and 6 of this Grant Deed shall be binding for the benefit of the Grantor, its successors and assigns, and any successor in interest to the Site or any part thereof, and such covenants shall run in favor of the Grantor and such aforementioned parties for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. The Grantor and such aforementioned parties, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach.

The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor, its successors and such aforementioned parties.

9. In the event of any express conflict between this Grant Deed or the DDA, the provisions of this Grant Deed shall control.

IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _____ day of ___________, 20___.
"GRANTOR" CITY OF CRESCENT CITY, a municipal
corporation of the State of California
_____________________________________
By: Eric Wier, City Manager
ATTEST:

Robin Altman, City Clerk
Attachment No. 5

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The provisions of this Grant Deed are hereby approved and accepted. "GRANTEE"
_____________________, 20___ ______________, a California limited partnership
By:

Name: ______________________________
Its:

Attachment No. 5

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STATE OF CALIFORNIA }
COUNTY OF ____________}
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.

On _________________________ before me, ______________________________________, a Notary Public, personally appeared ____________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(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. [seal]
__________________________________
Signature
Attachment No. 5

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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. [seal]
__________________________________
Signature
Attachment No. 5

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EXHIBIT A

LEGAL DESCRIPTION OF THE SITE
That real property situated in the City of Crescent City, County of Del Norte, State of California, more particularly described as follows:

PARCEL ONE:

PARCEL TWO:

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ATTACHMENT NO. 6-A

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Crescent City
377 J Street
Crescent City, CA 95531
Attn: City Clerk
Exempt from Recording Fees Per Gov. Code Section 27383
TAX STATEMENTS: NO CHANGE Exempt from SB 2 Fees per Gov. Code § 27388.1(a)(2)(D) APN 118-170-002-000

AFFORDABLE HOUSING COVENANT
For valuable consideration, the receipt of which is hereby acknowledged, CITY OF CRESCENT CITY ("City"), acting in its capacity as the successor housing entity to the former Redevelopment Agency of the City of Crescent City, hereby agrees with _____________, a California limited partnership ("Owner"), with respect to that certain parcel of real property (the "Site") legally described on Exhibit A, that the Site and the residential units to be constructed thereon (the "Housing Project") will be subject to the conditions, restrictions, reservations and rights of City specified below.

This Covenant is entered into pursuant to a Disposition and Development Agreement between the City and Owner (as Developer) dated _____________, 20___ (the "DDA"). Pursuant to the DDA, the Owner executed a promissory note in favor of the City, in the amount of $___________ (“Note”) to evidence the Purchase Price paid by the Developer to acquire the Site from the City for purposes of development of the Housing Project. The Note is secured by a deed of trust recorded against the Site.

1. USE OF THE SITE. The Owner hereby covenants and agrees, for itself, its lessees, successors and assigns, as follows:

A. The City and Owner have executed this Agreement to assure the Site meets the requirements of California Health and Safety Code Sections 33334.2 and 33413, and remains affordable for the longest feasible period, but for not for fewer than fifty-five (55) years.

B. Rent and Income Restrictions. Twenty-six (26) of the residential units to be developed on the Site (the "Affordable Units") shall be rented to low income households who qualify as senior citizens under California Civil Code Section 51.3, as the same may be amended from time to time, and whose income does not exceed the limits set forth below ("Eligible Households"):

Attachment No. 6-A

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All of the Affordable Units constructed on the Site shall be available to Eligible Households whose income does not exceed sixty percent (60%) of the area median income, with at least 20% of those units being rented to persons with a gross household income that does not exceed fifty percent (50%) of the Area Median Income, as defined in California Health and Safety Code Section 5009. These Affordable Units shall be available at rents that do not exceed 30% of 60% of the AMI or 30% of 50% of the AMI, as applicable and as adjusted by Assumed Household Size, less a utility allowance.

The one (1) remaining residential unit to be developed on the Site shall be reserved for occupancy by an on-site property manager.

The maximum housing cost of the Eligible Households for the income level set forth above must comply with the regulations promulgated by the California Department of Housing and Community Development Sections 6910-6932 in Title 25 of the California Code of Regulations, governing the City's set aside housing fund, or with the eligibility requirements established by the Tax Credit Financing or the regulatory agreement relating to any other federally administered program providing financing for the Housing Project.

For purposes of this Covenant:
"Area Median Income or AMI" shall mean the median income for households in Del Norte County, California, as published from time to time by the United States Department of Housing and Urban Development ("HUD") in a manner consistent with the determination of median gross income under Section 8 of the United States Housing Act of 1937, as amended, and as defined in Title 25, California Code of Regulations, Section 6932. In the event that such income determinations are no longer published by HUD, or are not updated for a period of at least 18 months, the City shall provide the Owner with other income determinations that are reasonably similar with respect to methods of calculation to those previously published by HUD.

C. Reporting Requirements. Annual reports and annual income recertifications must be submitted to the City. The reports, at a minimum, shall include:
(1) The number of persons per unit
(2) Tenant name
(3) Initial occupancy date
(4) Rent paid per month
(5) Gross income per year
(6) Percent of rent paid in relation to income.

Such information shall be reported to the City pursuant to Health and Safety Code Section 33418, in substantially the form attached hereto as Exhibit B, or in a substantially equivalent format acceptable to the City.

Annual income recertifications shall also contain those documents used to certify eligibility. City may, from time to time during the term of this Covenant, request additional or Attachment No. 6-A

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different information and Owner shall promptly supply such information in the reports required hereunder. Owner shall maintain all necessary books and records, including property, personal and financial records, in accordance with requirements prescribed by City with respect to all matters covered by this Covenant. Owner, at such time and in such forms as City may require, shall furnish to City statements, records, reports, data and information pertaining to matters covered by this Covenant. Upon request for examination by City, Owner, at any time during normal business hours, shall make available all of its records with respect to all matters covered by this Covenant. Owner shall permit City to audit, examine and make excerpts or transcripts from these records.

City acknowledges that Owner will be required to comply with certain reporting requirements as a condition to Owner’s Tax Credit Financing (as defined in the DDA). City hereby agrees that, so long as said reporting requirements remain in effect, and Owner fully complies with any such reporting requirements and provides a copy of all such reports to the City, Owner will be deemed to have complied with the reporting requirements under this Article 2.

2. MAINTENANCE. The Owner and all successors in interest, agree that they shall maintain, or cause to be maintained, the Site in a manner consistent with the provisions set forth therefor in the Crescent City Municipal Code, and shall keep the entire Site reasonably free from any accumulation of debris or waste materials prior to and after construction.

If, at any time, Owner fails to maintain the Site, and has either failed to commence to cure such condition or to diligently prosecute to completion the condition or the condition is not corrected after expiration of sixty (60) days from the date of written notice from City to Owner, City may perform the necessary corrective maintenance, and Owner shall pay such costs as are reasonably incurred for such maintenance. The City shall have the right to place a lien on the Site should Owner not reimburse City for such costs within sixty (60) days following City’s written demand to Owner for reimbursement of such costs. Owner, on behalf of itself its heirs, successors and assigns, hereby grants to City and its officers, employees and agents, an irrevocable license to enter upon the Site to perform such maintenance during normal business hours after receipt of written notice from City as hereinabove described and Owner’s failure to cure or remedy such failure within sixty (60) days of such notice. Any such entry shall be made only after reasonable notice to Owner, and City shall indemnify and hold Owner harmless from any claims or liabilities pertaining to any such entry by City.

Failure by Owner to maintain the Site in the condition provided in this Section 2 may, in City’s reasonable discretion, constitute a default under this Covenant.

3. NO TRANSFER. The Owner shall not sell, transfer, convey, encumber, assign or lease the whole or any part of the Site without the prior approval of the City, which shall not be unreasonably withheld. Owner shall request approval by written notice at least ninety (90) days prior to any proposed transfer. This prohibition shall not be deemed to (i) prevent the granting of easements or permits to facilitate the development of the Site, (ii) prohibit or restrict the rental or leasing of units when the construction of the Housing Project is completed, or (iii) prohibit or restrict the grant and exercise of an option and/or right of first refusal to purchase the Site given by Owner to a general partner of Owner in accordance with the Owner’s Partnership Agreement Attachment No. 6-A

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on or around the expiration of the tax credit compliance period which shall not require the prior written approval of Owner, but Owner shall give notice of such transfer to City.

4. MANAGEMENT. During the term of this Covenant, Owner shall promptly notify the City in the event there is any change in the property management company managing the Housing Project. The property management and maintenance agreement shall name the City as a third-party beneficiary permitting the City the right to enforce the Agreement. Owner shall submit a copy of such agreement to the City, provided the City shall not have the right to approve or disapprove such agreement except to ensure compliance of such agreement with the provisions of this paragraph 4.

5. NO DISCRIMINATION. The Owner covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, or genetic information in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Owner itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Site.

6. NONDISCRIMINATION AND NONSEGREGATION CLAUSES. All deeds, leases or contracts made relative to the Site, the improvements thereon or any part thereof, shall contain or be subject to substantially the following nondiscrimination and nonsegregation clauses:

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(b) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.

Subdivisions (d) of Section 51 and Section 1360 of the Civil Code and subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (a).
(2) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
(a) "That there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased."
(b) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status,
nothing in paragraph (a) shall be construed to affect Sections

Page 6 ends

sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises."

7. NO IMPAIRMENT OF LIEN. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Covenant shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument; provided, however, that any successor of Owner to the Site shall be bound by such covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.

8. DURATION. The covenants contained in paragraph 1 of this Covenant shall be deemed to run with the land in accordance with Section 33334.3(f) of the Health and Safety Code or any successor statute and shall remain in effect for not less than fifty-five (55) years following recordation of this Covenant. The covenants against discrimination contained in paragraphs 5 and 6 of this Covenant shall be deemed to run with the land in accordance with Section 33438 of the Health and Safety Code or any successor statute and shall remain in effect in perpetuity.

9. SUCCESSORS AND ASSIGNS. The covenants contained in this Covenant shall be binding for the benefit of the City and its respective successors and assigns, third party beneficiaries, and any successor in interest to the Site or any part thereof, and such covenants shall run in favor of the City and such aforementioned parties for the entire period during which such covenants shall be in force and effect, without regard to whether the City is or remains an owner of any land or interest therein to which such covenants relate. The City, and such aforementioned parties, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Covenant shall be for the benefit of and shall be enforceable only by the City, and its respective successors and assigns, third party beneficiaries, and such aforementioned parties.

10. SUBORDINATION. Upon written request by Owner, City shall agree that the terms and conditions of this Covenant shall be subject to and subordinate to the terms and conditions of financing obtained by Owner, through a lender acceptable to the City (the "Lender") and upon terms and conditions reasonably approved by the City, for tax credit financing, construction or permanent financing, to be secured by a mortgage against the Site; provided the total aggregate amount of financing secured by Owner together with the Note provided for under that certain Disposition and Development Agreement between Owner and City, dated ________________, 2023, shall not exceed the appraised value of the completed Housing Project; and provided, further, any Lender for construction or permanent financing that is not obtained through an approved federal or state program shall agree to include in its subordination agreement and deed of trust the following conditions: (i) City shall receive any notices of default issued by Lender to Owner; (ii) City shall have the right to cure any default by Owner within forty-five (45) days after a notice of default; (iii) City shall have the right to foreclose its Deed of Trust without Lender accelerating its debt, provided City has cured or is attempting to cure any defaults under Attachment No. 6-A

Page 7 ends

the deed of trust; and (iv) City shall have the right to transfer the Housing Project to another nonprofit corporation, or to a limited partnership whose general partner is a nonprofit corporation, who shall own and operate the Housing Project as an affordable rental housing project with the consent of Lender, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, if Owner is unable to secure a senior lender that will agree to the subordination provisions above, City shall use commercially reasonable best efforts to subordinate this Covenant to the Lender on commercially reasonable terms.

IN WITNESS WHEREOF, the City and Owner have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized, this _____ day of _________________, 20____.

CITY:

CITY OF CRESCENT CITY, a municipal
corporation of the State of California
By: Eric Wier, City Manager
ATTEST:

Robin Altman, City Clerk
OWNER:
______________, a California limited
partnership
By:

Name: ______________________________
Its:

Attachment No. 6-A

Page 8 ends

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. [seal]
__________________________________
Signature
Attachment No. 6-A

Page 9 ends

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. [seal]
__________________________________
Signature
Attachment No. 6-A

Page 10 ends

EXHIBIT A
Legal Description of the Site
That real property situated in the City of Crescent City, County of Del Norte, State of California, more particularly described as follows:

PARCEL ONE:

PARCEL TWO:

Page 11 ends

EXHIBIT B

TENANT INCOME CERTIFICATION
Project: Date:

Affordable Unit: _____ 60% of Area Median Income or _____ 50% of Area Median Income Address/Unit Number: Rent:

Tenant/Household Name: Date of Lease:

Size of Household: Expiration:

Total Household Income: per year
The following list includes each member of the household and their income. Attached are federal or state income tax returns for the most recent tax year, current stubs from paychecks or other evidence of the income of each income producing member of the household.

Name of
Household
Member Relationship Age
Social Security
Number
Annual
Income
Source of Income/
Name of Employer

I/We the undersigned have read and answered fully, frankly and personally each of the above questions under penalty of perjury and do hereby swear they are true.

Head of Household Date Owner/Owner's Agent Date
Attachment No. 6-A

Page 12 ends

CERTIFICATION OF CONTINUING COMPLIANCE
Project: Date:

Total Affordable Housing Units in Project:

Low-Income Units (not to
exceed 60% of Median Income):

Very Low-Income Units (not to
exceed 50% of Median Income):

The Owner, in accordance with the Affordable Housing Covenant with the City of Crescent City, dated does hereby certify that during the preceding year, the units identified on the following pages were occupied in accordance with the Affordable Housing Covenant and does hereby further certify that the representations set forth herein are true and correct to the best of the undersigned's knowledge.

Signed: Date:

Owner/Owner's Agent
[See Attached.]
Attachment No. 6-A

Page 13 ends

ANNUAL COMPLIANCE REPORT
Project: Date:

Low-Income Units (Not to Exceed 60% of Median Income)
Unit No./Address
Type Tenant Name
Annual
Household
Income
Number in
Household
Monthly
Rent

(Attach additional sheets as required.)
Signed: Date:

Owner/Owner's Agent
Attachment No. 6-A

Page 14 ends

ANNUAL COMPLIANCE REPORT
Project: Date:

Very Low-Income Units (Not to Exceed 50% of Median Income) Unit No./Address
Type Tenant Name
Annual
Household
Income
Number in
Household
Monthly
Rent

(Attach additional sheets as required.)
Signed: Date:

Owner/Owner's Agent
Attachment No. 6-B

Page 1 ends

ATTACHMENT NO. 6-B

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

NOTICE OF AFFORDABILITY RESTRICTIONS

ON TRANSFER OF PROPERTY
Important notice to owners, purchasers, tenants, lenders, brokers, escrow and title companies, and other persons, regarding affordable housing restrictions on the real property described in this Notice: Restrictions have been recorded with respect to the property described below (referred to in this Notice as the “Property”) which restrict the price and terms at which the Property may be sold or rented. These restrictions may limit the sales price or rents of the Property to an amount which is less than the fair market value of the Property. These restrictions also limit the income of persons and households who are permitted to purchase and rent the Property.

Title of Document Containing Affordable Housing Restrictions: Affordable Housing Covenant (referred to in this Notice as the “Affordable Housing Restrictions”).

Parties to Affordable Housing Restrictions:

City of Crescent City (“City”) and
________________, a California limited partnership (“Owner”).

The Affordable Housing Restrictions are recorded (check one) o as Document No. ______________________, official records of Del Norte County, on ________________________; or
o concurrently with this Notice, official records of Del Norte County.

Legal Description of Property:

See Exhibit A (Attached hereto)
Street Address of Property: 655 H Street, Crescent City, California.

Attachment No. 6-B

Page 2 ends

Assessor’s Parcel Number of Property: 118-170-002-000
Summary of Affordable Housing Restrictions (check as applicable):
o The Affordable Housing Restrictions restrict the amount of rent which may be charged for the rental housing unit or units on the Property, as follows:

Twenty-Six (26) of the residential units constructed on the Property shall be available to Eligible Households whose income does not exceed sixty percent (60%) of the area median income, six (6) of which shall be made available to Eligible Households whose income does not exceed fifty percent (50%) of the area median income. These Affordable Units shall be available at rents that do not exceed 30% of 60% of AMI or 30% of 50% of AMI, as applicable and adjusted by Assumed Household Size, less a utility allowance.

The remaining one (1) residential unit constructed on the Property shall be reserved for occupancy by an on-site property manager.
“Area Median Income" shall mean the median income for households in Del Norte County, California, as published from time to time by the United States Department of Housing and Urban Development ("HUD") in a manner consistent with the determination of median gross income under Section 8 of the United States Housing Act of 1937, as amended, and as defined in Title 25, California Code of Regulations, Section 6932.
o The Affordable Housing Restrictions restrict the income level of the tenant or buyer of the Property, as follows:

Twenty-six (26) of the residential units constructed on the Property shall be available to Eligible Households whose income does not exceed sixty percent (60%) of the area median income. These Affordable Units shall be available at rents that do not exceed 30% of 60% of the Median Income, adjusted by Assumed Household Size, less a utility allowance.

The remaining one (1) residential unit constructed on the Property shall be reserved for occupancy by an on-site property manager.
“Area Median Income" shall mean the median income for households in Del Norte County, California, as published from time to time by the United States Department of Housing and Urban Development ("HUD") in a manner consistent with the determination of median gross income under Section 8 of the United States Housing Act of 1937, as amended, and as defined in Title 25, California Code of Regulations, Section 6932.
o Term of Restrictions: 55 years, commencing on ___________________ and terminating on __________________.

Attachment No. 6-B

Page 3 ends

This Notice does not contain a full description of the details of all of the terms and conditions of the Affordable Housing Restrictions. You will need to obtain and read the Affordable Housing Restrictions to fully understand the restrictions and requirements which apply to the Property. In the event of any conflict between the terms of this Notice and the terms of the Affordable Housing Restrictions, the terms of the Affordable Housing Restrictions shall control.

This Notice is being recorded and filed in compliance with Health and Safety Code Section 33334.3(f)(3) and (4) and shall be indexed against the City and the current Owner of the Property.

Dated: , 20____ CITY OF CRESCENT CITY
By: Eric Wier, City Manager
ATTEST:

Robin Altman, City Clerk
Dated: , 20____ _______________, LP
By: ____________________________________,
Daniel Johnson, President
Attachment No. 6-B

Page 4 ends

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. [seal]
__________________________________
Signature
Attachment No. 6-B

Page 5 ends

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. [seal]
__________________________________
Signature
Attachment No. 6-B

Page 6 ends

EXHIBIT A
Legal Description of the Property
That real property situated in the City of Crescent City, County of Del Norte, State of California, more particularly described as follows:

PARCEL ONE:

PARCEL TWO:

Page 1 ends

ATTACHMENT NO. 7

FORM OF CERTIFICATE OF COMPLETION

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

CERTIFICATE OF COMPLETION OF

CONSTRUCTION AND IMPROVEMENT
WHEREAS, the CITY OF CRESCENT CITY, a municipal corporation of the State of California (hereinafter referred to as the "City") and _____________ a California limited partnership, ("Developer"), are parties to that certain Disposition and Development Agreement dated ________________, 20__ (the "DDA"); and
WHEREAS, pursuant to the DDA, the Developer has developed the Site (as defined therein) legally described in the attached Exhibit A (the "Site") by constructing, or causing to be constructed, all of the improvements required under the DDA; and WHEREAS, pursuant to Section 422 of the DDA, promptly after completion of construction and development of the improvements to be developed on the Site (as set forth in the DDA) and upon the written request by the Developer, the City is required to furnish the Developer with a Certificate of Completion; and
WHEREAS, the issuance by the City of the Certificate of Completion shall be conclusive evidence that the Developer has complied with the terms of the DDA pertaining to construction and development of the improvements upon the Site; and
WHEREAS, the Developer has requested that the City furnish the Developer with the Certificate of Completion for the Site; and
WHEREAS, the City has conclusively determined that construction of the improvements on the Site as required by the DDA has been satisfactorily completed; NOW, THEREFORE:

Attachment No. 7

Page 2 ends

1. As provided in the DDA, the City does hereby certify that construction of the improvements on the Site as required by the DDA has been fully and satisfactorily performed and completed.

2. The DDA is of no further force and effect, with respect to the construction of the improvements to be constructed on the Site, and all rights, duties, obligations and liabilities of the City and the Developer thereunder with respect to such construction shall cease to exist. Any continuing and existing rights, duties, obligations and liabilities of the City and Developer, and its successors and assigns pertaining to the Site, are provided in the Grant Deed from the City conveying the Site to the Developer, in the Note and Deed of Trust, and the Affordable Housing Covenant recorded against the Site as provided for under and pursuant to the DDA.

3. This Certificate of Completion shall not be deemed or construed to constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the construction of the improvements on the Site. This Certificate of Completion is not a notice of completion as referred to in Section 3093 of the California Civil Code.

IN WITNESS WHEREOF, the City has executed this Certificate of Completion as of this _____ day of _______________, 20___.

CITY OF CRESCENT CITY ("City")
By: Eric Wier, City Manager
ATTEST:
____________________________________
Robin Altman, City Clerk
ACCEPTED BY:

DANCO Communities (“Developer”)
By:

Name: ______________________________
Its:

Attachment No. 7

Page 3 ends

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. [seal]
__________________________________
Signature
Attachment No. 7

Page 4 ends

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. [seal]
__________________________________
Signature
Attachment No. 7

Page 0 ends

EXHIBIT A

LEGAL DESCRIPTION OF THE SITE
That real property situated in the City of Crescent City, County of Del Norte, State of California, more particularly described as follows:

PARCEL ONE:

PARCEL TWO:

Page 1 ends

ATTACHMENT NO. 8

FORM OF NOTE
_________________, 20___
$910,000.00 Crescent City, California
FOR VALUE RECEIVED, DANCO COMMUNITIES a California corporation (the "Maker"), having an address of 5251 Ericson Way, Arcata, CA 95521, promises to pay CITY OF CRESCENT CITY ("Holder"), the principal sum not to exceed NINE HUNDRED TEN THOUSAND DOLLARS ($910,000.00), together with simple interest at the rate of three percent (3%) per annum, pursuant to the terms and conditions set forth below.

1. This Note is made pursuant to Section 201 and 301 of that certain Disposition and Development Agreement (the "DDA") between Maker (as the Developer) and Holder (as the City) dated ____________, 20___. Pursuant to the DDA, the Holder has conveyed certain real property (the "Site") to the Maker for construction of a low-income senior apartment complex (the "Housing Project"), consisting of twenty-seven (27) residential units. Twenty-six (26) of the residential units (the "Affordable Units") shall be rented to eligible low-income households, with at least 6 of those being rented to eligible very low-income households ("Eligible Households") in accordance with an Affordable Housing Covenant executed and recorded against the Site pursuant to the DDA, and the remaining one (1) residential unit shall be reserved for occupancy by an on-site property manager. This is a purchase money note to evidence the Purchase Price paid by Maker for the Site and the Development Fee Loan pursuant to the DDA. All capitalized terms not defined in this Note shall have the meaning set forth in the DDA.

2. Payment of this Note is secured by a deed of trust, assignment of rents, security agreement and fixture filing, together with an Addendum thereto (collectively, the "Deed of Trust") from Maker to Holder recorded against the Site.

3. This Note shall be due and payable in full fifty-five (55) years from the date hereof.

Payments of interest and principal shall be made to the City from "Residual Receipts" which is hereinafter defined. Starting on or before June 1 of the year following the year in which the Project receives its Certificate of Completion, and to the extent there are Residual Receipts (as defined below) available from the Housing Project, Maker shall pay to Holder on an annual basis payments equal to fifty percent (50%) of Residual Receipts to be shared pro rata with all other agency lenders receiving payments from Residual Receipts . All payments made hereunder shall be credited first to any accrued but unpaid interest, then to current interest due and owing and lastly to principal.

Interest not paid current shall accrue and shall not be compounded. Any outstanding balance of principal and interest owing under this Note shall be due and payable in full fifty-five (55) years from the date hereof.

4. "Residual Receipts" for purposes of this Note shall mean the sum of money computed as follows:

Attachment No. 8

Page 2 ends

(a) All rents, revenues, consideration or income, excluding security deposits) derived by Maker in connection with or relating to the ownership or operation of the Housing Project, including any revenue derived from any refinancing of the Housing Project, less all of the following: (i) all customary and reasonable costs and expenses in connection with the operation and maintenance of the Housing Project; (ii) a property management fee (previously approved by Holder); (iii) principal and interest paid by Maker on account of any loan(s) or other obligations approved by Holder or evidenced by this Note; (iv) amounts (previously approved by Holder) expended to restore the Housing Project after a casualty loss or condemnation; (v) reasonable and customary cost for accounting and auditing the books and records of the Project; (vi) an administrative fee charged by a tax credit investment partner ("Investor Asset Management Fee") not to exceed $7500 annually (which may escalate by 3% annually); (vii) a management fee ("Partnership Management Fee") not to exceed $5000 (which may escalate by 3% annually), provided such management fee is paid to the general partner for performing its general partnership duties, including but not limited to the following: reviewing the monthly operating budget; overseeing the performance of the property manager; meetings, coordination and conflict resolution with the adjacent property owner; review and approval of the annual operating budget; prepare, review and approval of annual partnership reports; review and approval of tax returns; coordination with the investor limited partner; and resolution of miscellaneous issues normally associated with the ownership and operation of multi-family housing; (viii) a managing general partner fee not to exceed $2700 (which may escalate by 3% annually); (ix) any deferred developer's fee owed the general partner of Maker under Maker's Partnership Agreement, provided the same are approved by Holder; and (x) amounts (previously approved by Holder) reserved by Maker as an operating contingency reserve account and a replacement reserve account (and deposited in an account approved by Holder) for the Housing Project. (b) Notwithstanding the generality of the foregoing, the following items are not expenses or deductible in computing Residual Receipts:
(i) Payment of any fees or expenses or of any portion of the Residual Receipts to Maker or any affiliate of Maker, other than the Partnership Management Fee paid to the general partner for performing its general partnership duties (as described in subsection (a), above);
(ii) Income taxes imposed upon Maker's income;
(iii) Payment of interest on any indebtedness of Maker to any affiliate of Maker (individual or entity) or to any other third-party lender or partner not otherwise approved by Holder; and
(iv) Depreciation, cost recovery, amortization and similar items which do not involve the expenditure of cash.

5. Maker shall deliver annual balance sheets and income statements showing all revenues and expenses of the Housing Project. An audited financial statement shall be delivered within one hundred eighty (180) days of the end of each calendar year along with payment of the Attachment No. 8

Page 3 ends

Residual Receipts. Holder shall have the right to inspect and audit Maker's books and records concerning the calculation of Residual Receipts within thirty (30) 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, 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.

6. Maker shall prepare and submit to Holder a proposed annual operating budget for the management and operation of the Housing Project for the following calendar year by no later than November 1 of each year until this Note is paid in full. The proposed budget shall include a line item showing the projected Residual Receipts from the Housing Project for the year. Holder will review the proposed budget and, if acceptable, approve it, which approval shall not be unreasonably withheld. If the budget is not acceptable, Holder shall specify the reasons for disapproval. The intent of this paragraph is to provide Holder an opportunity to disapprove any unreasonable expenses which would diminish the Residual Receipts from the Housing Project.

Once approved, any changes to the budget which exceed ten percent (10%) of the total budget shall require Holder's prior written consent, which consent shall not be unreasonably withheld.

7. Notwithstanding anything to the contrary provided herein, in the event that the Housing Project is in material default under the terms of the Affordable Housing Covenant or the Tax Credit Financing provisions such that the affordability restrictions are no longer in effect, or if there shall have been an uncured event of default under this Note or the Deed of Trust securing this Note after the passage of applicable notice and cure periods, then the entire unpaid principal of this Note and accrued interest thereon shall be immediately due and payable.

8. Any payments due hereunder shall be made in lawful money of the United States to the City of Crescent City, 377 J Street, Crescent City, California 95531. The place of payment may be changed from time to time as the Holder may from time to time designate in writing.

9. Maker hereby covenants and agrees that it shall maintain, or cause to be maintained; the Site in a manner consistent with the provisions set forth therefor in the Crescent City Municipal Code, and shall keep the entire Site reasonably free from any accumulation of debris or waste materials prior to and after construction.

If, at any time, Maker fails to maintain the Site, and has either failed to commence to cure such condition or to diligently prosecute to completion the condition or the condition is not corrected after expiration of thirty (30) days from the date of written notice from Holder to Maker, Holder may perform the necessary corrective maintenance, and Maker shall pay such costs as are reasonably incurred for such maintenance. The Holder shall have the right to place a lien on the property should Maker not reimburse Holder for such costs within sixty (60) days following Holder's written demand to Maker for reimbursement of such costs. Maker, on behalf of itself its heirs, successors and assigns, hereby grants to Holder and its officers, employees and agents, an irrevocable license to enter upon the Site to perform such maintenance during normal business hours after receipt of written notice from Holder as hereinabove described and Maker's failure to cure or remedy such failure within sixty (60) days of such notice. Any such entry shall be made Attachment No. 8

Page 4 ends

only after reasonable notice to Maker, and Holder shall indemnify and hold Maker harmless from any claims or liabilities pertaining to any such entry by Holder.

Failure by Maker to maintain the Site in the condition provided in this Section 9 may, in Holder's reasonable discretion, constitute a default under this Note and the related Deed of Trust.

The foregoing covenants shall remain in effect for the Site for a period of fifty-five (55) years from the date of this Note, or until all amounts due Holder hereunder are paid in full, whichever is later.

10. The occurrence of any of the following shall constitute an event of default under this Note: (i) Maker fails to pay any amount due hereunder within fifteen (15) days of its due date; (ii) Any default by Maker under this Note, the Deed of Trust or the DDA after the expiration of applicable notice and cure periods; (iii) Any default by Maker under any other document affecting the Housing Project or Site, including without limitation any document executed by Maker in connection with the Tax Credit Financing, after the expiration of any applicable notice or cure periods provided therein; (iv) The sale, transfer or other conveyance of all or any part of the Site or Housing Project, or any interest in it, without Holder's prior written consent, which shall not be unreasonably withheld.

Upon the occurrence of any event of default, or at any time thereafter, at the option of the Holder hereof and without notice, the entire unpaid principal and interest owing on this Note shall become immediately due and payable. This option may be exercised at any time following any such event, and the acceptance of one or more installments thereafter shall not constitute a waiver of Holder's option. Holder's failure to exercise such option shall not constitute a waiver of such option with respect to any subsequent event. Holder's failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof.

11. At all times when Maker is in default hereunder by reason of Maker's failure to pay principal due under this Note or any amounts due under any loan documents securing this Note, the interest rate on the sums as to which Maker is in default (including principal, if Holder has elected to declare it immediately due and payable), shall be the lower of the highest rate then allowed by law or two percent (2%) over the prime interest rate announced by Wells Fargo Bank, N.A., as of the date of the default.

12. Maker and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof or of any installment hereof, to the release of any party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without any way affecting or discharging this liability.

13. Maker agrees to pay immediately upon demand all costs and expenses of Holder including reasonable attorneys' fees, (i) if after default this Note be placed in the hands of an Attachment No. 8

Page 5 ends

attorney or attorneys for collection, (ii) if after a default hereunder or under the Deed of Trust, the DDA or under any loan document referred to herein Holder finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to collection of this Note against Maker, any guarantor or any other party liable therefore or to the protection of its rights under this Note, the Deed of Trust, the DDA or other loan document, or (iii) if Holder seeks to have the Site abandoned by or reclaimed from any estate in bankruptcy, or attempts to have any stay or injunction prohibiting the enforcement or collection of the Note or prohibiting the enforcement of the Deed of Trust or any other agreement evidencing or securing this Note lifted by any bankruptcy or other court.

14. If Holder shall be made a party to or shall reasonably intervene in any action or proceeding, whether in court or before any governmental agency, affecting the property or the title thereto or the interest of the Holder under the Deed of Trust, including, without limitation, any form of condemnation or eminent domain proceeding, Holder shall be reimbursed by maker immediately upon demand for all costs, charges and attorneys' fees incurred by Holder in any such case, and the same shall be secured by the Deed of Trust as a further charge and lien upon the Site.

15. Payment of this Note is secured solely by the Deed of Trust recorded against the Site and all improvements thereon, without recourse of any kind against Maker or its constituent entities or limited partners.

16. Any notices provided for in this Note shall be given by mailing such notice by certified mail, return receipt requested, at the address stated in this Note or at such other address as either party may designate in written notice. Copies of any notices given under this Note shall be sent as follows:

To City: City of Crescent City
377 J Street
Crescent City, CA 95531
Attn: City Manager
To Maker: _______________
5251 Ericson Way
Arcata, California 95521
Attn: Christopher Dart

17. This Note shall be binding upon Maker, its successors and assigns.

18. This Note shall be construed in accordance with and be governed by the laws of the State of California.

Attachment No. 8

Page 6 ends

19. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.
_____________________
By:

Name: ______________________________
Its:

Attachment No. 9

Page 1 ends

ATTACHMENT NO. 9

FORM OF DEED OF TRUST

FIRST AMERICAN TITLE COMPANY (OR OTHER TITLE COMPANY APPROVED

BY CITY) STANDARD FORM OF DEED OF TRUST TO BE USED WITH THE ATTACHED "ADDENDUM TO DEED OF TRUST" ATTACHED THERETO.

Attachment No. 9
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ADDENDUM TO DEED OF TRUST
This Addendum to Deed of Trust is part of the Deed of Trust dated to which it is attached between ____________, a California limited partnership, as Trustor, and the CITY OF CRESCENT CITY, a municipal corporation, as Beneficiary of the Deed of Trust, together with this Addendum to Deed of Trust, are executed and delivered pursuant to and in furtherance of that certain Disposition and Development Agreement, dated _______________, 20____, between Trustor (as the Developer) and Beneficiary (as the City) (the "DDA"), which provides in part for Beneficiary to convey certain real property (the "Site") to Trustor, for development of a low-income senior housing project (the "Housing Project"), all as more fully set forth in the DDA. All capitalized terms not defined herein shall have the meaning set forth in the DDA.

Pursuant to the DDA, Trustor executed and delivered to Beneficiary a promissory note (the "Note"), in the principal amount of NINE HUNDRED TEN THOUSAND DOLLARS ($910,000.00) evidencing the Purchase Price paid by Trustor for the Site. The following provisions are made a part of the Deed of Trust:

1. No Discrimination. The Trustor covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Trustor itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property.

2. Nondiscrimination Clauses. All deeds, leases or contracts made relative to the Property, the improvements thereon or any part thereof, shall contain or be subject to the nondiscrimination clauses set forth in California Health and Safety Code Section 33436.

3. Subordination. Beneficiary agrees that the terms and conditions of the Note and this Deed of Trust shall be subject to and subordinate to the terms and conditions of financing obtained by Trustor through a lender approved by Beneficiary for the development of the Housing Project pursuant to a subordination agreement executed by the Beneficiary and such lender; provided the total aggregate amount of financing secured by Trustor, whether secured through the Tax Credit Financing or other alternative financing sources, for the construction of the Housing Project, together with the Note shall not exceed the appraised value of the Housing Project, unless otherwise approved by the City; and provided, further, that if such Tax Credit Financing or alternative financing is not provided pursuant to an adopted federal or state program, such lender shall agree to include in its deed of trust and/or subordination agreement the following conditions or such other conditions as may be acceptable to Beneficiary in its sole and absolute discretion:
(i) Beneficiary shall receive any notices of default issued by such lender to Trustor; (ii) Beneficiary shall have the right to cure any default by Trustor within forty-five (45) days after a notice of default; (iii) Beneficiary shall have the right to foreclose under its Deed of Trust without the lender Attachment No. 9
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accelerating its debt, provided Beneficiary has cured or is attempting to cure any defaults under such lender's deed of trust; and (iv) Beneficiary shall have the right to transfer the Project to a nonprofit corporation who shall own and operate the Housing Project as an affordable rental housing project with the consent of such lender, which consent shall not be unreasonably withheld.

4. Default. Notwithstanding any other provisions in this Deed of Trust, the occurrence of any of the following shall constitute an event of default under the Note and this Deed of Trust, and a default may be declared under this Deed of Trust solely upon the occurrence of any of the following: (i) Any failure by Trustor to pay any amount due under the Note within fifteen (15) days of its due date; or (ii) Any default by Trustor under the terms of the DDA after expiration of applicable notice and cure periods; or (iii) Any sale or transfer of the Property or any portion thereof in violation of the provisions of the DDA and, to the extent applicable, the Affordable Housing Covenant ("Affordable Housing Covenant") to be recorded against the Property; or (iv) Any other default by Trustor under the terms of the Affordable Housing Covenant provisions.

5. Hazardous Substances.
(a) As used in this Section 5, the following terms shall have the following meanings:
(i) "Environmental Laws" means all statutes, ordinances, orders, rules, regulations, plans, policies or decrees and the like now or hereafter in effect relating to (A) Hazardous Substance Activity or Hazardous Substances; (B) the generation, use, storage, transportation or disposal of Hazardous Substances, or solid waste; or (C) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health, safety or welfare, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.) ("CERCLA"); the Hazardous Material Transportation Act (49 U.S.C. Section 180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.); the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); the Clean Air Act (42 U.S.C. Section 740 et seq.); the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.); the Occupational Safety and health Act (29 U.S.C.

Section 651 et seq.); the Safe Drinking Water Act (42 U.S.C. Section 300f et seq.); the PorterCologne Water Quality Control Act (California Water Code Section 13020 et seq.); the Safe Drinking Water and Toxic Enforcement Act of 1986 (California Health & Safety Code Section 25249.5 et seq.); the Hazardous Substance Account Act (California Health & Safety Code Section 25300 et seq.); the Hazardous Waste Control Act (California Health & Safety Code Section 25100 et seq.); The California Environmental Quality Act (California Public Resources Code Section 2100 et seq.); and the rules, regulations and ordinances of the City or County of San Francisco or any applicable federal, state and local agencies or bureaus, as amended from time to time.
(ii) "Foreclosure Transfer" means the transfer of title to all or any part of the Property or the Trust Estate at a foreclosure sale under the Deed of Trust, either pursuant to judicial decree or the power of sale contained in the Deed of Trust, or by deed in lieu of such foreclosure. (iii) "Hazardous Substances" means (A) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws as a "hazardous substance," "hazardous material," "hazardous waste," Attachment No. 9
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"extremely hazardous waste," "acutely hazardous waste," "radioactive waste," "infectious waste," "biohazardous waste," "toxic substance," "pollutant," "toxic pollutant," "contaminant" as well as any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity"; (B) petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) and ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; (C) "hazardous substance" as defined in Section 2782.6(d) of the California Civil Code; (D) "waste" as defined in Section 13050(d) of the California Water Code; (E) asbestos in any form; (F) urea formaldehyde foam insulation; (G) polychlorinated biphenyls (PCBs); (H) radon; and (I) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment.

Notwithstanding the foregoing, “Hazardous Substances” shall not include any chemical, compound, material, mixture or substance used in the normal course of constructing or operating an apartment complex, so long as such chemical, compound, material, mixture or substance is used in accordance with environmental laws
(iv) "Hazardous Substance Activity" means any actual, proposed, or threatened use, storage, holding, existence, location, release (including, without limitation, any spilling, leaking, leaching, pumping, pouring, emitting, emptying, dumping, disposing into the environment, and the continuing migration into or through soil, surface water, groundwater or any body of water or the air), discharge, deposit, placement, generation, processing, construction, treatment, abatement, removal, disposal, disposition, handling, or transportation of any Hazardous Substance from, under, in, into, or on the Property, including without limitation, the movement or migration of any Hazardous Substances from surrounding property, surface water, groundwater or any body of water, or the air under, in, into or onto the Property and any residual Hazardous Substances contamination in, on, or under the Property.
(v) "Losses" means all charges, losses, liabilities, damages (whether actual, consequential, punitive, or otherwise denominated), costs, fees, demands, claims for personal injury or real or personal property damage), actions, administrative proceedings (including informal proceedings), judgments, causes of action, assessments, fines, penalties, costs, and expenses of any kind or character, foreseeable and unforeseeable, liquidated and contingent, proximate and remote, including, without limitation, the following: (A) the reasonable fees and expenses of outside legal counsel; (B) the reasonable fees and expenses of accountants, third-party consultants, and other independent contractors retained by an Beneficiary; (C) costs, including capital, operating and maintenance costs, incurred in connection with any investigation or monitoring of site conditions or any clean-up, remedial, removal or restoration work required or performed by any federal, state or local governmental agency or political subdivision or performed by any non-governmental entity or person that is required by Environmental Laws or administrative ruling or directive because of the presence, suspected presence, release or suspected release of Hazardous Substances in violation of Environmental Laws in the air, soil, surface water or groundwater at the Property; (D) any and all diminution in value of the Property, loss of use or Attachment No. 9
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damage to the Property, or loss of profits or loss of business opportunity; and (E) reasonable costs and expenses of enforcing this Section 6.09.
(vi) "Environmental Losses" means Losses rising out of or as a result of: (A) the occurrence of any Hazardous Substance Activity; (B) any violation of any applicable Environmental laws relating to the Property or to the ownership, use, occupancy or operation thereof; (C) any investigation, inquiry, order, hearing, action, or other proceeding by or before any governmental agency in connection with any Hazardous Substance Activity; or (D) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which directly or indirectly relates to, arises from or is based on any of the matters described in clauses (A), (B), or (C), or any allegation of any such matters. (b) Trustor represents and warrants to Beneficiary that Trustor has conducted as appropriate inquiry and investigation, and, to the best of Trustor's knowledge, based on such inquiry and investigation, no portion of the Property is being used or has ever been used at any previous time, for the disposal, storage, treatment, processing or other handling of Hazardous Substances, nor have any Hazardous Substances migrated onto or from the Property. Neither the Property nor Trustor is in violation of or subject to any existing, pending or threatened investigation by any governmental authority under any Environmental Law. Trustor's intended use of the Property will not result in the disposal or release of any Hazardous Substances on, under, about or to the Property or the migration of any Hazardous Substances from the Property. The foregoing representations and warranties shall be continuing and shall be true and correct for the period from the date hereof to the release of this Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these representations and warranties shall survive such release.
(c) Trustor represents and warrants to Beneficiary that Trustor has complied with all recommendations by any engineers retained by Trustor and all requirements of any applicable department of environmental resources, environmental protection agency or similar governmental agency, and there are no recommendations by said engineers or requirements ordered by said agency or any other governmental body for environmental investigation or cleanup with respect to the Property.
(d) On and after the date hereof, Trustor shall not: (a) allow any Hazardous Substances to be installed, used, introduced, stored, treated, disposed of, generated, manufactured, discharged, dumped, transported or brought in, upon or over the Property in violation of applicable law; (b) allow any soil or ground water contamination or pollution with any Hazardous Substances on the Property in violation of applicable law; (c) allow any Hazardous Substances to migrate from the Property in violation of applicable law; (d) allow any Hazardous Substances to migrate onto the Property from any adjacent properties in violation of applicable law; or (e) allow or cause the Property to be in violation of, or to trigger a duly initiated and prosecuted investigation of the Property by any governmental authority under applicable limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules or timetables contained in any local, state and/or federal laws, regulations, codes, ordinances, plans, administrative or judicial orders, decrees, judgments, notices or demand letters issued, entered, promulgated or approved thereunder relating to the environment, land use, water and air quality and Hazardous Substances ("Environmental Requirements").

Attachment No. 9
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(e) If the presence of any Hazardous Substances on the Property caused or permitted by Trustor results in any contamination of the Property, Trustor shall promptly take all actions, at its sole expense, as are necessary to return the Property to the condition existing prior to the introduction of any such Hazardous Substances to the Property; provided that Beneficiary's approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse long-term or short-term effect on the Property.
(f) At any time after the occurrence and during the continuance of any default under this Section 5, Beneficiary shall have the following rights and remedies, in addition to any other rights and remedies Beneficiary has under this Deed of Trust:
(i) As provided in California Code of Civil Procedure Section 564, Beneficiary or its employees, acting by themselves or through a court appointed receiver may do any of the following: (i) enter upon, possess, manage, operate, dispose of, and contract to dispose of the Property or any part thereof; (ii) take custody of all accounts; (iii) negotiate with governmental authorities with respect to the Property's environmental compliance and remedial measures; (iv) take any action necessary to enforce compliance with environmental provisions, including spending Rent Payments to abate any environmental problem; (v) make, terminate, enforce or modify leases of part or all of the Property; (vi) contract for goods and services, hire agents, employees, and counsel, make repairs, alterations, and improvements to the Property necessary in Beneficiary's judgment to protect or enhance the security hereof; and/or (vii) take any and all other actions which may be necessary or desirable to comply with Trustor's obligations hereunder and under the Loan Documents. All sums realized by the receiver or Beneficiary under this subparagraph, less all costs and expenses incurred by either of them under this subparagraph, including attorneys' fees, and less such sums as Beneficiary or the receiver deems appropriate as a reserve to meet future expenses under this subparagraph, shall be applied on any indebtedness secured hereby in such order as Beneficiary shall determine. Neither application of said sums to said indebtedness, nor any other action taken by Beneficiary or the receiver under this subparagraph shall cure or waive any default or notice of default hereunder, or nullify the effect of any such notice of default. Beneficiary, or any employee or agent of Beneficiary, or a receiver appointed by a court, may take any action or proceeding hereunder without regard to the adequacy of the security for the indebtedness secured hereunder, the existence of a declaration that the indebtedness secured hereby has been declared immediately due and payable, or the filing of a notice of default.
(ii) With or without notice, and without releasing Trustor from any obligation hereunder, to cure any default of Trustor or in connection with any such default, Beneficiary or its agents, acting by themselves or through a court-appointed receiver, may enter upon the Property or any part thereof and perform such acts and things as Beneficiary deems necessary or desirable to inspect, investigate, assess, and protect the security hereof, including of any of Beneficiary's other rights: (i) to obtain a court order to enforce Beneficiary's right to enter and inspect the Property under California Civil Code Section 2929.5 (in respect of which the decision of Beneficiary as to whether there exists a release or threatened release of hazardous substance, as defined therein, onto the Property shall be deemed reasonable and conclusive as between the parties hereto); and (ii) to have a receiver appointed under California Code of Civil Procedure Section 564 to enforce Beneficiary's right to enter and inspect the Property for hazardous Attachment No. 9
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substances as defined therein. All costs and expenses incurred by Beneficiary with respect to the audits, tests, inspections, and examinations which Beneficiary or its agents or employees may conduct, including the fees of engineers, laboratories, contractors, consultants, and attorneys, shall be paid by Trustor. All costs and expenses incurred by Trustee and Beneficiary pursuant to this subparagraph (including court costs, consultant fees and attorney fees, whether incurred in litigation or not and whether before or after judgment) shall bear interest at the Note Rate, from the date they are incurred until said sums have been paid. (iii) Beneficiary may seek a judgment that Trustor has breached its covenants, representations and/or warranties with respect to the environmental matters set forth above in this Section 5, by commencing and maintaining an action or actions in any court of competent jurisdiction for breach of contract pursuant to California Code of Civil Procedure Section 736, whether commenced prior to foreclosure of the Property or after foreclosure of the Property, and to seek the recovery of any and all costs, damages, expenses, fees, penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket costs or expenses actually incurred by Beneficiary or advanced by Beneficiary (collectively, the "Environmental Costs") relating to the cleanup, remediation or other response action required by applicable law or which Beneficiary believes necessary to protect the Property, it being conclusively presumed between Beneficiary and Trustor that all such Environmental Costs incurred or advanced by Beneficiary relating to the cleanup, remediation, or other response action respecting the Property were made by Beneficiary in good faith. All Environmental Costs incurred by Beneficiary under this subparagraph (including court costs, consultant fees and attorney fees, whether incurred in litigation or not and whether before or after judgment) shall bear interest at the Note Rate, from the date of expenditure until said sums have been paid. Beneficiary shall be entitled to bid, at any sale of the Property held hereunder, the amount of said costs, expenses and interest in addition to the amount of the other obligations hereby secured as a credit bid, the equivalent of cash. (iv) As provided in California Code of Civil Procedure Section 726.5, Beneficiary may waive its lien against the Property or any portion thereof, to the extent such property is found to be environmentally impaired as defined therein, and to exercise any and all rights and remedies of an unsecured creditor against Trustor and all of Trustor's assets and property for the recovery of any deficiency and Environmental Costs, including seeking an attachment order under California Code of Civil Procedure Section 483.010. Beneficiary and Trustor each represents and warrants for itself that it has no actual knowledge of any release of any Hazardous Substance (as defined in Section 726.5) on, to or under the Property. As between Beneficiary and Trustor, for purposes of California Code of Civil Procedure Section 726.5, Trustor shall have the burden of proving that Trustor or any related party (or any affiliate or agent of Trustor or any related party) did not cause or contribute to, and was not in any way negligent in permitting, any release or threatened release of the Hazardous Substance.
(v) Trustor acknowledges and agrees that notwithstanding any term or provision contained herein or in the Loan Documents, the Environmental Costs and all judgments and awards entered against Trustor pursuant to Section 5(f)(iv) above shall be exceptions to any nonrecourse or exculpatory provision of the Loan Documents, and Trustor shall be fully and personally liable for the Environmental Costs and such judgments and awards and such liability shall not be limited to the original principal amount of the obligations secured by this Deed of Trust, and Trustor's Attachment No. 9
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obligations shall survive the foreclosure, deed in lieu of foreclosure, release, reconveyance, or any other transfer of the Property or this Deed of Trust.
(g) Trustor hereby agrees to indemnify, defend and hold harmless Beneficiary from and against any and all Environmental Losses.
_______________________, 20____ ___________, a California limited partnership By:

Name: ______________________________
Its:
"TRUSTOR"
CITY OF CRESCENT CITY, a municipal
corporation
________________________________
By: Eric Wier, City Manager
ATTEST:
________________________________
Robin Altman, City Clerk
"BENEFICIARY"
Attachment No. 9
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STATE OF CALIFORNIA }
COUNTY OF _____________}
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.

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. [seal]
__________________________________
Signature
Attachment No. 9
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STATE OF CALIFORNIA }
COUNTY OF ____________}
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.

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. [seal]
__________________________________
Signature

Crescent City City CouncilJuly 24, 2023

Crescent City City Council
July 24, 2023