Agenda packet — Lancaster City Council, November 14, 2023 (part 3 of 3)

WHEREAS, for the foregoing reasons, the Project does not require voter approval under Article XXXIV of the State Constitution; and
WHEREAS, the Developer has submitted to the Authority and the City Council of the City of Lancaster (“City Council”) copies of the Agreement substantially in the form submitted herewith; and
WHEREAS, a joint public hearing of the Authority and City Council on the proposed Agreement was duly noticed; and
WHEREAS, the proposed Agreement, and a summary report substantially in the form described by Health and Safety Code Section 33433 (“Summary Report”), were available for public inspection prior to the joint public hearing; and WHEREAS, on November 14, 2023, the governing board of the Authority and the City Council held a public hearing on the proposed Agreement, at which time the City Council and the Authority reviewed and evaluated all of the information, testimony, and evidence presented during the joint public hearing; and
WHEREAS, all actions required by all applicable law with respect to the proposed Agreement have been taken in an appropriate and timely manner; and WHEREAS, the City Council has reviewed the Summary Report and has evaluated other information provided to it pertaining to the findings proposed to be made hereunder; and WHEREAS, the City Council has previously determined, in its adoption of the ordinance approving the Redevelopment Project, that the Site is a portion of a blighted area, and is underutilized, as further set forth in the Implementation Plan as previously adopted and amended by the former Redevelopment Agency; and
WHEREAS, the Agreement would assist in the alleviation or removal of blighting conditions, would promote the affordable housing objectives of the City by providing for the provision of improvements and the operation of certain uses as provided in the Agreement; and WHEREAS, the designation of the property as exempt surplus does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under CEQA pursuant to State CEQA Guidelines, 15060(c)(3), because it is not a project as defined by the CEQA Guidelines, Section 15378. The recommended actions for the DDA approval have been reviewed pursuant to the CEQA requirements under Title 14 of the California Code of Regulations (CCR) and the actions have been determined to be exempt per CEQA Guidelines §15312, §15332, and §15061(b)(3). There are no federal actions, therefore, NEPA does not apply; and
WHEREAS, the Authority and the City Council have duly considered all of the terms and conditions of the proposed Agreement and believes that the redevelopment of the Site pursuant to the Agreement is in the best interests of the City of Lancaster and the health, safety, and Resolution No.

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welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements.

NOW, THEREFORE, BE IT RESOLVED BY THE LANCASTER HOUSING AUTHORITY, AS FOLLOWS:

Section 1. The City Council finds and determines that the statements set forth in the Recitals above are true, correct and a substantive part of this Resolution.

Section 2. The City Council hereby finds that the use of funds from the former Redevelopment Agency’s Low- and Moderate-Income Housing Fund and the Permanent Local Housing Allocation Fund pursuant to the Agreement, will be of benefit to the Project Area for the reasons set forth above.

Section 3. The City Council hereby determines that voter approval is not required by Article XXXIV of the State Constitution for the reasons set forth above. This Resolution is hereby deemed to constitute a final approval of a proposal which may result in housing assistance benefiting persons of low-income, within the meaning of Health and Safety Code Section 36005.

Section 4. The City Council hereby finds and determines that the Agreement is consistent with the provisions and goals of the City for provision of affordable housing.

Section 5. The City Council hereby finds and determines that the disposition of the Site by the Authority pursuant to the Agreement will promote the affordable housing objectives of the Authority and will eliminate blight within the Project Area by providing for the proper reuse and redevelopment of the Project Area which was declared blighted.

Section 6. The City Council hereby finds and determines that the Agreement is consistent with the provisions and goals of the Implementation Plan as previously adopted by the Redevelopment Agency.

Section 7. The City Council consents that the City Manager (or his designee) may, on behalf of the City, make revisions to the Agreement which do not materially or substantially increase the City’s obligations thereunder or materially or substantially change the uses or development permitted on the Site, to sign all documents, to make all approvals and take all actions necessary or appropriate to carry out and implement the Agreement and to administer the City’s obligations, responsibilities and duties to be performed under the Agreement and related documents.

Section 8. The City Council consents that the City Manager (or his designee) is hereby authorized, on behalf of the Authority, to make revisions to the Agreement which do not materially or substantially increase the Authority’s obligations thereunder or materially or substantially change the uses or development permitted on the Site, to sign all documents, to make all approvals and take all actions necessary or appropriate to carry out and implement the Agreement and to administer the Authority’s obligations, responsibilities and duties to be performed under the Agreement and related documents.

Resolution No.

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Section 9. Authority staff has determined that the designation of the property as exempt surplus does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under CEQA pursuant to State CEQA Guidelines, 15060(c)(3), because it is not a project as defined by the CEQA Guidelines, Section 15378. The recommended actions for the DDA approval have been reviewed pursuant to the CEQA requirements under Title 14 of the California Code of Regulations (CCR) and the actions have been determined to be exempt per CEQA Guidelines §15312, §15332, and §15061(b)(3). There are no federal actions, therefore, NEPA does not apply; and Section 10. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

Section 11. Effective Date. This Resolution shall become effective immediately.

Resolution No.

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PASSED, APPROVED, and ADOPTED this ____________, 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST: APPROVED:
____________________________ _______________________
ANDREA ALEXANDER R. REX PARRIS
City Clerk Mayor
City of Lancaster City of Lancaster

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss

CITY OF LANCASTER )

CERTIFICATION OF RESOLUTION

CITY COUNCIL
I, __________________________, __________________________ City of Lancaster, California, do hereby certify that this is a true and correct copy of the original Resolution No. , for which the original is on file in my office.

WITNESS MY HAND AND THE SEAL OF THE CITY OF LANCASTER, on this _________ day of ________________, 2023.
(seal)
___________________________________
RESOLUTION NO.

A RESOLUTION OF THE LANCASTER HOUSING

AUTHORITY DECLARING CERTAIN PROPERTY IN THE

CITY OF LANCASTER IS EXEMPT SURPLUS LAND AND

APPROVING A DISPOSITION AND DEVELOPMENT

AGREEMENT BY AND BETWEEN THE AUTHORITY AND
SARAH’S CARE HOME
WHEREAS, the Lancaster Housing Authority (“Authority”) is the owner in fee simple of certain vacant parcels identified as Assessor Parcel Numbers 3123-016-905 and -906 (“Authority Property”); and
WHEREAS, the Authority no longer has any use for the Authority owned property; and WHEREAS, the exact affordability of proposed project will be subject to the final funding secured by Developer to construct the proposed affordable housing project, any affordability alterations will be reflected in the Regulatory Agreement; and WHEREAS, pursuant to the DDA, a condition precedent to Authority allowing Close of Escrow is Developer’s evidence of financing to construct an affordable housing project, and the DDA requires Developer to covenant that the proposed project be used, maintained and operated in compliance with a Regulatory Agreement to be negotiated between the Housing Authority and Developer for a 100% affordable housing project; and
WHEREAS, the Authority Property is “surplus land” under the Act, because it is land owned in fee simple by the Authority for which the Authority will take formal action (in the form of adoption of this resolution) in a regular public meeting declaring that the land is surplus and is not necessary for the City’s use; and
WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 formerly authorized and directed the Lancaster Redevelopment Agency (“Redevelopment Agency”) to expend a certain percentage of all taxes which are allocated to the Redevelopment Agency pursuant to Section 33670 of the California Health and Safety Code for the purposes of increasing, improving and preserving the community’s supply of low- and moderate-income housing available at affordable housing cost to persons and families of low- and moderate- income, lower income, and very low-income; and
WHEREAS, pursuant to applicable law, the Redevelopment Agency established a Low- and Moderate-Income Housing Fund (“Housing Fund”) and acquired certain property with the purpose of using such property for the provision of affordable housing development opportunities; and
WHEREAS, by ABx1 26 enacted by the California Legislature during 2011 (“2011 Dissolution Act”), the California Legislature disbanded all redevelopment agencies within the State of California effective as of February 1, 2012, including without limitation the Redevelopment Agency; and
Resolution No.

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WHEREAS, the 2011 Dissolution Act provides, in part, that the host city of a redevelopment agency was to designate a housing entity to receive the housing assets of the former redevelopment agency within such city; and
WHEREAS, the City Council of the City of Lancaster (“City”) designated the Lancaster Housing Authority (“Authority”) as the housing entity to receive the housing assets of the former Redevelopment Agency; and
WHEREAS, to address the Authority’s objectives of providing affordable housing, Sarah’s Care Home has proposed to acquire from the Authority certain property identified as Assessor Parcel Numbers 3123-016-905 and -906 (“Site”), to construct a minimum of sixty-five (65) units (“Project”); and
WHEREAS, in order to implement the affordable housing objectives of the Authority, the Authority proposes to enter into a Disposition and Development Agreement (“Agreement”) with the Developer, pursuant to which the Authority would sell the Site to the Developer and the Developer would agree to construct the Project in accordance with the Agreement, restrict the purchase of certain units in the Project to very low-income households and low-income households, all as more particularly set forth in the Agreement; and WHEREAS, the Project is located within the project area (“Project Area”) of Lancaster Redevelopment Project Area No. 5, Lowtree Project Area (“Redevelopment Project”) of the former Redevelopment Agency and the acquisition, construction and operation of the Project pursuant to the Agreement would benefit the Project Area by providing affordable housing for persons who currently live and work within the Project Area; and WHEREAS, the Redevelopment Agency previously adopted an Implementation Plan pursuant to Health and Safety Code Section 33490, which set forth the objective of providing housing to satisfy the needs and desires of various constituent elements of the community; and WHEREAS, the Agreement furthers the goals of the Authority as well as the goals of the former Redevelopment Agency as set forth in the Implementation Plan as it will facilitate the creation of affordable housing which will serve the residents of the neighborhood and the City as described in the Agreement; and
WHEREAS, the California Legislature has declared in Health and Safety Code Section 36000, et seq., that new forms of cooperation with the private sector, such as leased housing, disposition of real property acquired through redevelopment, development approvals, and other forms of housing assistance may involve close participation with the private sector in meeting housing needs, without amounting to development, construction or acquisition of low rent housing projects as contemplated under Article XXXIV of the State Constitution; and WHEREAS, Health and Safety Code Section 37001.5 provides that a public body does not develop, construct or acquire a low rent housing project under Article XXXIV of the State Constitution when the public body provides assistance to a low rent housing project and monitors construction or rehabilitation of the project to the extent of carrying out routine governmental Resolution No.

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functions, performing conventional activities of a lender, and imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of assistance; and WHEREAS, for the foregoing reasons, the Project does not require voter approval under Article XXXIV of the State Constitution; and
WHEREAS, under the Agreement, the Developer shall purchase the Site from the Authority at the price described in a report to the Authority and City Council concerning the Agreement made substantially in the manner described by Section 33433 of the California Health and Safety Code (“Report”); and
WHEREAS, the Developer has submitted to the Authority and the City Council of the City of Lancaster (“City Council”) copies of the Agreement substantially in the form submitted herewith; and
WHEREAS, a joint public hearing of the Authority and City Council on the proposed Agreement was duly noticed; and
WHEREAS, the proposed Agreement, and a summary report substantially in the form described by Health and Safety Code Section 33433 (“Summary Report”), were available for public inspection prior to the joint public hearing; and WHEREAS, on November 14, 2023, the governing board of the Authority and the City Council held a public hearing on the proposed Agreement, at which time the City Council and the Authority reviewed and evaluated all of the information, testimony, and evidence presented during the joint public hearing; and
WHEREAS, all actions required by all applicable law with respect to the proposed Agreement have been taken in an appropriate and timely manner; and WHEREAS, the Authority has reviewed the Summary Report and has evaluated other information provided to it pertaining to the findings proposed to be made hereunder; and WHEREAS, the City Council has previously determined, in its adoption of the ordinance approving the Redevelopment Project, that the Site is a portion of a blighted area, and is underutilized, as further set forth in the Implementation Plan as previously adopted and amended by the former Redevelopment Agency; and
WHEREAS, the Agreement would assist in the alleviation or removal of blighting conditions, would promote the affordable housing objectives of the Authority and would further the goals of the Implementation Plan by providing for the provision of improvements and the operation of certain uses as provided in the Agreement; and WHEREAS, the designation of the property as exempt surplus does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under CEQA pursuant to State CEQA Guidelines, 15060(c)(3), because it is not a project as defined by the CEQA Guidelines, Section 15378. The recommended actions for the DDA approval have been reviewed pursuant to the CEQA requirements under Title 14 of the Resolution No.

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California Code of Regulations (CCR) and the actions have been determined to be exempt per CEQA Guidelines §15312, §15332, and §15061(b)(3). There are no federal actions, therefore, NEPA does not apply; and
WHEREAS, the Authority and the City Council have duly considered all of the terms and conditions of the proposed Agreement and believes that the redevelopment of the Site pursuant to the Agreement is in the best interests of the City of Lancaster and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements.

NOW, THEREFORE, BE IT RESOLVED BY THE LANCASTER HOUSING AUTHORITY, AS FOLLOWS:

Section 1. The Authority finds and determines that the statements set forth in the Recitals above are true, correct and a substantive part of this Resolution.

Section 2. The Authority hereby finds that the use of funds from the former Redevelopment Agency’s Low- and Moderate-Income Housing Fund and the Permanent Local Housing Allocation Fund pursuant to the Agreement, will be of benefit to the Project Area for the reasons set forth above.

Section 3. The Authority hereby determines that voter approval is not required by Article XXXIV of the State Constitution for the reasons set forth above. This Resolution is hereby deemed to constitute a final approval of a proposal which may result in housing assistance benefiting persons of low-income, within the meaning of Health and Safety Code Section 36005.

Section 4. The Authority finds and determines that, based upon substantial evidence provided in the record before it, the consideration for the Authority’s disposition of the Site pursuant to the terms and conditions of the Agreement is not less than the fair reuse value at the use and with the covenants and conditions and development costs authorized by the Agreement.

Section 5. The Authority hereby finds and determines that the disposition of the Site by the Authority pursuant to the Agreement will promote the affordable housing objectives of the Authority and will eliminate blight within the Project Area by providing for the proper reuse and redevelopment of the Project Area which was declared blighted.

Section 6. The Authority hereby finds and determines that the Agreement is consistent with the provisions and goals of the Implementation Plan as previously adopted by the Redevelopment Agency.

Section 7. The Authority hereby approves the Agreement in substantially the form presented to the Authority, subject to such revisions as may be made by the Executive Director of the Authority or his designee. The Executive Director of the Authority is hereby authorized to execute the Agreement (including without limitation all attachments thereto) on behalf of the Authority. A copy of the Agreement when executed by the Authority shall be placed on file in the office of the Secretary of the Authority.

Resolution No.

Page 5 ends

Section 8. The Executive Director of the Authority (or his designee) is hereby authorized, on behalf of the Authority, to make revisions to the Agreement which do not materially or substantially increase the Authority’s obligations thereunder or materially or substantially change the uses or development permitted on the Site, to sign all documents, to make all approvals and take all actions necessary or appropriate to carry out and implement the Agreement and to administer the Authority’s obligations, responsibilities and duties to be performed under the Agreement and related documents.

Section 11. Effective Date. This Resolution shall become effective immediately.

Resolution No.

Page 6 ends

PASSED, APPROVED, and ADOPTED this ____________, 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST: APPROVED:
____________________________ _______________________

ANDREA ALEXANDER KITTY KIT YEE SZETO
City Clerk Chair
City of Lancaster Lancaster Housing Authority

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss

CITY OF LANCASTER )

CERTIFICATION OF RESOLUTION

WITNESS MY HAND AND THE SEAL OF THE CITY OF LANCASTER, on this _________ day of ________________, 2023.
(seal)
___________________________________
INFORMATION SUMMARY (33433 REPORT)

FOR THE

DISPOSITION AND DEVELOPMENT AGREEMENT
WITH
SARAH’S CARE HOME
This summary is prepared pursuant to Section 33433 of the California Health and Safety Code.

1. Background:

With City Council’s direction, the parcels were acquired by the former Lancaster Redevelopment Agency (“Agency”) for redevelopment purposes. The parcels were purchased using low- and moderate-income housing funds in the early 2000s. The Lancaster Housing Authority (“Authority”) began the process of revitalization by demolishing dilapidated buildings, clearing the land, and preparing the parcels for income- eligible households. In 2012, the properties were transferred to the Lancaster Housing Authority upon the dissolution of the Redevelopment Agency pursuant to a housing asset transfer form as required under the California Health & Safety Code Section 34176(a) (2).

Sarah’s Care Home (Developer) proposes to develop land owned by the Authority located at the southwest corner of Kingtree Avenue and Avenue J-2. The proposed project is located in District Edge sub-district within the Lancaster Health District Master Plan area.

The District Edge zone is envisioned to provide a variety of urban housing choices that would support a comfortable pedestrian public realm, supported by public transportation and neighborhood-serving retail and service uses. The Developer envisions that the Property will be developed into no fewer than sixty-five (65) residential units of multi- family housing units for seniors. It is anticipated that the housing units will be financed with grant funds from the California Department of Health Care Services (DHCS) and California Department of Social Services (CDSS) Community Care Expansion Program and/or another affordable housing financing sources, with rents based on County of Los Angeles Affordable Financing guidelines.

The purpose of the Disposition and Development Agreement (Agreement) is to implement the City’s objective of improving and increasing the supply of affordable housing in the City of Lancaster.

The DDA is an agreement between the Authority and the developer for the sale and development of the Site. The DDA governs the Developer’s obligations with respect to the acquisition of the land, requirements for closing, and schedule of performance, and provides a legal framework for addressing default.

The applicant for Sarah’s Care Home will be submitting an application to Planning within the next few months. The developer plans to break ground in April 2024.

2. Cost of the Agreement to the former Agency/Authority:

The former Agency purchased these properties using Low- and Moderate-Income Housing Funds in the early 2000s. The total acquisition/demolition cost was $5,430,668.00±.

The Developer has agreed to purchase the Property for $1,300,000.00, which is based on an independent appraisal.

The total cost to the former Agency and the Authority is approximately $4,103,668.00.

3. Estimated value of interest to be conveyed at highest and best use permitted by the Redevelopment Plan:

The estimated value of the interest to be conveyed is $1,300,000, which is based on an independent appraisal.

4. The estimated value of interest to be conveyed at the use and with the conditions, covenants, and restrictions required by the DDA:

The analysis of the “estimated value of interest” must consider the fair market value of the property, the Authority’s obligation to assist with a growing need within the community to provide affordable housing to families of various ages and income levels, and the DDA’s condition that all the units through deed restrictions will remain affordable for thirty (30) years. Therefore, the value of the properties with affordable housing covenants and restrictions in the proposed DDA is less than zero. Specifically, without subsidies, the below-market rate rents required by the DDA would not generate enough income to support the development costs of the project.

5. The Disposition is for not less than the full market appraised value at the use and with the covenants, conditions, and development costs authorized by the sale: Impact of affordable housing on conveyance price:

The primary purpose of this disposition of the Authority-owned land is to develop the parcels for uses consistent with the City’s Housing Element that encourages infill development, enhancing and preserving existing neighborhoods, increasing affordable housing, and eliminating blight. To accomplish this, the Agreement provides that the Authority will transfer its interest in the parcels, at its fair market value, to the Developer upon the express condition that the Developer will develop the parcels for the uses described in the Agreement.

Restricted rents at or below 80% of the Area Median Income significantly reduce the potential value of the project. In turn, this reduction directly reduces the residual value of the land compared to market-rate projects. Given these circumstances, the Project cannot support the sale of the property at the highest and best market value.

6. Explanation as to the reason why the sale of the Site will assist in the elimination of blight:

The Project will consist of the development of a minimum of sixty-five (65) Residential Units of multi-family housing for seniors which are subject to long-term income and affordability restrictions. In accordance with the California Redevelopment Law, as portrayed in the California Health and Safety Code Section 33433, the conveyance of a property that results in the provision of housing for low- or moderate-income persons satisfies the blight elimination criteria imposed by Section 33433. Thus, the scope of development required by the Agreement fulfills the blight elimination requirement. 4885-1338-3052v2/022283-0545

DISPOSITION AND DEVELOPMENT AGREEMENT
by and between

LANCASTER HOUSING AUTHORITY
and

RACINE SHIRLEY INVESTMENTS LLC
APNs: 3123-016-905 and -906
i
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TABLE OF CONTENTS

1. INTRODUCTORY PROVISIONS .....................................................................................2

1.1 Definitions................................................................................................................2

1.2 Representations and Warranties...............................................................................7 (a) Authority Representations. ..........................................................................7 (b) Developer’s Representations. ......................................................................9

1.3 Transfers of Interest in Authority Parcel or Agreement. .......................................10 (a) Prohibition. ................................................................................................10 (b) Permitted Transfers....................................................................................10 (c) Authority Consideration of Requested Transfer........................................11 (d) Successors and Assigns..............................................................................11 (e) Assignment by Authority...........................................................................12

2. ACQUISITION OF AUTHORITY PARCEL...................................................................12

2.1 Purchase Price of the Authority Parcel. .................................................................12

2.2 Waiver and Release................................................................................................12

2.3 City and Other Governmental Agency Permits. ....................................................12

2.4 Purchase Escrow. ...................................................................................................13 (a) Costs of Escrow. ........................................................................................13 (b) Escrow Instructions....................................................................................13 (c) Authority of Escrow Agent........................................................................13 (d) Closing. ......................................................................................................14 (e) Termination................................................................................................14 (f) Closing Procedure......................................................................................15 (g) Review of Title and Property Diligence. ...................................................15 (h) Title Insurance. ..........................................................................................16 (i) Conditions of Closing. ...............................................................................16 (j) Studies and Reports....................................................................................17 (k) Condition of the Authority Parcel..............................................................18 (l) Taxes and Assessments..............................................................................19

3. DEVELOPMENT OF THE AUTHORITY PARCEL ......................................................19

3.1 Scope of Development...........................................................................................19

3.2 Construction Drawings and Related Documents. ..................................................20 (a) Submission of Development Plans, Construction Drawings and Related Documents. ...................................................................................20 (b) City Process.. .............................................................................................21 (c) Changes in Final Construction Plans, Drawings, Specifications and Related Documents. ...................................................................................21

3.3 Entitlements Approvals..........................................................................................21 (a) Developer to Seek......................................................................................21 (b) Entitlements Challenges.............................................................................21

3.4 Schedule of Performance/Completion of Developer Improvements. ....................22

3.5 Cost of Construction. .............................................................................................23

3.6 Bodily Injury and Property Damage Insurance. ....................................................23 ii
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3.7 Developer’s Indemnity...........................................................................................24

3.8 Rights of Access. ...................................................................................................24

3.9 Compliance With Laws..........................................................................................24 (a) Nondiscrimination in Employment............................................................24 (b) Standards....................................................................................................25 (c) Taxes and Assessments..............................................................................25

3.10 Financing of the Developer Improvements............................................................25 (a) Approval of Financing. ..............................................................................25 (b) No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease-Back for Development. ...................................................................26 (c) Holder Not Obligated to Construct Improvements....................................26 (d) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure............................................................................................................26 (e) Failure of Holder to Complete Improvements...........................................27 (f) Right of the Authority to Cure Mortgage or Deed of Trust Default..........28

3.11 Certificate of Completion. .....................................................................................28

4. USE OF THE AUTHORITY PARCEL ............................................................................28

4.1 Affordable Housing. ..............................................................................................28 (a) Number of Units. .......................................................................................28

4.2 Uses........................................................................................................................29

4.3 Nondiscrimination..................................................................................................29

4.4 Effect of Violation of the Terms and Provisions of this Agreement After Certificate of Occupancy Issued and Developer’s Financing Converts to Permanent Financing. ............................................................................................30

4.5 Maintenance of the Property..................................................................................30

4.6 Long Term Management of the Property...............................................................31

5. DEFAULTS AND REMEDIES ........................................................................................31

5.1 Default Remedies...................................................................................................31

5.2 Institution of Legal Actions. ..................................................................................32

5.3 Termination by Developer. ....................................................................................32

5.4 Termination by Authority. .....................................................................................32 (a) Termination by Authority Prior to Closing................................................32

5.5 Reentry and Revesting of Title in Authority After the Conveyance and Prior to Completion of Construction......................................................................32

5.6 Rights and Remedies Are Cumulative...................................................................34

5.7 Inaction Not a Waiver of Default...........................................................................34

6. GENERAL PROVISIONS ................................................................................................34

6.1 Notices, Demands and Communications Between the Parties. .............................34

6.2 Enforced Delay; Extension of Times of Performance. ..........................................35

6.3 Non-Liability of Officials and Employees of Authority and Developer. ..............35

6.4 Relationship Between Authority and Developer. ..................................................35

6.5 Authority Approvals and Actions. .........................................................................36

6.6 Commencement of Authority Review Period........................................................36

6.7 Counterparts...........................................................................................................36 iii
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6.8 Integration..............................................................................................................36

6.9 Attorneys’ Fees. .....................................................................................................36

6.10 Administration. ......................................................................................................36

6.11 Amendments of Agreement. ..................................................................................37

6.12 Titles and Captions. ...............................................................................................37

6.13 Interpretation..........................................................................................................37

6.14 No Waiver..............................................................................................................37

6.15 Modifications. ........................................................................................................37

6.16 Severability. ...........................................................................................................37

6.17 Computation of Time.............................................................................................37

6.18 Legal Advice..........................................................................................................37

6.19 Time of Essence.....................................................................................................38

6.20 Cooperation............................................................................................................38

6.21 Conflicts of Interest................................................................................................38

6.22 Approval and Execution. .......................................................................................38

6.23 Recordation of Memorandum of Agreement.........................................................38

6.24 Warranty of Authority............................................................................................38

6.25 Commissions..........................................................................................................38

6.26 Applicable Law......................................................................................................39 1 4885-1338-3052v2/022283-0545

DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this “Agreement”) is dated as of November 14, 2023 (the “Effective Date”) and is entered into by and between the LANCASTER HOUSING AUTHORITY, a public body corporate and politic, (the “Authority”), and RACINE SHIRLEY INVESTMENTS LLC, a California limited liability company (“Developer”).

R E C I T A L S
The following recitals are a substantive part of this Agreement; capitalized terms used herein and not otherwise defined are defined in Section 1.1 of this Agreement:

A. Sections 33334.2 and 33334.6 of the California Health and Safety Code formerly authorized and directed the Lancaster Redevelopment Agency (the “Redevelopment Agency”) to expend a certain percentage of all taxes which are allocated to the Redevelopment Agency pursuant to Section 33670 of the California Health and Safety Code for the purposes of increasing, improving and preserving the community’s supply of low and moderate income housing available at affordable housing cost to persons and families of low- and moderate-income, lower income, and very low income.

B. By ABx1 26 enacted by the California Legislature during 2011 (the “2011 Dissolution Act”), the California Legislative eliminated every redevelopment agency within the State of California, including without limitation the Redevelopment Agency. The 2011 Dissolution Act provides, in part, that the host city of a redevelopment agency was to designate a housing entity to receive the housing assets of the former redevelopment agency within such city.

The City Council of the City of Lancaster (the “City”) designated the Authority as the housing entity to receive the housing assets of the former Redevelopment Agency.

C. To address the Authority’s objectives of providing affordable housing, the Developer has proposed to acquire from the Authority certain property located at the southwest corner of Kingtree Avenue and Avenue J-2 and depicted on Attachment 1A (the “Authority Parcel”), and to construct multi-family affordable housing units. The Developer’s acquisition and development of the Authority Parcel as provided under this Agreement constitutes and is referred to herein collectively as the “Project.”
D. The Project shall be comprised of a minimum of sixty-five (65) Residential Units of multi-family housing for seniors age fifty-five (55)+ in accordance with the Entitlements for the Project. Residential Units are anticipated to be financed with grant funds awarded by the California Department of Health Care Services (“DHCS”), California Department of Social Services (“CDSS”), Community Care Expansion Program and/or other affordable housing financing sources (any of the foregoing “Project Financing”), with rents at or below 80% of area median income (“AMI”) based on County of Los Angeles Affordable Housing guidelines, with AMI percentages to be determined based on Section 50079.5 of the California Health and Safety Code.

E. Construction and operation of the Project pursuant to this Agreement is in the City’s vital and best interest and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws. 2 4885-1338-3052v2/022283-0545
NOW, THEREFORE, the Authority and the Developer agree as follows:

1. INTRODUCTORY PROVISIONS

1.1 Definitions. Capitalized terms used herein shall have the meanings set forth in this Section 1.1:
“Affiliate” means, as to any person or entity, any other person or entity that, (a) directly or indirectly owns ten percent (10%) or more of all equity interests in such person or entity, and/or (ii) is in Control of, is Controlled by or is under common Control with such person, and/or (iii) is a member, managing member, operating member, manager, director, partner, officer or employee of such Person. As used herein the term “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership of voting securities, by contract or otherwise. “Controlled” and “Controlling” shall have correlative meanings.
“Affordability Period” is defined in Section 4.1(b) hereof. “Affordable Rents” shall have the meaning set forth in Health and Safety Code Section 50053, as in effect of the date hereof, as calculated for lower income households. “Agreement” means this Disposition and Development Agreement by and between the Authority and the Developer.
“ALTA” means the American Land Title Association.
“Area Median Income” shall mean the area medium income for Los Angeles County, California, adjusted for household size, as determine pursuant to Health and Safety Code Section 50093, as in effect of the date hereof.
“Authority” means the Lancaster Housing Authority, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the California Housing Authorities Law (Cal. Health & Safety Code § 34200 et seq.). “Authority Deed of Trust” means the deed of trust granted by the Developer to the Authority to secure Developer’s performance under this Agreement. The Authority Deed of Trust shall be automatically subordinate to the lien(s) of any approved financing provided to the Developer for the construction of the Project and shall be recorded at Closing as an encumbrance against the Authority Parcel. The form of the Authority Deed of Trust is attached hereto as Attachment No. 8 and incorporated herein.
“Authority Parcel” means that certain unimproved and vacant real property, which is more particularly described in the Authority Parcel Legal Description. “Authority Parcel Grant Deed” means the grant deeds for the conveyance of the Parcel from the Authority to the Developer, in substantially the form of Attachment No. 2 hereto which is incorporated herein by reference.
3 4885-1338-3052v2/022283-0545
“Authority Parcel Legal Description” means the legal description of the Authority Parcel attached hereto as Attachment No. 1 and incorporated herein. “Authority’s Conditions Precedent” means the conditions precedent to the Closing for the benefit of the Authority, as set forth in Section 2.1(i) as applicable, hereof. “Authority’s Environmental Consultant” is defined in Section 2.1 hereof. “CC&Rs” means the Declaration of Conditions, Covenants and Restrictions attached hereto as Attachment No. 5, which is incorporated herein by reference. “Certificate of Occupancy” shall mean the certificate issued by the official in the City’s Building Department with authority over such issuance subsequent to the approval of the Developer Improvements.
“City” means the City of Lancaster, a California charter city and municipal corporation. “City Attorney” means the City Attorney of the City of Lancaster. “City Code” shall mean the City of Lancaster Municipal Code. “CLTA” means the California Land Title Association.
“Claimant” is defined in Section 5.1 hereof.
“Closing” means the time and day the Authority Parcel Grant Deed for the Authority Parcel is filed for recordation with the Los Angeles County Recorder. “Closing Date” means the day on which the Closing occurs for the Authority Parcel. “Community Redevelopment Law” means California Health and Safety Code Sections 33000, et seq., as the same now exist or may hereafter be amended. “County” means the County of Los Angeles.
“Date of this Agreement” means the Effective Date.
“Default” means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 6.1 hereof.
“Default Notice” is defined in Section 5.1 hereof.
“Developer” means Racine Shirley Investments LLC, a California limited liability company, and any assignee or successor to the Developer permitted pursuant to the terms of this Agreement.
“Developer’s Financing” is defined in Section 2.4(i)(2)(G) 4 4885-1338-3052v2/022283-0545
“Developer Improvements” means the improvements to be constructed by the Developer for the Project as set forth in Section 3.1. and the Scope of Development. “Developer’s Conditions Precedent” means the conditions precedent to the Closing for the benefit of Developer, as set forth in Section 2.4(i)(2) as applicable, of this Agreement. “Developer’s Environmental Consultant” is defined in Section 2.1 hereof. “Development Impact Fees” shall mean and refer only to the following fees imposed by the City: Planning Director’s Fee for Review for Models, Grading Permit Fee, Grading Plan Check Fee, Permit Fee (Building), Plan Review Fee (Building), Permit Issuance Fees, Drainage Annexation Fee, Lighting First Year’s Energy Fee, Landscaping Annexation Fee, Traffic Impact Fee, Traffic Signal Fee, Drainage Fee and Park in Lieu (Park Acquisition) Fee. “Development Plan(s)” is defined in Section 3.2(b) hereof. “Due Diligence Period” means the date commencing on the Effective Date and ending, with respect to each Phase, at 5:00 p.m. on the applicable date set forth in the Schedule of Performance.
“Entitlements” means all land use approvals and entitlements required in connection with the development of the Project and/or any Phase thereof under applicable law, including, without limitation, the California Environmental Quality Act, California Public Resources Code Sections 21000 – 21178, by the City (in the exercise of its governmental power) and any other political subdivision, agency or instrumentality exercising jurisdiction over the Authority Parcel in connection with the development of the Project and/or any Phase thereof. “Entitlements Challenge” means, following the approval and issuance of any Entitlements, (a) any administrative appeal of such approval and issuance filed timely with the City and/or (b) any petition for writ of mandate, complaint, or other action commenced against Developer, the City, or other political subdivision, agency or instrumentality issuing any of such Entitlements in any court with jurisdiction challenging such approval and issuance or the validity of such Entitlements.
“Entitlements Challenge Claims” is defined in Section 3.3(b) below. “Entitlements Challenge Indemnity Deposit is defined in Section 3.3(b) below. “Entitlements Condition” means, that (a) the Entitlements with respect to the applicable portion of the Project have been issued by the City and all other political subdivision, agency or instrumentality exercising jurisdiction over the Authority Parcel, (b) all applicable appeal periods with respect to such issuance have expired without an Entitlements Challenge having been filed or brought, or, if an Entitlements Challenge is filed or brought, such Entitlement Challenge shall have been denied or finally dismissed, as applicable, and (c) the Entitlements remain in full force and effect.
“Environmental Law” means any federal, state, or local law, statute, ordinance or regulation pertaining to environmental regulation, contamination or cleanup of any Hazardous 5 4885-1338-3052v2/022283-0545
Materials, including, without limitation: (i) Sections 25115, 25117, 25122.7 or 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter- Presley-Tanner Hazardous Substance Account Act), (iii) Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vi) Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (vii) Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq. (42 U.S.C. Section 6903) or (viii) Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq. “Escrow” is defined in Section 2 of this Agreement.
“Escrow Agent” is defined in Section 2 of this Agreement. “Final Development Plans” is defined in Section 3.2(a) of this Agreement. “Governmental Requirements” means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the City or any other political subdivision in which the Authority Parcel is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Authority, the Developer or the Authority Parcel including all applicable state labor standards, all applicable laws relating to prevailing wages as set forth in California Labor Code Section 1720 et seq., the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City’s Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C.

Sections 12101, et seq., California Government Code Sections 4450, et seq., California Government Code Sections 11135, et seq., and the Unruh Civil Rights Act, California Civil Code Sections 51, et seq.
“Hazardous Materials” means any substance, material or waste which is or becomes, prior to the Closing, regulated by any local governmental agency, the State of California or the United States Government, including, but not limited to, any material or substance which is (i) defined as a “hazardous waste,” “extremely hazardous waste,” or “restricted hazardous waste” under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) refined petroleum products, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as “hazardous” or “extremely hazardous” pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as “hazardous substances” pursuant to Section 311 of the Clean Water Act (33 6 4885-1338-3052v2/022283-0545
U.S.C. Section 1317), (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq. (42 U.S.C. Section 6903), (xi) Methyl-tert-Butyl Ether or (xi) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq.
“Gross Income” shall mean the gross income of a household or family calculated in accordance with Section 6914 of Title 25 of the California Code of Regulations as in effect on the date hereof.
“Memorandum of Agreement” means the Memorandum of Agreement attached hereto as Attachment No. 7 and incorporated herein by reference. “Outside Date” is defined in Section 3(d) of this Agreement. “Parcel” means and refers to the Authority Parcel.
“Permanent Financing” is defined in Section 4.4.
“Permits” means all demolition, grading, excavation, foundation, building and other non- discretionary administrative permits required by the City and any other applicable governmental agencies in connection with the construction of the Development Improvements. “Permitted Transfer” means a transfer that is described in and permitted by Section 1.3(b) of this Agreement.
“Project” means the Developer’s acquisition of the Authority Parcel and construction of a minimum of sixty-five (65) multi-family Residential Units designated for seniors age fifty-five (55)+, as more fully described in the Scope of Development. Each Residential Unit will be rented to a Qualified Resident at an Affordable Rent.
“Property” means and refers to the Authority Parcel.
“Qualified Resident” means a person or household whose Gross Income is equal to or less than the income limits specified in Section 4.1(a). “Removal Date” is defined in Section 2.4(g) hereof.
“Residential Units” shall mean housing units to be constructed by the Developer on the Authority Parcel as part of the Project, which may be attached or detached homes. “Schedule of Performance” means that certain Schedule of Performance attached hereto as Attachment No. 3 and incorporated herein by reference, setting out the dates and/or time periods by which certain obligations set forth in this Agreement must be accomplished. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between the Developer and the Authority’s Executive Director, and the Authority’s Executive Director is authorized to make such revisions as he or she deems reasonably necessary. 7 4885-1338-3052v2/022283-0545
“Scope of Development” means that certain Scope of Development attached hereto as Attachment No. 4A and incorporated herein by this reference, which describes the scope, amount and quality of the Developer Improvements.
“Title Company” is defined in Section 2.4(g) hereof.
“Title Policies” is defined in Section 2.4(h) hereof.
“Title Reports” is defined in Section 2.4(g) hereof.
“Unavoidable Delay” is defined in Section 6.2 hereof.

1.2 Representations and Warranties.
(a) Authority Representations. The Authority hereby makes the representations and warranties contained below in this section, all of which unless otherwise stated, are effective as of the Date of this Agreement and shall be deemed remade as of the Closing Date.

All of the representations and warranties set forth in this Section 1.2(a) are made with the acknowledgement that they are material, and with the intention that the Developer shall rely upon them as inducements to enter into this Agreement and to perform their obligations hereunder and to close the transactions contemplated herein. The representations and warranties contained in this Section shall each survive the execution of this Agreement and the Closing without limitation as to time.

A. Authority. The Authority is a public body, corporate and politic, existing pursuant to the California Housing Authorities Law (Cal. Health & Safety Code § 34200 et seq.). The Authority has full right, power and lawful authority to convey the Authority Parcel to the Developer as provided herein, and the execution, performance and delivery of this Agreement by the Authority has been fully authorized by all requisite actions. The Authority’s Executive Director or his or her designee has been authorized to act in accordance with Sections

6.5 and 6.10.

B. Possession/Leases. As of the Closing Date, there are no tenants or persons, firms, partnerships, corporations, or entities other than the Authority, who have a lawful interest of any kind in the Authority Parcel. No person, firm, partnership, corporation or other entity other than the Authority has any right to possess the Authority Parcel or any portion of the Authority Parcel.

C. Title. The Authority, at the time of the execution of this Agreement, holds title to the Authority Parcel in fee simple and is the lawful owner of the Authority Parcel. There are no persons other than the Authority having any direct or indirect legal or beneficial ownership of any part of the Authority Parcel. Authority has not granted and there are no outstanding options or rights to purchase the Authority Parcel or any portion thereof or any interest therein.

E. Litigation. The Authority has not been served with notice of any action, suits, material claims or legal proceeds or other proceedings affecting the Authority Parcel, and to the best of Authority’s knowledge based on reasonable inquiry, as of the Closing 8 4885-1338-3052v2/022283-0545
Date, there are no actions, suits, material claims, legal proceedings or any other proceedings affecting the Authority Parcel or any portion thereof, at law or in equity, before any court or governmental agency, domestic or foreign.

F. FIRPTA. The Authority is not a “foreign person” within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute.

G. No Conflict. The Authority’s execution, delivery and performance of its obligations under this Agreement will not (i) constitute a default or a breach under any contract, agreement or order to which Authority is a party or by which it is bound or (ii) violate any statute, law or regulation.

H. No Authority Bankruptcy. The Authority is not the subject of a bankruptcy proceeding.

I. Deliveries. All documents, instruments and other
information delivered by the Authority to the Developer pursuant to this Agreement or in connection with the conveyance and development of the Authority Parcel are true, correct and complete.

J. Commissions. The Authority has not entered into or assumed any agreements which would require payment of any broker’s commission or finder’s fee in connection with the transfer of the Authority Parcel.

K. Environmental Matters.

1. To the best of Authority’s knowledge and belief and after due inquiry: (1) no Hazardous Materials are presently deposited, stored, generated or otherwise located on, under, in or about the Authority Parcel, have migrated from the Authority Parcel, upon or beneath other properties, or have migrated or threatened to migrate from other properties upon, about or beneath the Authority Parcel in violation of applicable Environmental Laws; and (2) no underground improvements including, but not limited to, treatment or storage tanks and sumps, are currently located on or under the Authority Parcel. All underground tanks and other improvements previously located on or under the Authority Parcel have been legally and lawfully removed and disposed of in accordance with applicable Environmental Laws in effect at the time of such removal and disposal.

2. To the best of Authority’s knowledge and belief, there exists no injunction, decree, order or judgment outstanding, or any lawsuit, claim, proceedings, citation, directive or investigation, pending or threatened, relating to the ownership, use, maintenance or operation of the Authority Parcel by any person, or from any alleged violation of Environmental Laws or from the suspected presence of Hazardous Materials thereon, nor does there exist any basis for such lawsuit, claim, proceeding, citation, directive or investigation being instituted or filed.

3. To the best of the Authority’s knowledge and belief, there are no existing violations of the Environmental Laws nor are there any acts or omissions which 9 4885-1338-3052v2/022283-0545
have occurred which, upon the passage of time, could or will constitute a violation of those Environmental Laws in effect as of the date of the Closing. Neither Authority, nor to the best of Authority’s knowledge and belief, any prior owner or occupant of the Authority Parcel, (i) used, stored, transported, generated, disposed of or released (or caused to be used, stored, transported, generated, disposed of or released) on, within, under, about or from the Property any Hazardous Materials, or (ii) used installed, operated or maintained any underground storage tanks on or adjacent to the Property, or (iii) have received notice or other communications concerning any alleged violation of any Environmental Laws, whether or not corrected to the satisfaction of the appropriate authority.

Until the Closing, the Authority shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true as of the Closing with respect to each Parcel, immediately give written notice of such fact or condition to the Developer. (b) Developer’s Representations. The Developer hereby makes the representations and warranties contained below in this Section, all of which are effective as of the Date of this Agreement and shall be deemed remade as of the Closing Date. All of the representations and warranties set forth in this Section are made with the acknowledgement that they are material, and with the intention that the Authority shall rely upon them as inducements to enter into this Agreement and to perform its obligations hereunder and to close the transactions contemplated herein. The representations and warranties contained in this Section shall each survive the execution of this Agreement and the Closing without limitation as to time.

A. Authority. The Developer is an individual. The Developer has full right, power and lawful authority to acquire the Authority Parcel as provided herein and the execution, performance and delivery of this Agreement by the Developer has been fully authorized by all requisite actions.

B. FIRPTA. The Developer is not a “foreign person” within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute.

C. No Conflict. The Developer’s execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound.

D. No Developer Bankruptcy. The Developer is not the subject of a bankruptcy proceeding.

E. Deliveries. All documents, instruments and other
information delivered by the Developer to the Authority pursuant to this Agreement are true, correct and complete.

F. Commissions. Developer has entered into no agreements which would require payment of any broker’s commission or finder’s fee in connection with the transfer of the Authority Parcel.
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Until the Closing, the Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section not to be true as of Closing with respect to each Parcel, immediately give written notice of such fact or condition to Authority. The representations and warranties of this Section shall survive the Closing.

1.3 Transfers of Interest in Authority Parcel or Agreement. (a) Prohibition. The qualifications and identity of Developer are of particular concern to the Authority. It is because of those qualifications and identity that the Authority has entered into this Agreement with the Developer. For the period commencing upon the Date of this Agreement and until expiration of the applicable Affordability Period, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Authority Parcel or the Developer Improvements thereon without prior written approval of Authority, not to be unreasonably withheld, except as expressly set forth herein. (b) Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, Authority approval of an assignment of this Agreement or conveyance of all or any portion of the Authority Parcel or the Developer Improvements, or any part thereof, or any of Developer’s interest therein, shall not be required in connection with any of the following (each a “Permitted Transfer”):

A. The conveyance or dedication of any portion of the
Authority Parcel to the City or other appropriate governmental agency, or the granting of easements or Permits to facilitate construction of infrastructure and utility improvements deemed necessary by the City or other appropriate governmental agency or to support the Developer Improvements;
B. Any transfer or assignment for financing purposes (subject to such financing being considered and approved by Authority pursuant to 4.10 of this Agreement), including the grant of any deed(s) of trust to secure the funds necessary for construction and permanent financing of the Developer Improvements or any portion thereof; C. Any transfer of any direct or indirect ownership interest in Developer to an Affiliate;
D. Partial assignment of this Agreement and the corresponding transfer of a Phase Parcel to a limited partnership in which the Developer or its Affiliates will act as administrative general partner, a not for profit organization will act as general partner, and a third party “tax credit investor”, such as a federally or state chartered bank or other institutional investor that is a regular provider of Tax Credit Financing, will act as limited partner. The partners for each Phase may not be the same (provided that the Developer named herein or any affiliate thereof controlled by Racine Shirley Investments LLC remains in day-to-day control of the Phase and its development and operation). The identity of each such not for profit organization and tax credit investor will not be identified with respect to each Phase until after the Developer has received an allocation from Allocation Committee of a Tax Credit Financing for such Phase. 11 4885-1338-3052v2/022283-0545
E. The removal by the investor limited partner (or investor member) of a general partner (or manager or managing member) of the Developer with respect to any Phase and its replacement as general partner (or manager or managing member) of the Developer with respect to each Phase by an experienced developer approved by such investor limited partner (or investor member), which removal shall be in accordance with the terms of the limited partnership agreement (or limited liability company operating agreement) of the Developer with respect to such Phase; or
F. The assignment of the limited partnership of the investor limited partner (or investor member) of the Developer with respect to any Phase (provided that the Developer named herein or any affiliate thereof controlled by Racine Shirley Investments LLC remains in day-to-day control of the Phase and its development and/or operation). (c) Authority Consideration of Requested Transfer. Except as provided in herein, the Authority agrees that it will not unreasonably withhold approval of a request made pursuant to this Section 1.3, provided the Developer delivers written notice to the Authority requesting such approval. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee’s or purchaser’s development and/or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to enable the Authority to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 1.3(c) and as reasonably determined by the Authority. The Authority shall evaluate each proposed transferee or assignee on the basis of its development and/or operational qualifications and experience and its financial commitments and resources, and may reasonably disapprove any proposed transferee or assignee, during the period for which this Section 1.3 applies, which the Authority determines does not possess equal or better qualifications than the transferring Developer. An assignment and assumption agreement in a form reasonably satisfactory to Authority’s legal counsel shall also be required for all proposed assignments. Within thirty (30) days after the receipt of the Developer’s written notice requesting Authority approval of an assignment or transfer pursuant to this Section

1.3, the Authority shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, Authority requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, the Developer shall promptly furnish to the Authority such further information as may be reasonably requested. Within fifteen (15) days after the receipt of such further information, the Authority shall either approve or disapprove such proposed assignment. In the event the Authority disapproves such proposed request, the Authority shall also provide a written statement setting forth its reasons for disapproval within said fifteen (15) day period. (d) Successors and Assigns. Except as provided herein, all of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. An assignment and assumption agreement in a form reasonably satisfactory to Authority’s legal counsel shall be required for all assignments, regardless of whether the assignment is subject to the Authority’s approval. Whenever the term “Developer” is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. Notwithstanding the foregoing, the Authority acknowledges that Developer may assign this Agreement and/or any Phase to a separate entity as contemplated in subsection (D) above. In such event, (i) the assignee shall be required to assume only the obligation under this Agreement relating to such Phase and not to any other portion of the Authority Parcel; 12 4885-1338-3052v2/022283-0545
(ii) following such assignment, the assignee will become the Developer with respect to such Phase, but not with respect to any other portion of the Authority Parcel; (iii) following such assignment, the assignee will have no obligations or liability with respect to any aspect of this Agreement relating to any portion of the Authority Parcel other than the Phase owned by it. (e) Assignment by Authority. Authority may assign or transfer any of its rights or obligations under this Agreement without the approval of the Developer.

2. ACQUISITION OF AUTHORITY PARCEL

2.1 Purchase Price of the Authority Parcel. The Authority shall sell to Developer, and Developer shall purchase from Authority, all of Authority’s interest in the Authority Parcel, which consists of a fee simple interest, for an aggregate purchase price of One Million Three Hundred Thousand Dollars ($1,300,000), (the “Purchase Price”), which shall be paid in cash at the Closing. The Purchase Price has been established based upon the fair market value of the Authority Property set forth in a recently updated and confirmed MAI appraisal of the Authority Property obtained by the Authority.

2.2 Waiver and Release. Developer, on behalf of itself and its affiliates, and any and all successors and assigns, hereby fully and finally releases Authority, the City, and their respective past and present elective and appointive boards, commissions, officials and employees, representatives and agents from any and all manner of actions, causes of action, suits, obligations, liabilities, judgments, executions, debts, claims and demands of every kind and nature whatsoever, known and unknown, which Developer and any of its affiliates, successors or assigns may now have or hereafter obtain against the Authority or the City or their respective past and present elective and appointive boards, commissions, officials and employees, representatives and agents by reason of, arising out of, relating to, or resulting from in full or in part the condition of any Parcel that exists as of the date of the Closing; provided that such waiver and release shall not apply to any such actions, causes of action, suits, obligations, liabilities, judgments, executions, debts, claims and demands relating to the Authority’s or the City’s (a) breach of any express covenant, conditions, representations or warranties in this Agreement, or (a) gross-negligence or willful misconduct (collectively, the “Reserved Claims”), all of which are hereby expressly reserved by Developer. The parties agree that, with respect to the release of Claims as set forth above, all rights under Section 1542 of the California Civil Code and any similar law of any state or territory of the United States are expressly waived. Section 1542 reads as follows:

Section 1542. Certain claims not affected by general release. A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release which if known by him must have materially affected his settlement with the debtor.

2.3 City and Other Governmental Agency Permits. Before commencement of the construction of the Developer Improvements on any Phase of the Project, the Developer shall, at its own expense, secure or cause to be secured any and all Entitlements and Permits that may be required by any other governmental agency with jurisdiction over such construction as set forth in Section 3.3(a) below. Authority staff will, without obligation to incur liability or expense 13 4885-1338-3052v2/022283-0545
therefor, use its best efforts to expedite the City’s issuance of Entitlements and Permits for such construction.

2.4 Purchase Escrow. Within the time set forth in the Schedule of Performance the parties shall open escrow for the Authority Parcel (the “Escrow”) with First American Title Company or another escrow company mutually satisfactory to both parties (the “Escrow Agent”).
(a) Costs of Escrow. The Authority shall pay the premium for the CLTA Title Policy as set forth in sub section (h) hereof, and the documentary transfer taxes, if any, due with respect to the conveyance of the applicable Parcel of the Authority Parcel and the Developer shall pay any additional premium for ALTA extended coverage title insurance as well as the costs of any endorsements to coverage thereon other than those that the Authority has agreed to obtain to cure any title matter objected to by Developer. The Developer and the Authority each agree to pay one-half of all other typical fees, charges, and costs customary in the County of Los Angeles which arise from the Escrow.
(b) Escrow Instructions. This Agreement constitutes the joint escrow instructions of the Developer and the Authority, and the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to do use commercially reasonable efforts to undertake all acts reasonably necessary to close the Escrow in the shortest reasonable time. Insurance policies for fire or casualty are not to be transferred, and the Authority will cancel such policies after the Closing. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any state or national bank doing business in the State of California. All disbursements shall be made by check from such account.

If in the reasonable opinion of either party it is necessary or convenient in order to accomplish the Closing, such party may require that the parties sign supplemental escrow instructions in a form reasonable acceptable to both parties; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. The Closing with respect to each Parcel shall take place when both the Authority’s Conditions Precedent and the Developer’s Conditions Precedent as set forth in Section 2.4(i) with respect to such Parcel have been satisfied; or waived in writing by the party for whose benefit the condition is imposed. Escrow Agent is instructed to release Authority’s escrow closing statement and Developer’s escrow closing statement to the respective parties. (c) Authority of Escrow Agent. The Escrow Agent is authorized to, and shall:

A. Pay and charge the Authority for the premium of the CLTA Title Policy for each applicable Parcel of the Authority Parcel as set forth in Section 2.4(h) hereof and any amount necessary to place title to the applicable Parcel of the Authority Parcel in the condition necessary to satisfy Section 3(g) of this Agreement. 14 4885-1338-3052v2/022283-0545
B. Pay and charge the Developer and the Authority for their respective shares of any escrow fees, charges, and costs payable under Section 2.4(a) of this Agreement.

C. Pay and charge the Developer for any additional premium to obtain ALTA extended coverage (if any) and for any endorsements to the Title Policy for the Authority Parcel which are requested by the Developer.

D. Disburse funds, deliver and record the Authority Parcel Grant Deed and the CC&R’s, when both the Developer’s Conditions Precedent and the Authority’s Conditions Precedent have been fulfilled or waived by the Developer and the Authority.

E. Do such other actions as necessary to fulfill its obligations under this Agreement.

F. Within the discretion of the Escrow Agent and, if necessary, direct the Authority and the Developer, to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of FIRPTA and any similar state act and regulation promulgated thereunder. Authority agrees to execute a Certificate of Non-Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by the Escrow Agent, on the form to be supplied by the Escrow Agent.

G. Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law.
(d) Closing. The sale of the Authority Parcel shall close within thirty (30) days of the satisfaction or waiver of all of the Authority’s and the Developer’s Conditions Precedent with respect to such Parcel as set forth in Section 2.4(i) hereof, but in no event later than the “Outside Date.” The Authority’s Executive Director or his/her designee may approve such an extension which consent shall not be unreasonably withheld. The “Closing” shall mean the time and day the Authority Parcel Grant Deed is filed for record with the Los Angeles County Recorder. The “Closing Date” for the Closing shall mean the day on which the Closing occurs. (e) Termination. If the Escrow is not in condition to close by the Outside Date, then either party which has fully performed under this Agreement may, in writing to the other party and Escrow Agent, demand the return of documents and terminate this Agreement. If either party makes a written demand for return of documents and termination of this Agreement, this Agreement shall not terminate until five (5) days after the Escrow Agent shall have delivered copies of such demand to all other parties at the respective addresses shown in this Agreement. If any objections are raised within said five (5) day period, the Escrow Agent is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. Termination of this Agreement shall be without prejudice as to whatever legal rights either party may have against the other arising from this 15 4885-1338-3052v2/022283-0545
Agreement. If no demands are made, the Escrow Agent shall proceed with the Closing as soon as possible.
(f) Closing Procedure. The Escrow Agent shall close the Escrow with respect to an the Authority Parcel as follows:

A. Record the Memorandum of Agreement, with instructions for the Recorder of Los Angeles County, California to deliver the Memorandum of Agreement to the Authority;
B. Record the Authority Parcel Grant Deed with instructions for the Recorder of Los Angeles County, California to deliver the Authority Parcel Grant Deed to the Developer;
C. Record the Authority Deed of Trust with instructions for the Recorder of Los Angeles County, California to deliver the Authority Deed of Trust to the Authority;
D. Record CC&Rs covering the Authority Parcel, with
instructions for the Recorder of Los Angeles County, California to deliver the recorded CC&Rs to the Authority;
E. Instruct the Title Company to deliver the Title Policy for the Authority Parcel to the Developer;
F. File any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; G. Deliver the Authority’s FIRPTA Certificate, if any, to the Developer; and
H. Forward to both the Developer and the Authority a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into the Escrow, with such recording and filing date and information endorsed thereon.
(g) Review of Title and Property Diligence. Within the time set forth in the Schedule of Performance, Authority shall cause the delivery to the Developer of a current California Land Title Association (“CLTA”) preliminary title report as to the Authority Parcel, (the “Title Report”), issued by First American Title Company, or another title company mutually agreeable to both parties (the “Title Company”) and together with legible copies of the documents underlying the exceptions to title shown thereon. Prior to the expiration of the Due Diligence Period, Developer shall give the Authority written notice of its approval or disapproval of exceptions to title listed in the Title Report. Failure to give notice of approval or disapproval of any exception to title shall be deemed disapproval of that title exception. Authority shall use good faith reasonable efforts to remove any disapproved exceptions and to provide Developer with satisfactory evidence of removal with fifteen (15) days after receipt of notice of disapproval or deemed disapproval from the Developer (the “Removal Date”). Notwithstanding the foregoing, 16 4885-1338-3052v2/022283-0545
Developer hereby approves the following exceptions: i) Authority Parcel taxes and assessments not then delinquent; and ii) all covenants, restrictions, reservations, and other matters set forth in the Authority Parcel Grant Deed and the CC&Rs. If the non-approved matters or exceptions have not been removed by the Removal Date, Developer may elect to terminate this Agreement in the manner set forth in Section 5.3 of this Agreement, in which case the Authority and the Developer shall each pay one-half of the title and Escrow fees. If Developer does not elect to terminate this Agreement, the transaction contemplated under this Agreement shall proceed with Closing subject to the terms of this Agreement and the Developer shall take title to the Authority Parcel subject to the disapproved matters and exceptions which have not been removed. The Developer shall notify the Authority whether it approves of the physical condition of the Parcel, in Developer’s sole and absolute discretion, by delivering written notice of such determination to the Authority (the “Approval Notice”) prior to the expiration of the Due Diligence Period; provided that such Approval Notice shall not be deemed approval of any title matters disapproved of (or deemed disapproved of) by Developer under this Section 2.4(g). In the event that Developer does not timely deliver an Approval Notice with respect to the Parcel, then this Agreement shall automatically terminate, in the manner set forth in Section 5.3 of this Agreement, upon the expiration of the Due Diligence Period.
(h) Title Insurance. At the Closing Date, the Authority shall cause the Title Company to deliver to the Developer a CLTA owner’s coverage policy of title insurance insuring that title to the Authority Parcel is vested in the Developer, with liability in the amount required by such lenders providing Developer’s Financing. Such policy (the “Title Policy”) shall be subject to the approved title exceptions and standard exceptions in such title policies. If Developer desires an American Land Title Association (“ALTA”) policy of title insurance or endorsements to the Title Policy, that party shall be responsible for the additional costs beyond the cost of a CLTA policy.
(i) Conditions of Closing. The Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below:

A. Authority’s Conditions of Closing. Authority’s obligation to proceed with the Closing of the purchase of the Authority Parcel by Developer is subject to the fulfillment, or waiver by the Authority in writing, by the time period provided for herein, of each and all of the conditions precedent described below (“Authority’s Conditions Precedent”), which are solely for the benefit of the Authority:

1. No Default. As of the Close of Escrow, the Developer shall not be in default of any of its obligations under the terms of this Agreement and all representations and warranties of the Developer contained herein shall be true and correct in all material respects.

2. Execution of Documents. The Developer shall have
executed or shall have effected the valid execution of, and delivered to Escrow, the CC&R’s, Authority Deed of Trust and any other document(s) required by this Agreement.

3. Payment of Purchase Price and Closing Costs. Developer has submitted to Escrow the Purchase Price in cash and has paid or submitted to Escrow all costs of Closing which are Developer’s obligation in accordance with Section 2.4(a) hereof. 17 4885-1338-3052v2/022283-0545

4. Financing. The Authority shall have approved the financing for the construction of the Developer Improvements in accordance with Section 3.10 hereof.

5. Entitlements. The Entitlements Condition shall have been satisfied.

B. Developer’s Conditions of Closing. Developer’s obligation to proceed with the Closing of the Authority Parcel is subject to the fulfillment, or waiver by Developer in writing of each and all of the conditions precedent described below with respect to such Parcel (“Developer’s Conditions Precedent”), which are solely for the benefit of Developer:

1. No Default. The Authority is not in default in any of its obligations under the terms of this Agreement and all representations and warranties of the Authority contained herein shall be true and correct and not misleading in all material respects.

2. Title. Authority shall hold title to the Authority Parcel and no persons other than the Authority shall have any direct or indirect legal or beneficial interest in any part of the Authority Parcel.

3. Execution of Documents. The Authority shall have executed and delivered the Authority Parcel Grant Deed and any other document(s) required by this Agreement.

4. Payment of Closing Costs. Prior to the Close of Escrow, the Authority has paid or submitted into Escrow all costs of Closing which are Authority’s obligation in accordance with Section 2.4(a) hereof.

5. Approval of Condition of Title. The Developer shall have approved the condition of title of the Authority Parcel and delivered its Approval Notice with respect to such Parcel in accordance with Section 2.4(g) hereof.

6. Environmental Condition. The Developer shall have
approved the environmental condition of the Authority Parcel in accordance with Section 2.2(k)(2) hereof.

7. Financing. The Developer shall have secured financing for the development and construction of the Project to be developed and constructed on the Authority Parcel.

8. Entitlements. The Entitlements Condition shall have been satisfied.
(j) Studies and Reports. Prior to the Closing and upon twenty-four (24) hours’ notice to the Authority, representatives of the Developer (including representatives of potential investors and lenders) shall have the right of access to all portions of the Authority Parcel for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement, including, but not limited to soils testing. Any preliminary work undertaken by a party 18 4885-1338-3052v2/022283-0545
on the Authority Parcel prior to the Closing shall be done at the sole expense of the Developer and Developer shall defend, indemnify and hold the Authority, the City, and their respective officers, employees, representatives and agents harmless from and against any claims resulting from all preliminary work, access or use of the Authority Parcel undertaken pursuant to this Section 2.4(j); provided that such indemnification shall not apply to any claims regarding pre-existing conditions at the Authority Parcel or claims caused by the gross negligence or willful misconduct of the Authority or City (collective the “Excluded Claims”). Any preliminary work shall be undertaken only after securing any necessary Permits from the appropriate governmental agencies. (k) Condition of the Authority Parcel.

A. As-Is Condition. The Authority Parcel shall be conveyed to the Developer “as is” and Authority makes no representation or warranty, express or implied, except as provided in Section 1.2, as to the condition of the Authority Parcel or any improvements thereon, the soil, its geology, or the presence of known or unknown faults, and the Developer agrees to and shall indemnify and hold the Authority and the City harmless from and against all liability, loss, damages, costs, or expenses (including actual attorneys’ fees and court costs) arising or resulting directly or indirectly in full or in part from the condition of the Authority Parcel acquired by Developer hereunder other than (i) the Reserved Claims (as defined in Section 2.2 above) or (ii) claims arising from or relating to the release of Hazardous Materials prior to Closing as provided in Section 2.4(k).E. below. It shall be the sole responsibility of the Developer at its expense to investigate and determine the soil and all other conditions of the Authority Parcel and its suitability for the Developer Improvements to be constructed. If the condition of the Authority Parcel is not in all respects entirely suitable for the use or uses to which the Authority Parcel will be put following its acquisition by Developer hereunder, then it shall be the sole responsibility and obligation of the Developer that acquires the Authority Parcel to take such action as may be necessary to place the Authority Parcel in a condition entirely suitable for its development pursuant to this Agreement.

B. [Intentionally omitted.]
C. Developer Precautions After Closing. Upon the Closing, the Developer shall take all necessary precautions to prevent the release into the environment of any Hazardous Materials which are located in, on or under the Authority Parcel. Such precautions shall include compliance with all applicable Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials in, on or under the Authority Parcel.

D. Required Disclosures After Closing. After the Closing and within thirty (30) days of Authority’s written request, the Developer shall provide to the Authority a copy or copies, of all notices of violation, notices to comply, citations, inquiries, clean up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks. The Developer shall report to the Authority, as soon 19 4885-1338-3052v2/022283-0545
as possible after each incident, any known Hazardous Materials release or known circumstances which would potentially lead to such a release.

E. Developer Environmental Indemnity. Upon the Closing, the Developer agrees to indemnify, defend and hold the Authority and the City, and their respective officers, employees, agents, representatives and volunteers, harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys’ fees) (collectively, “Claims”) resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Authority Parcel, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Authority Parcel; provided that this indemnity shall not apply to Claims arising from or relating to the release of Hazardous Materials prior to Closing or any Reserved Claims. This indemnity shall include, without limitation, any damage, liability, fine, penalty, parallel indemnity after closing cost or expense arising or resulting directly or indirectly, in full or in part, from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to a natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment, subject to the limitation set forth in the preceding sentence.
(l) Taxes and Assessments. Escrow Holder shall prorate, as of the Closing Date and based on a thirty (30) day month, all non-delinquent real property taxes and assessments which are a lien upon the Authority Parcel, if any. If the actual tax bill for the current tax year is not available by the Closing Date (or if a supplemental assessment based upon new construction or a change in ownership occurring prior to the Closing Date is received following the Closing Date), the Developer and the Authority shall re-prorate such taxes outside of escrow following the Closing Date after such tax statement (or supplemental assessment) becomes available. Without limiting the foregoing, the Authority shall be responsible for any and all taxes relating to its period of ownership of the Authority Parcel, regardless of when assessed, which obligation shall survive Closing.

3. DEVELOPMENT OF THE AUTHORITY PARCEL

3.1 Scope of Development. Within the time set forth in the Schedule of Performance, subject to Section 6.2 below, the Developer shall develop or cause the development of the Developer Improvements in accordance with the Scope of Development, the City Code, any and all other applicable Governmental Requirements, and any and all other City approvals and entitlements, including without limitation, the final tract maps. The Developer Improvements shall consist generally of the construction of not less than sixty-five (65) Residential Units of apartments for seniors age fifty-five (55)+, together with all on-site improvements and those off-site improvements reasonably related to the Developer Improvements. In no event shall any Residential Units constructed by the Developer consist of mobile or modular homes. 20 4885-1338-3052v2/022283-0545

3.2 Construction Drawings and Related Documents. Within the time set forth in the Schedule of Performance, the Developer shall prepare and submit to the City and the Authority, additional construction drawings, landscape plans, and related documents required for the development of the Authority Parcel in accordance with this Agreement. (a) Submission of Development Plans, Construction Drawings and Related Documents. The Developer shall prepare and submit development plans, construction drawings, landscape plans, and other plans and documents required to be submitted for Authority approval (referred to as “Development Plans”) for the construction of the Developer Improvements materially consistent with the Scope of Development, to the Authority for review and written approval in accordance with the Schedule of Performance; provided, however, that the Authority shall not have the right or responsibility to approve Development Plans, for purposes of architectural review or the issuance of a Permit or otherwise on behalf of the City, but shall only have the right of review and approval of the Development Plans for purposes of material conformity of such Development Plans with the terms and conditions of this Agreement, the Scope of Development and Development Plans previously approved by the Authority (the “Authority Review Standard”) . The Development Plans shall be submitted in two stages — preliminary (i.e., schematic drawings) and final stage (i.e., construction drawings). “Final Development Plans” are hereby defined as those Development Plans in a form sufficient to submit to the City for plan check and issuance of building permit from the City. Any such items submitted to and approved in writing (or deemed approved, if any disapproval is not issued with ten (10) business days after submission) by the Authority shall not be subject to subsequent disapproval by the Authority and Authority’s approval shall not be unreasonably withheld. If Authority has not issued any written objections to the any submitted Development Plans within thirty (30) days after submission (or such shorter time as provided in the Schedule of Performance), then such Development Plans shall be deemed to have been approved.

During the preparation of the Development Plans for the Developer Improvements, the Authority staff and the Developer shall hold regular progress meetings to coordinate the preparation by the Developer, and the submission to and review by the City and the Authority of the same. The Authority staff and the Developer shall communicate and consult informally as frequently as is necessary to ensure that any component of the Development Plans submitted by the Developer to the City and the Authority can receive prompt and speedy consideration.

The Authority shall approve the Development Plans within the times established in the Schedule of Performance, as long as Development Plans are materially consistent with the Scope of Development and any other Development Plans that have been previously approved by the Authority. Upon the disapproval of any component of the Development Plans, the Authority shall state in writing the reasons for said disapproval. The Developer, upon receipt of notice of any disapproval, shall promptly revise said disapproved portions of such Development Plans in a manner that addresses the reasons for disapproval and reasonably meets the requirements of the Authority or in order to obtain the Authority’s approval thereof. The Developer shall resubmit said Development Plans to the Authority as soon as possible after its receipt of the notice of disapproval and, in any event, no later than thirty (30) calendar days thereafter. The Authority shall approve or disapprove the revised Development Plans in the 21 4885-1338-3052v2/022283-0545
same manner and within the same times as provided in this Section 3.2 for approval or disapproval of Development Plans initially submitted to the Authority. (b) City Process. Developer expressly acknowledges that the City is not a party to this Agreement and that nothing set forth in this Agreement binds the City, including with respect to the City’s review, approval or exercise of any other police powers with respect to any aspect of the Project. It is anticipated that the City will process the approval of Development Plans substantially concurrently with the Authority’s review and approval and in accordance with the ordinary procedures of the City.
(c) Changes in Final Construction Plans, Drawings, Specifications and Related Documents. In the event that the Developer desires to make any change in the Final Development Plans after their approval by the Authority that are materially inconsistent with this Agreement, the Scope of Development or any other Development Plans that have been previously approved by the Authority, including as a result of changes that are required by the City, the Developer shall submit the proposed change in writing to the Authority for approval in accordance with the Authority Review Standard. The Authority shall notify the Developer of approval or disapproval thereof in writing within ten (10) calendar days after submission to the Authority. Said ten (10) calendar day period may be extended by mutual consent of the parties. Any such change shall, in any event, be deemed to be rejected by the Authority unless approved, in whole or in part, by written notice thereof submitted by the Authority to the Developer, setting forth in detail the reasons therefor. Nothing herein shall entitle the Developer to any extension of the time set forth in the Schedule of Performance for the commencement of construction or the completion thereof, unless the Authority Executive Director otherwise agrees to such extension in writing and except as provided for in Section 6.2.

The Developer, upon receipt of a notice of disapproval by the Authority and/or the City, may revise such parts of the proposed change in final construction plans, drawings, specifications and related documents as are rejected and shall thereafter resubmit said revisions to the Authority and/or the City for approval in the manner provided in this Section 3.2.

3.3 Entitlements Approvals.
(a) Developer to Seek. Before commencement of construction of the Developer Improvements or other works of improvement upon the Authority Parcel, or any portion thereof, Developer shall, at its own expense, secure or cause to be secured any and all Entitlements and Permits that may be required for the Developer Improvements by the City and/or any other governmental agency affected by such construction or work. Developer shall, without limitation, apply for and secure all Entitlements and Permits and pay all fees, except as provided in Section

2.3, required by the City, County of Los Angeles, school districts and other governmental agencies with jurisdiction over the Developer Improvements and pay all costs, charges and fees associated therewith.
(b) Entitlements Challenges. If, following the approval and issuance of any Entitlements, any Entitlements Challenge is filed or commenced, Developer shall defend, indemnify, assume all responsibility for, and hold the Authority and the City, and their representatives, volunteers, officers, employees, agents, and consultants harmless from, all claims, 22 4885-1338-3052v2/022283-0545
demands, damages, expert witness fees and costs, and all other defense costs or liability, including plaintiff attorneys’ fees and costs ordered by the applicable court to be paid to the party(ies) bringing any such Entitlements Challenge (and including Authority’s and City’s reasonably attorneys’ fees and costs in its or their defense) arising out of such Entitlements Challenge (the foregoing being referred to herein individually and collectively as “Entitlements Challenge Claims”). Within fifteen (15) days after delivery of written notice by the Authority to Developer following the service upon the City and/or Authority of any complaint or action raising such Entitlement Challenge, Developer shall deposit with the Authority the sum of One Hundred Thousand Dollars ($100,000) (the “Entitlements Challenge Indemnity Deposit”). The Entitlements Challenge Indemnity Deposit shall be held by the Authority and applied by the Authority to Entitlements Challenge Claims incurred by the City and/or the Authority following and as a result of the default by Developer of its obligations under the foregoing indemnity. The delivery of the Entitlements Challenge Indemnity Deposit shall not diminish or impair Developer’s obligations under the foregoing provisions of this Section 3.3(b). Within ten (10) business days following the final resolution of such Entitlements Challenge, the Entitlements Challenge Indemnity Deposit shall be returned to Developer. For the avoidance of doubt, provided Developer is in compliance with its obligations under this Agreement, including the foregoing indemnity with respect to any Entitlements Challenge, (i) the Authority shall not have the right to terminate this Agreement, and (ii) Developer shall have the right in its sole discretion either to continue defending such Entitlement Challenge or to agree to a settlement of such Entitlements Challenge provided such settlement does not result in any liability or other material adverse effect to the Authority or the City. However, if Developer is in default of any obligation under this Agreement (other than a default arising out of any failure by Developer to perform any obligation within the time set forth in the Schedule of Performance as a result of such Entitlements Challenge), the City Attorney shall have the right and authority to, on behalf of the Authority and/or the City, defend or dispose of any Entitlements Challenge, whether by settlement, stipulated judgment, or otherwise.

3.4 Schedule of Performance/Completion of Developer Improvements.

Developer shall submit the Development Plans, commence and complete all construction of the Developer Improvements, and satisfy all other obligations and conditions of this Agreement within the times established therefor in the Schedule of Performance. Notwithstanding anything to the contrary in this Agreement or the Schedule of Performance, each date in the Schedule of Performance shall be extended, (a) to account for any Unavoidable Delay as specified in Section

6.2 of this Agreement, and (b) to conform the Schedule of Performance with respect to any Phase to the rules, regulations, policies and conditions of approval applicable to the Tax Credit Financing obtained by Developer with respect to such Phase. In addition to and without limiting the foregoing, the Schedule of Performance is subject to revision from time-to-time as mutually agreed upon in writing by the Developer and the Authority’s Executive Director and Authority’s Executive Director is authorized to make such revisions as he or she deems reasonably necessary.

The Developer shall complete construction of the Developer Improvements within the time frame indicated in the Schedule of Performance; provided however, in the event that the Developer is unable to obtain construction financing from a reasonably acceptable lending institution upon reasonably acceptable terms and conditions, despite the Developer’s best efforts (including without limitation, Developer’s timely response to requests for additional information) to obtain such financing, the Developer shall have such additional period of time to complete construction 23 4885-1338-3052v2/022283-0545
of the Developer Improvements as the Authority’s Executive Director, or his/her designee, in his/her sole and absolute discretion determines.

3.5 Cost of Construction. All of the cost of planning, designing, developing and constructing all of the Developer Improvements, shall be borne solely by the Developer.

3.6 Bodily Injury and Property Damage Insurance. Prior to the commencement of construction of the Developer Improvements on the Authority Parcel and until the issuance of Certificate of Occupancy, the Developer shall obtain and maintain, or shall cause its contractor or contractors to obtain and maintain a policy of general commercial liability insurance which shall include blanket contractual coverage, and shall have limits of not less than Two Million Dollars ($2,000,000.00) per occurrence, and if a policy form with a general aggregate limit is used, or provided, the aggregate limit shall be not less than twice the per occurrence limit.

The Authority, the City and their respective officers, employees, agents, and consultants shall be named as additional insureds under the policy. Said insurance shall cover comprehensive general liability, including, without limitation, automobile liability covering owned, non-owned and hired vehicles; contractor liability; subcontractor liability; premises-operations; explosion and collapse; and broad form property damage and personal injury. Any and all insurance policies required hereunder shall be obtained from companies rated at least “A:VI” or better in Best’s Insurance Guide. All of said insurance policies shall provide that they may not be cancelled, non-renewed, reduced in coverage or amount or otherwise altered unless the Authority and the City receive written notice thereof at least thirty (30) calendar days prior to the effective date of such cancellation, reduction or alteration, ten (10) days for nonpayment of premiums. Any and all insurance obtained by the Developer hereunder shall be and shall state in an endorsement that it is primary to any and all insurance which the Authority and/or City may otherwise carry, including self-insurance, which Authority and City insurance for all purposes of this Agreement shall be separate and apart from the insurance provided under this Agreement. Any and all insurance required hereunder shall be maintained and kept in force until the City has issued the Certificate of Occupancy with respect to the Developer Improvements.

Developer shall furnish an endorsement(s) of insurance countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier evidencing and/or effecting the requirements herein and/or the changes to the Developer’s policy to effect such conformity and setting forth the general provisions of the insurance coverage, and an endorsement that shall name the City and the Authority and their respective officers, boards, agents, employees, and consultants as additional insureds under the policy with respect to this Agreement. The endorsement by the insurance carrier shall contain a statement of obligation on the part of the issuing agent or carrier to notify the City and the Authority of any material reduction, cancellation, or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material change, or non-renewal. Not less than ten (10) days prior to the expiration date of any policy of insurance required by this Section 3.6, Developer shall cause to be delivered to Authority a binder or certificate of insurance with respect to each renewal or new policy, bearing a notation evidencing payment of the premium therefor, or other proof of payment reasonably satisfactory to the Authority. In each instance of the provision of insurance, certified duplicate copies of the policy(s) or renewal policy(s), as applicable, shall be delivered to the Authority’s Executive Director within thirty (30) days of the date of such policy(s).
24 4885-1338-3052v2/022283-0545
The Developer shall also furnish or cause to be furnished to the Authority evidence reasonably satisfactory to the Authority that Developer and any contractor with whom it has contracted for the performance of work on the Authority Parcel or otherwise pursuant to this Agreement carries workers’ compensation insurance as required by law.

3.7 Developer’s Indemnity. The Developer shall defend, indemnify, assume all responsibility for, and hold the Authority and the City, and their representatives, volunteers, officers, employees, agents, and consultants harmless from, all claims, demands, damages, defense costs or liability of any kind or nature relating to any damages to property or injuries to persons, including accidental death (including attorneys’ fees and costs), which are in full or in part caused by or arise directly or indirectly out of any acts or omissions of the Developer’s activities in connection with the Authority Parcel under this Agreement, whether such activities or performance thereof be by the Developer or by anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement; provided that such indemnity shall not apply to any such claims caused by or arising directly or indirectly from the gross negligence or willful misconduct of the Authority, the City, or any of their agents or employs.

3.8 Rights of Access. Representatives of the Authority shall have the right of access to the Authority Parcel, without charges or fees, at normal construction hours and upon not less than 48 hours’ notice, during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Developer Improvements so long as Authority representatives comply with all reasonable and otherwise applicable access and safety rules and requirements of Developer and its contractors.

3.9 Compliance With Laws. The Developer shall carry out the design and construction of the Developer Improvements in conformity with all applicable Governmental Requirements.
(a) Nondiscrimination in Employment. The Developer certifies and agrees that (i) all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and (ii) all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with all applicable Governmental Requirements, including Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sections 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Sections 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C.

Sections 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, California Government Code Sections 12900, et seq., the California Equal Pay Law, California Labor Code Sections 1197.5, California Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Sections 12101, et seq., and all other anti- discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. The Developer shall allow representatives of the Authority access to its employment records related to this Agreement at Developer’s office where such records are kept, upon not less than 48 hours’ notice during regular business hours to verify 25 4885-1338-3052v2/022283-0545
compliance with these provisions, when so requested by the Authority, unless access to such employment records is otherwise prohibited by law.
(b) Standards. Developer shall carry out the design and construction of the improvements to the Site in a timely manner and in conformity with all applicable laws, including but not limited to all applicable state labor and work safety laws and regulations, including the provisions of Labor Code Sections 1770, et seq. relating to prevailing wages, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City’s Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C.

Sections 12101, et seq., California Government Code Section 4450, et seq., California Government Code Sections 11135, et seq., and the Unruh Civil Rights Act, California Civil Code Sections 51, et seq. to the extent applicable to the improvements to the Site as to which the City makes no representations. Developer agrees to hold the City and the Authority harmless and to indemnify and defend the City and the Authority from any claims arising under the provisions of Labor Code §§ 1720, et seq., including, but not limited to, the provisions of Labor Code Section 1726 and 1781. Developer expressly waives any rights it may have under Labor Code Sections 1726 or 1782. It shall be the sole responsibility of the Developer to determine the applicability of such laws to the Developer Improvements.
(c) Taxes and Assessments. The Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Authority Parcel. The Developer shall remove or have removed any levy or attachment made on any of the Authority Parcel, or any part thereof, or assure the satisfaction thereof within a reasonable time.

3.10 Financing of the Developer Improvements.
(a) Approval of Financing. As required herein and as an Authority Condition Precedent to the Closing, Developer shall submit to Authority evidence that Developer has obtained sufficient equity capital or has obtained firm and binding commitments for construction and permanent financing necessary to undertake and complete the development and the construction of the Developer Improvements in accordance with this Agreement. The Authority shall approve or disapprove such evidence of financing commitments within thirty (30) days of receipt of a complete submission. Notwithstanding the foregoing, the Authority shall be deemed to approve any equity and/or debt financing obtained by Developer in connection with Tax Credit Financing for the Project. Such Authority approval shall not be unreasonably withheld, conditioned, or delayed. If Authority shall disapprove any such evidence of financing, Authority shall do so by written notice to Developer stating the reasons for such disapproval and Developer shall use commercially reasonable efforts to obtain and submit to Authority new evidence of financing. Authority shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 3.10 for the approval or disapproval of the evidence of financing as initially submitted to Authority. Developer shall close the approved financing to or concurrently with the Closing. The Authority shall reasonably cooperate with Developer’s efforts to obtain financing for the Project, including, without limitation by executing within a reasonable time following written request any subordination agreement, estoppel certificate, consent and/or commercially reasonable documents required by any financing source 26 4885-1338-3052v2/022283-0545
approved by the Authority; provided, however, that the Authority shall first have the right to review and approve in its reasonable discretion the form of any document.

Such evidence of financing shall include the following: (a) a copy of a legally binding, firm and enforceable loan commitment(s) obtained by Developer from one or more financial institutions for the mortgage loan or loans for financing to fund the construction, completion, operation and maintenance of the Developer Improvements, subject to such lenders’ reasonable, customary and normal conditions and terms, pursuant to which Developer has funded a deposit, and/or (b) a certification from the chief financial officer of Developer that Developer has sufficient funds for such construction, and that such funds have been committed to such construction, and/or (c) other documentation reasonably satisfactory to the Authority as evidence of other sources of capital sufficient to demonstrate that Developer has adequate funds to cover the difference between the total cost of the construction and completion of the Developer Improvements, less financing authorized by those loans set forth in (a) above and approved by the Authority. (b) No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease-Back for Development. With the exception of Developer’s Financing and without limiting any of Developer’s rights set forth in this Agreement, mortgages, deeds of trust and sales and leases-back of all or any portion of the Authority Parcel may be permitted before completion of the construction of the Developer Improvements with the Authority’s prior written approval, which shall not be unreasonably withheld or delayed, but only for the purpose of securing loans of funds to be used for financing the construction of the Developer Improvements; permanent financing; and any other purposes necessary and appropriate in connection with development under this Agreement. The Developer shall notify the Authority in advance of any mortgage, deed of trust or sale and lease-back financing, if the Developer proposes to enter into the same before completion of the construction of the Developer Improvements. The words “mortgage” and “trust deed” as used hereinafter shall include sale and lease-back. Developer shall not enter into any such conveyance for financing without the prior written approval of the Authority, and any attempt to convey the Authority Parcel or portion thereof for financing without Authority approval and shall not result in the transfer of any interest in the Authority Parcel. (c) Holder Not Obligated to Construct Improvements. The holder of any mortgage or deed of trust authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete the Developer Improvements or any portion thereof, or to guarantee such construction or completion; nor shall any covenant or any other provision in this Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed or construed to permit or authorize any such holder to devote the Authority Parcel to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement.
(d) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by the Developer as provided herein, whenever the Authority delivers any Default Notice or demand to the Developer with respect to any breach or default by the Developer, including with respect to the completion of construction of the Developer Improvements, the Authority shall deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand if the Developer fails to cure the Default within the time set forth in Section 5.1 hereof. Each such holder 27 4885-1338-3052v2/022283-0545
shall (insofar as the rights granted by the Authority are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence (i) to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage, and/or (ii) to assume Developer’s rights and obligations under this Agreement and/or cause such rights and obligations to be assumed by its designee. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Developer Improvements, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer’s obligations to the Authority by written agreement reasonably satisfactory to the Authority. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Authority Parcel (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (e) Failure of Holder to Complete Improvements. In any case where, sixty (60)) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Authority Parcel or any part thereof receives a notice from the Authority of a default by the Developer in completion of construction of any of the Developer Improvements under this Agreement, and such holder has not exercised the option to construct as set forth in Section 3.10(d), or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the Authority may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Authority Parcel or any part thereof has vested in the holder, the Authority, if it so desires, shall be entitled to a conveyance from the holder to the Authority of the Authority Parcel, free of the lien of such mortgage or deed of trust upon payment to the holder of an amount equal to the sum of the following:

A. The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); B. All expenses with respect to foreclosure including
reasonable attorneys’ fees;
C. The net expense, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Authority Parcel or part thereof;
D. The costs of any improvements made by such holder;
E. An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or 28 4885-1338-3052v2/022283-0545
deed of trust debt and such debt had continued in existence to the date of payment by the Authority; and
F. Any customary prepayment charges legally imposed by the lender pursuant to its loan documents and agreed to by the Developer. (f) Right of the Authority to Cure Mortgage or Deed of Trust Default.

In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of construction of the Developer Improvements or any part thereof, Developer shall immediately deliver to Authority a copy of any mortgage holder’s notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, the Authority shall have the right but no obligation to cure the default. In such event, the Authority shall be entitled to reimbursement from the Developer of all proper costs and expenses incurred by the Authority in curing such default. The Authority shall also be entitled to a lien upon the Authority Parcel to the extent of such costs and disbursements. Any such lien shall be junior and subordinate to the mortgages or deeds of trust pursuant to this Section 3.10.

3.11 Certificate of Completion. Promptly after completion of all construction and development required by this Agreement to be completed by Developer upon the Authority Parcel in conformity with this Agreement, the Authority shall furnish Developer with the Certificate of Completion. The Authority shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of completion of the construction required by this Agreement upon the Authority Parcel and the Certificate of Completion shall so state. The Certificate of Completion shall be substantially in the form attached hereto as Attachment No. 9 and in any event such form shall be sufficient so as to permit it to be recorded in the Recorder’s Office of Los Angeles County. If the Authority refuses or fails to furnish a Certificate of Completion after written request from Developer, the Authority shall, within ten (10) days of written request therefor, provide Developer with a written statement of the reasons the Authority refused or failed to furnish a Certificate of Completion. The statement shall also contain the Authority’s opinion of the actions Developer must take to obtain a Certificate of Completion under this Section. If the reason for such refusal is confined to the immediate availability of specific items of materials for landscaping, the Authority will issue its Certificate of Completion upon the posting of a bond or other security acceptable to Authority in Authority’s sole discretion by Developer with the Authority in an amount representing a fair value of the work not yet completed. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion will not constitute a notice of completion pursuant to California Civil Code Section 3093.

4. USE OF THE AUTHORITY PARCEL

4.1 Affordable Housing.
(a) Number of Units. As set forth in Section 3.1 of this Agreement and the Scope of Development, the Developer shall construct a minimum of sixty-five (65) Residential 29 4885-1338-3052v2/022283-0545
Units for seniors age fifty-five (55)+, all of which will be designated for and occupied at Affordable Rents by Qualified Residents. “Qualified Residents” means lower income households as defined by California Health and Safety Code Section 50079.5. (b) Period of Affordability. During the entire term of the Affordability Period, Developer agrees to make available, restrict occupancy to, and rent each residential unit to Qualified Residents at Affordable Rents. In addition to any requirements of the City Code, Developer agrees to comply with the provisions of California Health and Safety Code Section 33413 through Section 33418 to the extent necessary to enable the Authority to count the units for purposes of meeting the requirements of Section 33413 of the California Health and Safety Code.

During the Affordability Period Developer shall provide information reasonably required by Authority to satisfy its reporting obligations under the applicable law. The “Affordability Period” means the period beginning upon the first day of the first full month following the date on which the first unit in the Project is occupied and ending on the last day of the 360th month thereafter. (c) Annual Reports. During the Affordability Period, Developer, at its expense, shall submit to the Authority the reports required pursuant to Health and Safety Code Section 33418, as the same may be amended from time to time, with each such report to be in the form prescribed by the Authority. Each annual report shall cover the immediately preceding calendar year.

4.2 Uses. Following the Closing, the Developer covenants and agrees to devote, use, develop, operate and maintain the Authority Parcel in accordance with the Authority Parcel Grant Deed, the CC&Rs and this Agreement. All uses conducted on the Authority Parcel, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to all Entitlements, Permits, all applicable provisions of the City Code, and the recorded documents pertaining to and running with the Authority Parcel.

4.3 Nondiscrimination. The Developer by and for itself and any successors in interest covenants that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Authority Parcel, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Authority Parcel. The foregoing covenants shall run with the land.

All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
(a)In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or 30 4885-1338-3052v2/022283-0545
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 land herein conveyed.

The foregoing covenants shall run with the land.”
(b)In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
”There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased.“ (c)In contracts: “There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, ancestry or national origin, 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.“

4.4 Effect of Violation of the Terms and Provisions of this Agreement After Certificate of Occupancy Issued and Developer’s Financing Converts to Permanent Financing. This Agreement shall terminate and be of no further force and effect upon (i) the issuance of the Certificate of Occupancy and (ii) the conversion of Developer’s Financing to Permanent Financing; provided however, that such termination shall not be construed so as to terminate or modify the following provisions of this Agreement, which shall remain in full force and effect in accordance with their terms:
(a) any and all the provisions of the CC&Rs;
(b) the representations and warranties as set forth in Section 1.2; (c) the indemnity provisions set forth in this Agreement which shall remain in effect for such period and subject to the terms and conditions set forth herein; (d) Article 6 relating to Defaults and Remedies which shall remain in effect to the extent necessary to enforce the provisions of this Agreement that survive, set forth in this Section 5.4, or to remedy defaults discovered after the termination of this Agreement.

4.5 Maintenance of the Property. From and after the completion of the Project on any portion of the Property for which the Closing has occurred, the Developer shall maintain or cause to be maintained the interiors and exteriors of the Developer Improvements on 31 4885-1338-3052v2/022283-0545
the Property in a decent, safe and sanitary manner, in accordance with the standard of maintenance of similar housing units within the City, and in accordance with the maintenance standards that are set forth in the CC&Rs. None of the dwelling units in the Property shall at any time be utilized on a transient basis nor shall the Property or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest home. The Developer shall not convert the Property to condominium ownership without the prior written approval of the Authority, which approval the Authority may grant, withhold or deny in its sole and absolute discretion. If at any time Developer fails to maintain the Property in accordance with this Agreement or the CC&Rs and Developer does not correct or commence to correct such condition within ten (10) days after written notice from the Authority with respect to graffiti, debris, waste material, and general maintenance, or thirty (30) days after written notice from the Authority with respect to landscaping and building improvements, then the Authority, in addition to whatever remedy it may have at law or at equity, shall have the right to enter upon the applicable portion of the Property and perform all acts and work reasonably necessary to protect, maintain, and preserve the Improvements and landscaped areas on the Property, and to attach a lien upon the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the Authority and/or costs of such cure, including a ten percent (10%) administrative charge, which amount shall be promptly paid by Developer to the Authority upon demand. Pursuant to the CC&Rs, the foregoing covenants shall run with the land for the term of the Affordability Period.

4.6 Long Term Management of the Property. The parties acknowledge that the Authority is interested in the long-term management and operation of the Property and in the qualifications of any person or entity retained by the Developer for that purpose (the “Property Manager”). The Authority may from time-to-time review and evaluate the identity and performance of the Property Manager of the Property and the Property Manager’s compliance with the provisions of this Agreement and the CC&Rs. If the Authority reasonably determines that the performance of the Property Manager is deficient based upon the standards and requirements set forth in this Agreement and the CC&Rs, the Authority shall provide written notice to the Developer of such deficiencies and the Developer shall use commercially reasonable efforts to correct or cause to be corrected such deficiencies. Upon Default of the terms of this Agreement or the CC&Rs by the Property Manager, the Authority shall have the right to require the Developer to remove and replace the Property Manager with another property manager or property management company reasonably acceptable to the Authority. Such Property Manager shall be experienced in managing multifamily residential developments similar to the Project and may be related to or affiliated with the Developer. Pursuant to the CC&Rs, the foregoing covenants shall run with the land for the term of the Affordability Period.

5. DEFAULTS AND REMEDIES

5.1 Default Remedies. Subject to the extensions of time set forth in Section

6.2 of this Agreement, failure by either party to perform any material action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a “Default” under this Agreement. A party claiming a Default (the “Claimant”) shall give written notice to the other party specifying the alleged grounds for the Default (the “Default Notice”). Except as otherwise expressly provided in this Agreement, the Claimant shall not institute any proceeding against any other party and the other party shall not be 32 4885-1338-3052v2/022283-0545
in Default if such party within thirty (30) days from receipt of the notice required by this Section

5.1, with due diligence, commences to cure, correct or remedy such failure or delay and shall diligently pursue such cure, correction, or remedy to completion.

5.2 Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, or to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Los Angeles, State of California, in an appropriate municipal court in that county, or in the United States District Court for the Central District of California.

5.3 Termination by Developer. In the event that the Developer is not in default under this Agreement and Authority does not tender title to the Authority Parcel in the manner and condition and by the date provided in this Agreement, or in the event that one or more of Developer’s Conditions Precedent to the Closing is not fulfilled or waived and such failure is caused by the Authority’s default, or in the event of any default of Authority prior to the Closing which is not cured within the time set forth in Section 5.1 hereof, and any such failure is not cured within the applicable time period after written demand by the Developer, then this Agreement may, at the option of the Developer, be terminated by written notice thereof to Authority. From the date of the written notice of termination of this Agreement by the Developer to Authority and thereafter, this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties, except that Developer may pursue any remedies it has hereunder.

5.4 Termination by Authority.
(a) Termination by Authority Prior to Closing. In the event that the Authority is not in default under this Agreement and Developer does not fully perform its obligations hereunder in the manner and by the dates provided in this Agreement, or in the event that one or more of Authority’s Conditions Precedent to the Closing is not fulfilled or waived and such failure is caused by the Developer’s Default, or in the event of any other Default of Developer prior to the Closing which is not cured within the time set forth in Section 5.1 hereof, and any such failure is not cured within the applicable time period after written demand by the Authority, then this Agreement may, at the option of the Authority, be terminated by written notice thereof to Developer. From the date of the written notice of termination of this Agreement by the Authority to the Developer and thereafter, this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties, except that the Authority may pursue any remedies it has hereunder.

5.5 Reentry and Revesting of Title in Authority After the Conveyance and Prior to Completion of Construction. Authority has the right, at its election, to reenter and take possession of any portion of the Authority Parcel, with all improvements thereon, and terminate and revest in Authority the estate conveyed to Developer with respect to such portion (each, a “Reentry Portion”) if, after the Closing, but prior to both (i) the issuance of the Certificate of Occupancy with respect to such Reentry Portion and (ii) the conversion of Developer’s Financing to Permanent Financing with respect to such Reentry Portion, Developer (or its successors in interest) shall:
33 4885-1338-3052v2/022283-0545
(a) Fail to start the construction of the Developer Improvements on such Reentry Portion as required by this Agreement for a period of sixty (60) days after written notice thereof from the Authority for reasons other than those specified in Section 6.2 of this Agreement; or
(b) Abandon or substantially suspend construction of the Developer Improvements on such Reentry Portion required by this Agreement for a period of sixty (60) days after written notice thereof from Authority for reasons other than those specified in Section 6.2 of this Agreement; or
(c) Contrary to the provisions of Section 1.3 of this Agreement, transfer or suffer any involuntary transfer of such Reentry Portion or any part thereof in violation of this Agreement and fail to cure such violation within thirty (30) days after written notice thereof from Authority.

Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit any mortgage or deed of trust permitted by this Agreement; or any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust. Authority shall promptly execute and deliver any documents requested by such mortgage holder certifying that the Authority’s rights under this Section 5.5 are subordinate to mortgage holder’s rights.

Upon the revesting in Authority of title to such Reentry Portion as provided in this Section

5.5, Authority shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell such Reentry Portion as soon and in such manner as Authority shall find feasible and consistent with the objectives of such law, as it exists or may be amended, to a qualified and responsible party or parties (as determined by Authority) who will assume the obligation of making or completing the Developer Improvements, or such improvements in their stead as shall be satisfactory to Authority and in accordance with the uses specified for such Authority Parcel. Upon such resale of such Reentry Portion, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering such Reentry Portion which is permitted by this Agreement, shall be applied:

First, to reimburse Authority, on its own behalf or on behalf of the City, all costs and expenses incurred by Authority with respect to such Reentry Portion after the revesting of title to such Reentry Portion in the Authority, including, but not limited to, any expenditures by Authority or the City in connection with the recapture, management and resale of such Reentry Portion or part thereof (but less any income derived by Authority from such Reentry Portion or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to such Reentry Portion or part thereof which Developer has not paid; any payments made or necessary to be made to discharge any encumbrances or liens existing on such Reentry Portion or part thereof at the time or revesting of title thereto in the Authority, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on such Reentry Portion, or part thereof; and any amounts otherwise owing the Authority, and in the event additional proceeds are thereafter available, then
34 4885-1338-3052v2/022283-0545
Second, to reimburse Developer, its successor or transferee, up to the amount equal to the sum of (a) the costs incurred for the acquisition and development of such Reentry Portion and for the improvements existing on such Reentry Portion at the time of the reentry and possession, less (b) any gains or income withdrawn or made by the Developer from such Reentry Portion or the improvements thereon.

Any balance remaining after such reimbursements shall be retained by the Authority as its property. The rights established in this Section 5.5 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the Authority will have conveyed such Reentry Portion to the Developer for redevelopment purposes, particularly for development of the Residential Units and not for speculation in undeveloped land.

5.6 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

5.7 Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

6. GENERAL PROVISIONS

6.1 Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice (“Notice”) required or permitted under this Agreement must be in writing and shall be sufficiently given if delivered by hand (and a receipt therefor is obtained or is refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by telecopy or overnight delivery service to:

To Authority: Lancaster Housing Authority
44933 North Fern Avenue
Lancaster, California 93534
Attention: Executive Director
To Developer: Racine Shirley Investments LLC
43861 Ryckebosch Lane
Lancaster, CA 93535
Attention: Sarah Shirley
35 4885-1338-3052v2/022283-0545
Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 5.1.

6.2 Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: litigation challenging the validity of this transaction or any element thereof or the right of either party to engage in the acts and transactions contemplated by this Agreement; inability to secure necessary labor, materials or tools; delays of any contractor, sub-contractor or supplier; or withdrawal of financing not caused by any act or omission of the Developer; a moratorium by the City or any other applicable governmental authority that impairs the ability of Developer to obtain the Entitlements or any permits required to development, construct, complete and/or operate the Project or any portion thereof; war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions and government orders in connection with epidemics; freight embargoes; lack of transportation; governmental restrictions or priority; unusually severe weather; unanticipated physical condition of the Authority Parcel acquired by Developer (but excluding any condition that is caused by the acts of Developer or its agents); acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Authority which shall not excuse performance by the Authority); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform (any of the foregoing, “Unavoidable Delay”). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the Executive Director of Authority and the Developer.

Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Developer Improvements shall not constitute grounds of enforced delay pursuant to this Section 6.2.

6.3 Non-Liability of Officials and Employees of Authority and Developer.

No member, official, employee, volunteer, agent, consultant, or other representative of the Authority or the City shall be personally liable to the Developer, or any successor in interest, in the event of any Default or breach by the Authority or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement.

6.4 Relationship Between Authority and Developer. It is hereby acknowledged that the relationship between the Authority and the Developer is not that of a partnership or joint venture and that the Authority and the Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the Authority shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Authority Parcel. Each Party agrees to indemnify, hold harmless and defend the other party from any claim made against the other party arising from a claimed relationship of partnership or joint 36 4885-1338-3052v2/022283-0545
venture between the parties with respect to the development, operation, maintenance or management of the Authority Parcel.

6.5 Authority Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by the Authority, the Executive Director of Authority or his or her designee is authorized to act on behalf of Authority unless specifically provided otherwise or the context should require otherwise.

6.6 Commencement of Authority Review Period. The time periods set forth herein for the Authority’s approval of agreements, plans, drawings, or other information submitted to the Authority by the Developer and for any other Authority consideration and approval hereunder which is contingent upon documentation required to be submitted by the Developer shall only apply and commence upon the Developer’s complete submittal of all the required information. In no event shall an incomplete submittal by the Developer trigger any of the Authority’s obligations of review and/or approval hereunder; provided, however, that the Authority shall notify the Developer of an incomplete submittal as soon as is practicable and in no event later than ten (10) days of Developer’s submittal.

6.7 Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in four (4) originals, each of which is deemed to be an original.

6.8 Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party’s own independent investigation of any and all facts such party deems material. This Agreement, including attachments hereto, constitute the entire understanding and agreement of the parties, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof.

6.9 Attorneys’ Fees. In any action between the parties to interpret, enforce, reform, modify, rescind or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys’ fees and expert witness fees. Costs recoverable for enforcement of any judgment shall be deemed to include reasonable attorneys’ fees.

6.10 Administration. This Agreement shall be administered and executed by the Authority’s Executive Director, or his or her designated representative, following approval of this Agreement by the Authority. The Authority shall maintain authority of this Agreement through the Executive Director of the Authority (or his authorized representative). The Executive Director shall have the authority to issue interpretations, waive provisions and enter into amendments of this Agreement on behalf of the Authority so long as such actions do not substantially change the uses or development permitted on the Authority Parcel, or add to the costs 37 4885-1338-3052v2/022283-0545
to the Authority as specified herein as agreed to by the Authority Board, and such amendments may include extensions of time specified in the Schedule of Performance. All other waivers or amendments shall require the written consent of the Authority Board.

6.11 Amendments of Agreement. The Developer and the Authority agree to mutually consider reasonable requests for amendments to this Agreement. Each party shall be responsible for its own costs incurred, including attorneys’ fees, in connection with any amendments to this Agreement which are requested by the Developer.

6.12 Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise.

6.13 Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word “including” shall be construed as if followed by the words “without limitation.” This Agreement shall be interpreted as though prepared jointly by both parties.

6.14 No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement.

6.15 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. Notwithstanding the foregoing, the Authority agrees to consider in good faith any modifications to the terms and provisions of this Agreement as may be reasonably required in connection with any Tax Credit Financing or other governmental agency.

6.16 Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law.

6.17 Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens) and including the last day, unless the last day is a holiday, Saturday, or Sunday, and then that day is also excluded.

The term “holiday” shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time.

6.18 Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal 38 4885-1338-3052v2/022283-0545
advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise.

6.19 Time of Essence. Time is expressly made of the essence with respect to the performance by the Authority and the Developer of each and every obligation and condition of this Agreement.

6.20 Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents (subject to prior review and approval, in its reasonable discretion, of the form of such documents) which may be reasonably necessary, helpful or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, consents, estoppel certificates, releases and/or additional agreements.

6.21 Conflicts of Interest. No member, official or employee of Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested.

6.22 Approval and Execution. After the execution of this Agreement by the Developer and the prompt delivery of this Agreement thereafter by the Developer to the Authority, this Agreement must be approved and executed by the Authority and delivered by the Authority to the Developer within sixty (60) calendar days after the date of submission of the Agreement by the Developer to the Authority in order for the Agreement to become effective. In the event that the Authority has not approved, executed and delivered the Agreement to the Developer within said period, this Agreement shall be deemed to be of no further force or effect unless the time for said approval, execution and delivery is extended by written notice from the Developer to the Authority.

6.23 Recordation of Memorandum of Agreement. The parties agree to permit the recordation of the Memorandum of Agreement against the Authority Parcel in the Office of the Recorder for the County of Los Angeles, California.

6.24 Warranty of Authority. The persons signing this Agreement represent and warrant that they are authorized to execute and deliver this Agreement and that this Agreement will thereby become binding on the party for whom such person has signed.

6.25 Commissions. Authority and Developer represent and warrant to each other that they have not dealt with any party that may be entitled to a finder’s fee or commission for this transaction and that no commission will be paid to any party or parties. Authority and Developer each agrees to pay and protect, indemnify, defend and hold harmless the other from and against all liability, damages, attorneys’ fees, court costs and expenses from causes of action, suits, claims, 39 4885-1338-3052v2/022283-0545
demands and judgments of any nature whatsoever arising out of or in any way connected with its dealings with any real estate brokers or others pertaining to this transaction.

6.26 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Parcel HN4 DDA – Signature Page
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below.

DEVELOPER:

RACINE SHIRLEY INVESTMENTS LLC, a
California limited liability company
By: _____________________________
Name: Sarah Shirley
Its: Principal
AUTHORITY:

LANCASTER HOUSING AUTHORITY,
a public body corporate and politic
By: _____________________________
Name: _____________________________
Its: _____________________________
APPROVED AS TO FORM:

Authority Deputy Executive Director
ATTEST:

Authority Secretary
APPROVED AS TO FORM:

Authority Counsel
ATTACHMENT NO. 1A - 1
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ATTACHMENT NO. 1A

DEPICTION OF AUTHORITY PARCEL

ATTACHMENT NO. 1B - 1
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ATTACHMENT NO. 2-1
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ATTACHMENT NO. 2

GRANT DEED

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
____________________________
c/o Racine Shirley Investments LLC
43861 Ryckebosch Lane
Lancaster, CA 93535
Attention: Sarah Shirley
(Space above for recorder’s use only)
No recording fee pursuant to Government Code
Section 6103 and 27383
For valuable consideration, receipt of which is hereby acknowledged, LANCASTER HOUSING AUTHORITY, a public body, corporate and politic (the “Grantor”), hereby grants to Racine Shirley Investments LLC, a California limited liability company (the “Grantee”), the real property hereinafter referred to as the “Authority Parcel,” described in Exhibit A attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants of record described there.

1. Grantor excepts and reserves from the conveyance herein described all interest of Grantor in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through and to use and occupy all parts of the Authority Parcel lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from the Authority Parcel or other lands, but without, however, any right to use either the surface of the Authority Parcel or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Authority Parcel in such a manner as to create a disturbance to the use or enjoyment of the Authority Parcel.

2. 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 race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Authority Parcel, nor shall 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 of the Authority Parcel.

ATTACHMENT NO. 2-2
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Grantee shall refrain from restricting the rental, sale or lease of the Authority Parcel on the basis of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
(a) In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or 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 land herein conveyed. The foregoing covenants shall run with the land.” (b) In contracts entered into relating to the sale, transfer or leasing of the Authority Parcel or any interest therein: “There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap, ancestry or national origin, 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.”

3. Grantor and Grantee entered into that certain Disposition and Development Agreement dated as of the date hereof (“Agreement”) a copy of which is on file with Grantor at is offices as public record. All terms used herein that are not otherwise defined, shall have the same meaning as those used in the Agreement. Pursuant to the Agreement, Authority has the right, at its election, to reenter and take possession of the Authority Parcel or portions thereof (collectively, the “Reentry Portion”), with all improvements thereon, and terminate and revest in Authority the estate conveyed to Developer if, after the Closing, but prior to the issuance of the Certificate of Occupancy for the portion of the Project to be constructed on such Reentry Portion, Developer (or its successors in interest) shall:
(a) Fail to start the construction of the Developer Improvements on such Reentry Portion as required by this Agreement for a period of sixty (60) days after written notice thereof from the Authority for reasons other than those specified in Section 6.2 of the Agreement; or
(b) Abandon or substantially suspend construction of the Developer Improvements required by this Agreement to be constructed on such Reentry Portion for a period of sixty (60) days after written notice thereof from Authority for reasons other than those specified in Section 6.2 of the Agreement; or
(c) Transfer or suffer any involuntary transfer of such Reentry Portion or any part thereof in violation of the Agreement or in a manner contrary to the provisions of Section 1.3 ATTACHMENT NO. 2-3
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of the Agreement and fail to cure such violation within thirty (30) days after written notice thereof from Authority.

Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit:
(A) Any mortgage or deed of trust permitted by the Agreement; or (B) Any rights or interests provided in the Agreement for the protection of the holders of such mortgages or deeds of trust.

Authority shall promptly execute and deliver any documents requested by such mortgage holders certifying that the Authority’s rights under this Section 3 are subordinate to mortgage holder’s rights.

Upon the revesting in Authority of title to such Re-entry Portion as provided herein, Authority shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell such Re-entry Portion as soon and in such manner as Authority shall find feasible and consistent with the objectives of such law, as it exists or may be amended, to a qualified and responsible party or parties (as determined by Authority) who will assume the obligation of making or completing the Developer Improvements, or such improvements in their stead as shall be satisfactory to Authority. Upon such resale of such Reentry Portion, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering such Reentry Portion which is permitted by this Agreement, shall be applied:
(i) First, to reimburse Authority, on its own behalf or on behalf of the City, all costs and expenses incurred by Authority, excluding City and Authority staff costs, but specifically, including, but not limited to, any expenditures by Authority or the City in connection with the recapture, management and resale of such Reentry Portion or part thereof (but less any income derived by Authority from such Reentry Portion or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to such Reentry Portion or part thereof which Developer has not paid; any payments made or necessary to be made to discharge any encumbrances or liens existing on such Reentry Portion or part thereof at the time or revesting of title thereto in the Authority, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on such Reentry Portion, or part thereof; and any amounts otherwise owing the Authority, and in the event additional proceeds are thereafter available, then
(ii) Second, to reimburse Developer, its successor or transferee, up to the amount equal to the sum of (a) the costs incurred for the acquisition and development of such Reentry Portion and for the improvements existing on such Reentry Portion at the time of the reentry and possession, less (b) any gains or income withdrawn or made by the Developer from such Reentry Portion or the improvements thereon.

ATTACHMENT NO. 2-4
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Any balance remaining after such reimbursements shall be retained by the Authority as its property. The rights established hereunder are not intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the Authority will have conveyed such Reentry Portion to the Developer for redevelopment purposes, particularly for development of the Residential Units and not for speculation in undeveloped land.

4. All covenants contained in this Grant Deed other than Paragraph 3 shall be covenants running with the land and shall remain in effect in perpetuity.

5. All covenants without regard to technical classification or designation shall be binding for the benefit of Grantor, and such covenants shall run in favor of Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether Grantor is or remains an owner of any land or interest therein to which such covenants relate. Grantor, in the event of any breach of any such covenants, shall have the right to exercise all 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.

GRANTEE:
_________________________,
a ________________________
By: _______________________________,
a ______________________________
its _____________________________
GRANTOR:

LANCASTER HOUSING AUTHORITY,
a public body corporate and politic
By: _____________________________
Name: _____________________________
Its: _____________________________
ATTACHMENT NO. 2-5
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EXHIBIT “A”
TO ATTACHMENT NO. 2

LEGAL DESCRIPTION
Parcel 7
APN: 3123-014-905
LOT 14 AND 15 OF TRACT NO. 22804, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK, 609 PAGES 71 TO 73 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

Parcel 8
APN: 3123-014-906
LOT 22 OF TRACT NO. 22804, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK, 609 PAGES 71 TO 73 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

ATTACHMENT NO. 3-1
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ATTACHMENT NO. 3

SCHEDULE OF PERFORMANCE
Task/Activity Deadline

1. Entry into DDA, subject to and following
Authority and Council approval
November 14, 2023

2. Opening of Escrow. The parties shall open
escrow with the Escrow Agent. [DDA § 2.4]
November 21, 2023
[7 days after execution of DDA]

3. Documentation of Exceptions to Title. Authority
shall cause delivery to the Developer of the Title
Report for Authority Property and legible copies
of the documents underlying the exceptions set
forth in the Title Reports [DDA § 2.4(g)]
November 28, 2023
[14 days execution of DDA]

4. Approval/Disapproval of Exceptions. Developer
shall provide written notification of Developer’s
approval or disapproval of the exceptions set
forth in the Title Reports [expiration of Due
Diligence Period] [DDA § 2.4(g)]
January 15, 2024
[60 days after execution of DDA]

5. Expiration of Due Diligence Period [DDA § 1.1] January 15, 2024 [60 days after execution of DDA]

6. Removal of Disapproved Exceptions. Authority
to use efforts to remove disapproved exceptions
and/or provide reasonable assurances that such
exception(s) will be removed on or before the
Closing. [DDA § 2.4(g)]
February 5, 2024
[21 days after submission of Developer’s
written objections]

7. Submission of Financing Method. Developer
submits Method of Financing for Construction of
Developer Improvements on Authority Parcel to
the Authority [DDA § 3.10(a)]
July 1, 2024

8. Consideration of Financing Method. Developer
submits Method of Financing for Construction of
Developer Improvements on Authority Parcel by
Authority. Authority shall approve or deliver
specific written objections to Developer’s
proposed Financing Method [DDA § 3.10]
[10 days after Developer’s submission of
Financing Method for Phase 1]
ATTACHMENT NO. 3-2
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9. Close of Escrow. Escrow closing for the
conveyance of the Authority Parcel to the
Developer
July 30, 2024

10. Submittal of Certificates of Insurance.

Developer shall furnish all certificates of
insurance for the Authority Parcel [DDA § 3.6]
Prior to commencement of construction

11. Commencement of Construction of Developer
Improvements. Developer shall begin
construction of the Developer Improvements
[DDA § 3.1]
September 1, 2024

12. Completion of Construction of Developer
Improvements. Developer shall complete the
Developer Improvements and Obtain Certificate
of Occupancy permitting occupancy of the
Developer Improvements [DDA § 3.1]
September 1, 2026

13. Issuance of Certificate of Completion [DDA §

3.11*]
Within thirty (30) days following written
request of Developer delivered after
Completion of Developer Improvements
It is understood that the foregoing Schedule of Performance is subject to all of the terms and conditions set forth in the text of this Agreement. The summary of the items of performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any inconsistency between this Schedule of Performance and the text of this Agreement, the text shall govern.

The time periods set forth herein for the Authority’s approval of plans and drawings, and other submittals, submitted to the Authority by the Developer shall only apply and commence upon the Developer’s complete submittal of all the required information. In no event shall an incomplete submittal by the Developer trigger any of the Authority’s obligations of review and/or approval hereunder; provided, however, that the Authority shall notify the Developer of an incomplete submittal as soon as is practicable and in no event later than the applicable time set forth for the Authority’s action on the particular item in question.

ATTACHMENT NO. 4B - 1
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ATTACHMENT NO. 4A

SCOPE OF DEVELOPMENT
General Description
The Authority Property is approximately 1.77 acres in size. Developer shall develop an apartment complex consisting of a minimum of sixty-five (65) units of multi-family housing for seniors age fifty-five (55)+ that shall be income and rent restricted as set forth in the DDA and its attachments.

Residential Units
The Residential Units will be income and rent restricted, as required by the attached DDA. Parking will be provided in attached garages, nearby parking areas, or both.

Architecture
The Developer Improvements to be constructed on the Authority Property shall be of high architectural quality, well landscaped, and efficiently and aesthetically designed. The shape, scale, exterior design and exterior finishes shall conform to the Entitlements (as such term is defined in the DDA).

Amenities
The Developer Improvements will include amenities such as a small walking area, library and game room, kitchenette, and conference/assembly room.

Landscaping
Landscaping will consist of California native, drought tolerant planting materials throughout the community.

Infrastructure
The Developer Improvements shall include grading, storm drain retention, pavement and roadways, parking areas, fencing, onsite pedestrian paths, signage, planters, landscaping, irrigation, pavement patterns, site lighting, utility construction and safety and fire protection access. All Developer Improvements shall be performed in accordance with ADA guidelines, applicable building codes and the Entitlements.
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ATTACHMENT NO. 5-1
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ATTACHMENT NO. 5

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
____________________________
Lancaster Housing Authority
44933 N. Fern Avenue
Lancaster, California 93534
Attention: Executive Director
This document is exempt from the payment of a
recording fee pursuant to Government Code Section
6103.

RESIDENTIAL DECLARATION OF CONDITIONS, COVENANTS

AND RESTRICTIONS AND REGULATORY AGREEMENT

THIS RESIDENTIAL DECLARATION OF CONDITIONS, COVENANTS, AND RESTRICTIONS AND REGULATORY AGREEMENT (the “Declaration”) is made by _________________________, a _________________ (the “Covenanter”), as of this ______ day of _____, 202_.

R E C I T A L S
A. As of the date hereof the Covenanter is the fee owner of record of that certain Authority Parcel (the “Property”) located in the City of Lancaster, County of Los Angeles, State of California, legally described in the attached Exhibit “A”. The Property is the subject of a Disposition and Development Agreement dated as of November 14, 2023 (the “Agreement”) entered into by and between the Lancaster Housing Authority (the “Covenantee”) and Sarh Racine, an individual doing business as Sarah’s Care Home, predecessor in interest to Covenanter, a copy of which is on file with the Covenantee as a public record. Pursuant to the Agreement, the Covenanter is required to execute this Declaration, which has been or shall be recorded among the official land records of the County of Los Angeles.

B. The Agreement provides for the execution and recordation of this document.

NOW, THEREFORE, THE COVENANTER HEREBY DECLARES AS
FOLLOWS:

Capitalized terms used herein shall have the following set forth below:
“Affordability Period” is defined in Section 1(b) hereof.

ATTACHMENT NO. 5-2
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“Affordable Rents” shall have the meaning set forth in Health and Safety Code Section 50053, as in effect of the date hereof, as calculated for lower income households. “Authority” means the Lancaster Housing Authority, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the California Housing Authorities Law, and any assignee of or successor to its rights, powers and responsibilities.
“Authority Parcel” means that certain unimproved and vacant real property, which is more particularly described in Exhibit “A” attached hereto and to be improved with the Developer Improvements.
“Area Median Income” shall mean the area medium income for Los Angeles County, California, adjusted for household size, as determined pursuant to Health and Safety Code Section 50093.
“Certificate of Occupancy” shall mean the certificate issued by the official in the City’s Building Department with authority over such issuance subsequent to the approval of the Developer Improvements.
“Default” means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following thirty (30) days’ notice and opportunity to cure.
“Developer Improvements” means the Residential Units and all other improvements constructed on the Authority Parcel in connection therewith. “Gross Income” shall mean the gross income of a household or family calculated in accordance with Section 6914 of Title 25 of the California Code of Regulations. “Project” means the Residential Units and other Developer Improvements. “Property” means and refers to the Authority Parcel.
“Qualified Resident” means a person or household whose Gross Income is equal to or less than the income limits specified in Section 1(a).
“Residential Units” shall mean the housing units to be constructed by the Developer on the Authority Parcel pursuant and subject to the Agreement.

1. Affordable Housing. The Covenanter shall construct Residential Units on the Authority Parcel. All such Residential Units shall be designated for and occupied by Qualified Residents at Affordable Rents, as follows:
(a) Affordability Requirements. All the Residential Units will be designated for and occupied at Affordable Rents by lower income households as defined by California Health and Safety Code Section 50079.5.

ATTACHMENT NO. 5-3
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(b) Duration of Affordability Requirements. During the entire term of the Affordability Period, Covenanter agrees to make available, restrict occupancy to, and rent the Residential Units to Qualified Residents at affordable rents as set forth in Section (a) above. In addition to any requirements of the Code, Covenanter agrees to comply with the provisions of Health and Safety Code Section 33413 through Section 33418 to the extent necessary to enable the Covenantee to count the units for purposes of meeting the requirements of Section 33413 of the Health and Safety Code. The term “Affordability Period” means the period beginning upon the first day of the first full month following the date on which the first Residential Unit in the Project is occupied and ending on the last day of the 360th month thereafter. (c) Annual Reports. Upon Covenantee’s request, Covenanter, at its expense, shall submit to the Covenantee the reports required pursuant to Health and Safety Code Section 33418, as the same may be amended from time to time, with each such report to be in the form prescribed by the Covenantee. Each annual report shall cover the immediately preceding fiscal year.
(d) Long Term Management of the Property. The parties acknowledge that the Covenantee is interested in the long-term management and operation of the Property and in the qualifications of any person or entity retained by the Covenanter for that purpose (the “Property Manager”). The Covenantee may from time-to-time review and evaluate the identity and performance of the Property Manager of the Property and the Property Manager’s compliance with the provisions of this Declaration. If the Covenantee determines that the performance of the Property Manager is deficient based upon the standards and requirements set forth in this Declaration, the Covenantee shall provide notice to the Covenanter of such deficiencies and the Covenanter shall use its best efforts to correct such deficiencies. Upon Default of the terms of this Declaration by the Property Manager, the Covenantee shall have the right to require the Covenanter to immediately remove and replace the Property Manager with another property manager or property management company who is reasonably acceptable to the Covenantee, who may be related to or affiliated with the Covenanter, and who is experienced in managing multifamily residential developments.

2. Compliance with Declaration. Covenanter shall commence and complete the construction of the Property, and carry out the design, construction as evidenced by the issuance of the Certificate of Occupancy, and operation of the Project in compliance with all applicable laws, and in accordance with the Declaration.

3. Non-Discrimination Covenants. Covenanter by and for itself, its successors and assigns, and all persons claiming under or through them agrees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall Covenanter 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, subleases, or vendees in the Property.

4. Maintenance of the Property. The Covenanter shall maintain or cause to be ATTACHMENT NO. 5-4
4885-1338-3052v2/022283-0545
maintained the interiors and exteriors of the Property in a decent, safe and sanitary manner, in accordance with the standard of maintenance of similar housing units within the City, and in accordance with the maintenance standards which are set forth in the Declaration. None of the dwelling units on the Property shall at any time be utilized on a transient basis nor shall the Property or any portion thereof ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest home. The Covenanter shall not convert the Property to condominium ownership without the prior written approval of the Covenantee, which approval the Covenantee may grant, withhold or deny in its sole and absolute discretion. If at any time Covenanter fails to maintain the Property in accordance with this Declaration and Covenantor fails to correct or commence to correct such condition within ten (10) days after written notice from the Covenantee (with a copy to the then existing lenders for the Project) with respect to graffiti, debris, waste material, and general maintenance, or thirty days after written notice from the Covenantee with respect to landscaping and building improvements, then the Covenantee, in addition to whatever remedy it may have at law or at equity, shall have the right to enter upon the applicable portion of the Property and perform all acts and work necessary to protect, maintain, and preserve the Developer Improvements and landscaped areas on the Property, and to attach a lien upon the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the Covenantee and/or costs of such cure, including a five percent 5% administrative charge, which amount shall be promptly paid by Covenanter to the Covenantee upon demand; provided, however, that such right to enter is subordinate to any existing or future mortgage or deed of trust.

Covenanter shall properly maintain the buildings, landscaping and yard areas on the Property, in accordance with the City’s Municipal Code and according to the following standards:
(a) No improperly maintained landscaping shall be visible from public rights of way, including:
(i) no lawns with grasses in excess of six (6) inches in height; (ii) no untrimmed hedges;
(iii) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance;
(iv) no trees and shrubbery grown uncontrolled without proper pruning; (v) no vegetation so overgrown as to be likely to harbor rats or vermin; (vi) no dead, decayed or diseased trees, weeds and other vegetation. (b) No yard areas or balconies shall be left unmaintained, including:
(i) no broken or discarded furniture, appliances and other household equipment stored in yard areas for periods exceeding one (1) week; ATTACHMENT NO. 5-5
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(ii) no packing boxes, lumber, trash, dirt and other debris stored in yards for periods exceeding one (l) week in areas visible from public property or neighboring properties;
(iii) no unscreened trash cans, bins or containers stored for unreasonable periods in areas visible from public property or neighboring properties; and (iv) no vehicles parked or stored in other than approved parking areas. (c) No buildings may be left in an unmaintained condition, including:
(i) no violations of state law, uniform codes, or City ordinances; (ii) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance;
(iii) no broken windows or chipped, cracked or peeling paint; and (iv) no conditions constituting hazards and/or inviting trespassers or malicious mischief

5. Covenants Do Not Impair Lien. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest given by Covenanter in connection with the Property as improved by the Development Improvement, and this Declaration shall be subordinate to any such existing or future mortgage, deed of trust or security interest.

6. Conflict with Other Laws; Severability. In the event that any provision of this Declaration is found to be contrary to applicable law or any other provision of this Declaration, then the contrary provisions of this Declaration shall be deemed to mean those provisions which are enforceable and consistent with such laws and policies. The remaining portions of this Declaration shall be deemed modified in a manner which is consistent with the goals and intent of this Declaration to provide housing to lower income residents as set forth in this Declaration.

Every provision of this Declaration is intended to be severable. In the event any term or provision of this Declaration is declared by a court of competent jurisdiction to be unlawful, invalid or unenforceable for any reason, such determination shall not affect the balance of the terms and provisions of this Declaration, which terms and provisions shall remain binding and enforceable.

7. Covenants For Benefit of City and Covenantee. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and the City and such covenants shall run in favor of the Covenantee and the City for the entire period during the Affordability Period. The parties shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper legal proceedings to ATTACHMENT NO. 5-6
4885-1338-3052v2/022283-0545
enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term.
specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity.

8. Notices, Demands and Communications. Written notices, demands and communications between the Covenanter and the Covenantee shall be sufficiently given if delivered by hand or dispatched by registered or certified mail, postage prepaid, return receipt requested, as follows:

Covenanter: ________________________
c/o Racine Shirley Investments LLC
43861 Ryckebosch Lane
Lancaster, CA 93535
Attention: Sarah Shirley
Covenantee: Lancaster Housing Authority
44933 N. Fern Avenue
Lancaster, CA 93534
Attention: Executive Director
Such addresses for notice may be changed from time to time upon notice to the other party.

Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the fifth (5th) calendar day from the date it is postmarked if delivered by registered or certified mail.

9. Expiration Date. This Declaration shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period, except as otherwise provided in this Declaration.

10. Covenantee Remedies. The occurrence of any Default under this Declaration will, either at the option of the Covenantee or automatically where so specified, entitle the Covenantee to proceed with any and all remedies, including but not limited to the following:
(a) Specific Performance. The Covenantee shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Covenanter to perform its obligations and covenants under this Declaration or to enjoin acts or things which may be unlawful or in violation of the provisions of this Declaration.
(b) Right to Cure at Covenanter’s Expense. The Covenantee shall have the right to cure any monetary default by Covenanter under a loan or grant; provided, however, that if the Covenanter is in good faith contesting a claim of default under a loan and the Covenantee’s interest under this Declaration is not imminently threatened by such default, the Covenantee shall not have the right to cure such default. The Covenanter agrees to reimburse the Covenantee for ATTACHMENT NO. 5-7
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any funds advanced by the Covenantee to cure a monetary default by Covenanter upon demand therefore, together with interest thereon at the rate of ten percent (10%) per annum, from the date of expenditure until the date of reimbursement.

IN WITNESS WHEREOF, the Covenanter has caused this instrument to be executed on its behalf by its officers hereunto duly authorized as of the date set forth above.

COVENANTER:
_________________________,
a ______________________
By: _____________________________
Name: _____________________________
Its: _____________________________
EXHIBIT “A”
TO ATTACHMENT NO. 5
4885-1338-3052v2/022283-0545
EXHIBIT “A”
TO ATTACHMENT NO. 5

AUTHORITY PARCEL LEGAL DESCRIPTION
Parcel 7
APN: 3123-014-905
LOT 14 AND 15 OF TRACT NO. 22804, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK, 609 PAGES 71 TO 73 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

INTENTIONALLY OMITTED
ATTACHMENT NO. 7-1
4885-1338-3052v2/022283-0545
ATTACHMENT NO. 7

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

Lancaster Housing Authority
44933 N. Fern Avenue
Lancaster, California 93534
Attention: Executive Director
This document is exempt from the payment of a
recording fee pursuant to Government Code Section
6103.

MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT (“Memorandum”), dated as of May 10, 2023, for identification purposes, is entered into by and between LANCASTER HOUSING AUTHORITY, a public body corporate and politic (“Authority”), and RACINE SHIRLEY INVESTMENTS LLC, a California limited liability company (“Developer”).

1. Agreement. Authority and Developer have entered into a Disposition Development Agreement (“Agreement”), which provides for the Authority’s disposition of that certain unimproved and vacant real property located in the City of Lancaster, County of Los Angeles, State of California, more fully described in Exhibit “A” attached hereto and incorporated herein by this reference (the “Authority Parcel”) to the Developer for Developer’s development of the Authority Parcel. The Agreement is available for public inspection and copying at the office of the Lancaster Housing Authority, 44933 N. Fern Avenue, Lancaster, California. All of the terms, conditions, provisions and covenants of the Agreement are incorporated in this Memorandum by reference as though written out at length herein, and the Agreement and this Memorandum shall be deemed to constitute a single instrument or document.

2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants of the Agreement.

In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the Agreement, the terms, conditions, provisions and covenants of the Agreement shall prevail.
[SIGNATURES BEGIN ON NEXT PAGE]
ATTACHMENT NO. 5-2
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The parties have executed this Memorandum of Agreement on the dates specified immediately adjacent to their respective signatures.

DEVELOPER:

RACINE SHIRLEY INVESTMENTS LLC, a
California limited liability company
By: _____________________________
Name: Sarah Shirley
Its: Principal
AUTHORITY:

LANCASTER HOUSING AUTHORITY,
a public body corporate and politic
By: _____________________________
Name: _____________________________
Its: _____________________________

EXHIBIT A
ATTACHMENT NO. 7
4885-1338-3052v2/022283-0545
EXHIBIT “A”
TO ATTACHMENT NO. 7

ATTACHMENT NO. 8-1
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ATTACHMENT NO. 8

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

DEED OF TRUST WITH ASSIGNMENT OF RENTS
(SHORT FORM)
This DEED OF TRUST, dated as of __________, 202__, between ______________________., a _________________, herein called “Trustor”, whose address is [trustor’s address], [trustee’s name], a California corporation, herein called “Trustee”, and the LANCASTER HOUSING AUTHORITY, a public body, corporate and politic, herein called “Beneficiary”, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Lancaster, County of Los Angeles, State of California, described as:

See Exhibit A attached hereto.
together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) Trustor’s performance of that certain Disposition and Development Agreement dated as of November 14, 2023 (“DDA”), entered into by and between Racine Shirley Investments LLC, a California limited liability company, predecessor in interest to Trustor, and Beneficiary, (2) Trustor’s performance of each agreement or other document attached to and incorporated in the DDA and (3) payment of any sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.

To protect the security of this Deed of Trust, and with respect to the property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in ATTACHMENT NO. 6

Page 2 of 2 ends

DOCSOC\991601v2\22087.0177
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the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely:
(continued on next page)
ATTACHMENT NO. 8-3
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COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Venture 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633
Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B, (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law.

The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth.

Signature of Trustor

STATE OF CALIFORNIA
COUNTY OF _______________________________
On _____________________________________ before me, Notary Public, __________________________________________,
personally appeared ______________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/here/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature ____________________________________
_______________________,
a __________________________
By: ____________________________
Name: ______________________
Title: ____________________________
(This area for official notarial seal)
(continued on next page)
4885-1338-3052v2/022283-0545

DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.

A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon, not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed.
(4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.

Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defeat any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.

B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such monies received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. (2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. (3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof.
(4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof.

The Grantee in such reconveyance may be described as “the person or persons legally entitled thereto”. (5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto 4885-1338-3052v2/022283-0545
Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
(6) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby.

After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale.

Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.

After deducting all costs, fees and expenses of trustee and of this Trust, including costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. (8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. (9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. 4885-1338-3052v2/022283-0545

DO NOT RECORDREQUEST FOR FULL RECONVEYANCE
TO FIRST AMERICAN TITLE INSURANCE COMPANY, TRUSTEE:

The undersigned is the legal owner and holder of the note and of all indebtedness secured by the foregoing Deed of Trust. Said note, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same.

Dated _______________________________________
____________________________________________________
____
____________________________________________________
____
Please mail Deed of Trust,
Note and Reconveyance to
Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made.
4885-1338-3052v2/022283-0545
EXHIBIT “A”
TO ATTACHMENT NO. 8
Parcel 7
APN: 3123-014-905
LOT 14 AND 15 OF TRACT NO. 22804, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK, 609 PAGES 71 TO 73 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

FORM OF PHASE CERTIFICATE OF COMPLETION

FORM OF CERTIFICATE OF COMPLETION

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
_________________________________
c/o Racine Shirley Investments LLC
43861 Ryckebosch Lane
Lancaster, CA 93535
Attention: Sarah Shirley
APN: SPACE ABOVE FOR RECORDER’S USE Recording fee exempt per Govt. § 27383.

CERTIFICATE OF COMPLETION

OF CONSTRUCTION AND DEVELOPMENT

THIS CERTIFICATE OF COMPLETION OF CONSTRUCTION AND
DEVELOPMENT (the “Certificate”) is made by LANCASTER HOUSING AUTHORITY, a public body, corporate and politic (the “Authority”), in favor of Racine Shirley Investments LLC, a California limited liability company.

RECITALS
A. The Authority and Racine Shirley Investments LLC, a California limited liability company, predecessor in interest to Developer, entered into that certain Disposition and Development Agreement dated as of November 14, 2023 (the “DDA”), concerning the development of certain real property situated in the Authority of Lancaster, County of Los Angeles, California as more fully described in Exhibit A attached hereto (the “Phase Parcel”).

B. As referenced in the DDA, the Authority is required to furnish Developer or its successors with a Certificate of Completion upon completion of construction (as defined in the DDA) on the Authority Parcel (as defined in the DDA and legally described on Exhibit A attached hereto), which Certificate is required to be in such form as to permit it to be recorded in the Recorder’s Office of Los Angeles County. This Certificate constitutes conclusive evidence of the Authority’s determination that the development and construction of the Developer Improvements has been satisfactorily completed as required by the DDA.

C. The Authority has conclusively determined that such construction and development of the Developer Improvements under the DDA has been satisfactorily completed on the Authority Parcel designated herein.
2 DOCSOC\991601v2\22087.0177
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NOW THEREFORE:

1. As provided in the DDA, the Authority does hereby certify that the construction of the Developer Improvements has been satisfactorily performed and completed on the Authority Parcel, and that such development and construction work comply with the DDA.

2. This Certificate of Completion does not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a deed of trust or mortgage or any insurer of a deed of trust or mortgage issued as security for money loaned to finance the work of construction of improvements on and development of the Authority Parcel, or any part thereof.

This Certificate of Completion is not a notice of completion as referred to in Section 3093 of the California Civil Code.
3 DOCSOC\991601v2\22087.0177
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IN WITNESS WHEREOF, the Authority has executed this Certificate as of this _____ day of ______________, 202_.

AUTHORITY:

LANCASTER HOUSING AUTHORITY,
a public body corporate and politic
By: _____________________________
Name: _____________________________
Its: _____________________________
APPROVED AS TO FORM:

Authority Deputy Executive Director
ATTEST:

Authority Secretary
APPROVED AS TO FORM:

Authority Counsel
-4-

EXHIBIT A

LEGAL DESCRIPTION OF AUTHORITY PARCEL
Parcel 7
APN: 3123-014-905
LOT 14 AND 15 OF TRACT NO. 22804, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK, 609 PAGES 71 TO 73 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

STAFF REPORT
City of Lancaster
NB 1
11/14/2023
JC
Date: November 14, 2023
To: Mayor Parris and City Council Members
From: Andrea Alexander, City Clerk
Subject: Advisory Ballot Measure April 09, 2024 General Municipal Election Recommendation:

It is recommended that the City Council:

1. Consider the proposed advisory vote to gauge public sentiment on exploring and potentially establishing a drug treatment program similar to Teen Challenge.

2. Approve Resolution No. 23-XX, a resolution of the City Council of the City of Lancaster, California, Approving the submission of an advisory measure to the voters to pursue a drug treatment program.

3.Authorize the City Clerk, or their designee, to place the advisory vote on the upcoming ballot.

Fiscal Impact:

Estimated costs associated with conducting the advisory vote is included in the cost and appropriated budget in the General Fund.

Background:

The City of Lancaster has observed a growing concern over drug-related issues among its residents. As part of our ongoing commitment to addressing these challenges, the City is considering multiple solutions, one of which is the establishment of a drug treatment program.

Teen Challenge, a nationally recognized program, has showcased promising outcomes in drug rehabilitation. Its comprehensive approach offers potential insights for a similar initiative in our City.

Discussion:

By placing this advisory vote on the ballot, the City Council has the opportunity to directly engage with residents and gather their perspective on the importance and feasibility of such a program in our community. Feedback garnered from this vote will guide future decisions and strategies.

While the current recommendation focuses on gauging public sentiment, should the advisory vote favor 1 4
2 9
the establishment of the program, a more detailed proposal, including fiscal and operational implications, will be developed for further council consideration.

Attachment:

Resolution No.

RESOLUTION NO. 23-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LANCASTER, CALIFORNIA, APPROVING THE SUBMISSION OF AN

ADVISORY MEASURE TO THE VOTERS TO PURSUE A DRUG

TREATMENT PROGRAM
WHEREAS, Whereas, the City Council recognizes the significance of addressing drug- related issues within our community; and
WHEREAS, drug treatment programs have shown effectiveness in rehabilitating individuals and reducing societal issues arising from drug abuse; and WHEREAS, programs such as Teen Challenge have provided valuable insights into the potential benefits of such treatment methods,

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LANCASTER,

CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. The foregoing recitals are true and correct and are a substantive part of this Resolution.

SECTION 2. The City Council proposes to seek the opinions of its residents through an advisory vote at the Election on April 9, 2024.

SECTION 3. Pursuant to Elections Code Section 9203, the City Council hereby submits the proposed advisory measure to the voters at the Election and orders the following question to be submitted to the voters at the Election:
“Do you support the City of Lancaster exploring and potentially establishing a drug treatment program similar to Teen Challenge to address drug-related issues within our community?”
SECTION 5. Notice of the time and place of holding the election is hereby given, and the City Clerk or Acting City Clerk is authorized, instructed and directed to give further or additional notice of the Election, in time, form and manner as required by law.

SECTION 6. Pursuant to Elections Code Section 9280, the City Council hereby directs the City Clerk or Acting City Clerk to transmit a copy of the measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the measure, not to exceed 500 words in length, showing the effect of the measure on the existing law and the operation of the measure, and transmit such impartial analysis to the City Clerk or Acting City Clerk on or before November 28, 2024.

SECTION 7. Pursuant to Elections Code Section 9286, et seq., November 7, 2024 at 5:00 p.m. shall be the deadline for submission of arguments in favor of, and arguments against, any local measures on the ballot. If more than one argument for and/or against is received, the priorities established by Elections Code Section 9287 shall control.

Resolution No. 23-XX

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SECTION 8. The provisions of Elections Code Section 9285 shall control the submission of any rebuttal arguments. The deadline for filing rebuttal arguments shall be November 28, 2023 at 5:00 p.m.

SECTION 9. The City Council acknowledges that the Election will be held and conducted according to procedures in the Elections Code, including Section 10418.

PASSED, APPROVED and ADOPTED this 14h day of November, 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST: APPROVED:
______________________________ _________________________ ANDREA ALEXANDER R. REX PARRIS
City Clerk Mayor
City of Lancaster City of Lancaster
Resolution No. 23-XX

Page 3 ends

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss

CITY OF LANCASTER )

CERTIFICATION OF RESOLUTION

CITY COUNCIL
I, ___________________________, __________________________, City of Lancaster, CA. do hereby certify that this is a true and correct copy of the original Resolution No. 23-XX, for which the original is on file in my office.

WITNESS MY HAND AND THE SEAL OF THE CITY OF LANCASTER, on this _______, day of ___________________________, __________.
(seal)
_______________________________________

Lancaster City CouncilNovember 14, 2023

Lancaster City Council
November 14, 2023