Palmdale City Council
July 13, 2022

The Council Chamber is open for in-person public comment and seating.

The Mayor and/or one or more members of the City Council may participate virtually in this meeting.

How to observe the meeting virtually:

1. Spectrum local access Channel 27

2. Online live webcast at www.cityofpalmdale.org.

How to Submit Public Comments:

VERBAL PUBLIC COMMENT DURING THE MEETING – ZOOM Number: US: +1 720 707 2699 Webinar ID: 868 2495 2455 Passcode: 606380
Webinar attendee link
https://us06web.zoom.us/j/86824952455?
pwd=cFFXb3grSXdxWm1VbmJZZEtVSmVldz09
.

Verbal comments are typically limited to three (3) minutes unless otherwise directed by the chair of the meeting. Public comments submitted will become part of the official meeting record.

The safety and well-being of employees and the public remains the city's top priority. The

CITY COUNCIL MEETING

SUCCESSOR AGENCY/HOUSING AUTHORITY

CITY COUNCIL CHAMBERS
38300 SIERRA HIGHWAY

SUITE B
PALMDALE, CA 93550
WEDNESDAY, JULY 13, 2022
5:00 PM
7:00 PM
www.cityofpalmdale.org

WELCOME
City Council
Wednesday, July 13, 2022
City of Palmdale appreciates your patience and understanding during these challenging times.

The City Council is making every effort to follow the spirit and intent of the Ralph M.

Brown Act and other applicable laws regulating the conduct of public meetings in order to maximize transparency and public access.

In accordance with the Americans with Disabilities Act of 1990, if you require a disability- related modification or accommodation to participate in this meeting, please contact the City Clerk’s Office at (661) 267-5151 at least 72 hours prior to the meeting.

If you require oral Spanish translation, please contact the City Clerk’s Office at (661) 267- 5151 at least 72 hours prior to the meeting.

Your courtesy is requested to help our meetings run smoothly. If you’ll be kind enough to follow these simple rules, we can make the best possible use of your time and ours:

Please refrain from public displays or outbursts, such as unsolicited applause, comments, cheering, foul language or obscenities.

Any disruptive activities that substantially interfere with the ability of the City Council to carry out its meeting will not be permitted and offenders will be asked to leave the meeting.

Please turn off/mute your cell phones and mobile devices.

5:00 P.M.

1. MAYOR TO CALL MEETINGS TO ORDER

2. ROLL CALL

MAYOR HOFBAUER, MAYOR PRO TEM LOA,

COUNCILMEMBERS CARRILLO, BISHOP, BETTENCOURT

3. PUBLIC COMMENTS
Pursuant to Government Code section 54954.3, members of the public are provided opportunities to address the City Council/Authority. You may address the Council/Authority once per meeting during Public Comments on any matter within the Council's/Authority's jurisdiction that is not listed on the agenda. Please submit a Speaker's Form to the City Clerk
BEFORE
this portion of the meeting begins. To address
the Council/Authority regarding an item on the agenda, please fill out a Speaker's Form and submit it to the City Clerk
BEFORE
the Mayor/Chair announces the item. Each
person addressing the Council/Authority is customarily given up to three minutes to speak (with double the time allotted to non-English speakers using a translator). The amount of City Council
Wednesday, July 13, 2022
time authorized may be adjusted by the chair. If you wish to provide information to the Council/Authority, please present the City Clerk with 7 copies. Otherwise, your materials will simply be added to the administrative record. If you are attending the meeting by phone, please press *9 to "raise your hand." If attending by personal computer, please click the "raise your hand" button. Press *6 to un-mute yourself, state your name and begin speaking.

4. PRESENTATION BY CITY ATTORNEY

4.1 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Donald Ross D'Angelo v. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 21AVCV00441
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.2 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Jessica Magallanes v. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 21AVCV00932
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.3 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Robert Credle v. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 22AVCV00273
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.4 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION
Gerald Lynn Dolen and Roberta Dora Dolen v. City of Palmdale et al.

Los Angeles County Superior Court
Case No. 21AVCV00377
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.5 CONFERENCE WITH REAL PROPERTY NEGOTIATORS
The reason for holding a closed session is for the purpose of obtaining authorization and direction from the City Council regarding the possible acquisition of property interests in the following property, generally located near Avenue M and 10th Street West:

City Council
Wednesday, July 13, 2022

Property Owner: Successor Agency to the Community Redevelopment Agency of the City of Palmdale
Property: APN 3128-015-900 & 902
City Negotiator: Luis Garibay
This closed session is being held pursuant to the authority of California Government Code Section 54956.8. Closed session is recommended because the City Council will be instructing the negotiator regarding terms and conditions, including price, for the possible purchase of the real property identified above.

5. ANNOUNCEMENT BY CITY ATTORNEY

6. ADJOURN CLOSED SESSION MEETING

7:00 P.M.

7. PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE IN HONOR OF OUR TROOPS

8. ROLL CALL

MAYOR/CHAIR HOFBAUER, MAYOR PRO TEM/VICE CHAIR LOA,

COUNCILMEMBERS/DIRECTORS/COMMISSIONERS CARRILLO, BISHOP,

BETTENCOURT, FRAGA-SAENZ, DENNY

9. PRESENTATIONS

9.1 Presentation of a cute critter available for adoption at the Palmdale Animal Care Center.

9.2 Presentation of Certificates of Recognition by Mayor and Council to the Antelope Valley Futbol Club (AVFC) for winning the Presidents Cup.

9.3 Presentation of a Proclamation by Mayor and Council declaring July 2022 as California Firefighter Appreciation Month in the City of Palmdale.

10. WAIVER OF FULL READING OF RESOLUTION(S) and ORDINANCE(S) Staff Recommendation: Move to waive full reading of the Resolution (s) and/or Ordinance(s) to be considered and voted on at this meeting.

City Council
Wednesday, July 13, 2022

11. PUBLIC COMMENTS
Pursuant to Government Code section 54954.3, members of the public are provided opportunities to address the City Council/Authority. You may address the Council/Authority once per meeting during Public Comments on any matter within the Council's/Authority's jurisdiction that is not listed on the agenda. Please submit a Speaker's Form to the City Clerk
BEFORE
this portion of the meeting begins. To address
the Council/Authority regarding an item on the agenda, please fill out a Speaker's Form and submit it to the City Clerk
BEFORE
the Mayor/Chair announces the item. Each
person addressing the Council/Authority is customarily given up to three minutes to speak (with double the time allotted to non-English speakers using a translator). The amount of time authorized may be adjusted by the chair. If you wish to provide information to the Council/Authority, please present the City Clerk with 7 copies. Otherwise, your materials will simply be added to the administrative record. If you are attending the meeting by phone, please press *9 to "raise your hand." If attending by personal computer, please click the "raise your hand" button. Press *6 to un-mute yourself, state your name and begin speaking.

12. HOUSING AUTHORITY CONSENT CALENDAR
All matters listed under the Housing Authority Consent Calendar will be enacted by one motion unless an item(s) is pulled by Authority, in which case the item(s) will be removed from the Calendar and will be considered separately following this portion of the Agenda.

12.1 Adopt Resolution No. HA 2022-002, a Resolution of the Housing Authority of the City of Palmdale approving Affordable Housing Agreement with SOS Children's Villages California and Housing Authority development loan of $1,200,000 for acquisition and pre-development located at 30th Street East and adjacent to McAdam Park (APN 3018-026-001). (Staff Reference Director Neighborhood Services Miller - Presented by Housing Manager Reyes)

01a HA SR - SOS Children's Villages 7.13.2022.docx

01b HA Reso 2022-002 SOS Children's Villages v2 clean.doc

Affordable Housing Agreement SOS Village-complete 07.05.2022.pdf

12.2 Approve the minutes from the previous meetings. (Staff Reference: City Clerk/Agency Secretary Smith)

HA - May 18, 2022
HA - June 1, 2022

05 18 2022 Minutes CC_SA_HA_IDA_PAA_PCA_PFA.pdf

06 01 2022 Minutes CC_SA_HA_PCA_PFA.pdf
City Council
Wednesday, July 13, 2022

13. CONSENT CALENDAR
All matters listed under the Consent Calendar will be enacted by one motion unless an item(s) is pulled by Council, in which case the item(s) will be removed from the Calendar and will be considered separately following this portion of the Agenda.

13.1 Receive and file the monthly investment activity reports for May 2022. (Staff Reference: Director of Finance Samson)

Staff_Report_-_Investment_Report_May_2022.docx

11 May 2022 Investment Reports.pdf

13.2 Approve on-call Environmental Consulting Services Agreement with Pacific Edge Engineering, Inc. in the amount of $300,000 over a period of three (3) years. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

2022-2024_On-Call_Environmental_Services_-_Award_Contract.docx

Scan_Agreement_Ongoing Engineer Contract_ (A-7960)_Signed by Consultant

6.22.22.pdf

13.3 Ratify additional funds for Purchase Order No. 20220033 (FY 2021-2022) and approve Purchase Order No. 20230003 (FY 2022-2023) in an amount not to exceed $120,000.00 with Hasa, Inc. for pool chemical supplies. (Staff Reference:

Director of Public Works Heffernan)

SR Approve Hasa, Inc PO 20230003 & Ratify 20220033.docx

3. Purchase Order No. 20230003 HASA, INC.pdf

2. Price Schedule IFB No. 21-002-3400 Hasa, Inc. FY 22-23.pdf

1. Purchase Order No. 20220033 HASA, INC-REVISED.pdf

13.4 Approve Purchase Order No. 20230002 with Nutrien AG Solutions for fertilizer supplies in an amount not to exceed $145,750. (Staff Reference: Director of Public Works Heffernan)

SR Approve Nutrien AG Solutions PO 20230002 First OTE.docx

Price Schedule IFB No. 21-001-3610 Nutrien AG FY 22-23.pdf

Purchase Order No. 20230002 NUTRIEN AG SOLUTIONS.pdf

13.5 Approve Purchase Order No. 20230004 with Smith Pipe & Supply, Inc. for irrigation and water conservation supplies in an amount not to exceed $233,600. (Staff Reference: Director of Public Works Heffernan)

SR Approve Smith Pipe & Supply PO 20230004 First OTE.docx

Price Schedule IFB No. 21-002-3600 Smith Pipe & Supply FY 22-23.pdf

Purchase Order No.
20230004 SMITH PIPE & SUPPLY INC.pdf

City Council
Wednesday, July 13, 2022

13.6 Approve the First Amendment with Pumpman, LLC to exercise the first option to extend contract term and increase total price by $430,000, not to exceed the amount of $1,280,000 for professional pump services. (Staff Reference: Director of Public Works Heffernan)

SR_Approve_First_Amendment_to_Agreement_No._A-6770_PumpMan__LLC.docx

A-6770-01 Pumpman LLC Amd 1_1stOTE signed.pdf

13.7 Notice of Completion - Accept Public Improvements for Fairfield Inn located at 1052 West Avenue O-8. (Staff Reference: Director of Public Works Heffernan)

SR-07132022 19-01.docx

EXHIBIT A 19-01.docx

EXHIBIT B.docx

NOC_19-01 PC & SD IMPROVEMENTS.doc

13.8 Approve Final Parcel Map No. 83025 located at the northeast corner of 5th Street West and West Park Drive. (Staff Reference: Director of Public Works Heffernan)

071322, PM 83025 - Staff Report.docx

Final Parcel Map No 83025.pdf

13.9 Award construction agreement with R.C. Becker and Son, Inc., for PN 761, Palmdale Civic Center Complete Streets Project, in the amount of $6,405,637 for a term of 12 months from the date of Notice to Proceed. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Staff Report PN 761 - Civic Center Complete streets.docx

13.10 Award construction agreement with Parkwood Landscape Maintenance, Inc., for PN 815, LMD 214 Landscape Enhancements Project, at the north side of East Avenue S between 43rd Street East and 45 Street East, in the amount of $178,208.10 for a term of 90 days from the date of Notice to Proceed. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Staff Report - PN 815 - LMD 214 - Award Construction.docx

Site map.pdf

13.11 Award construction agreement with Cal-Stripe, Inc., for PN 820, Domenic Massari Park Bike Lane System Project, in the amount of $295,374, for a term of 2 months from the date of Notice to Proceed. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Staff Report PN 820 - ATP Domenic Massari Park Bike Lane.docx

13.12 Adopt Resolution No. CC 2022-070, a Resolution of the City Council of the City of Palmdale to accept and irrevocable offer to dedicate private streets of Tract 54058-3 at the southeast corner of 25th Street West/Highland Street and Avenue City Council
Wednesday, July 13, 2022
P-12. (Staff Reference: Director of Public Works Heffernan)

SR_Resolution_CC_2022-070.doc

Resolution_No._CC_2022-070.doc

Recorded Tract 54058-3.pdf

Reso 2022-070 Exhibit 'A' and 'B'.pdf

13.13 Approve Final Tract Map No. 71357-01 located near the intersection of Rancho Vista Boulevard and Delson Drive. (Staff Reference: Director of Public Works Heffernan)

071322, TR 71357-01 - Staff Report.docx

Tract Map No. 71357-01.pdf

13.14 Notice of Completion - Accept completed project with Playcore Wisconsin, Inc., dba Gametime for PN 846, Courtney's Playground Inclusive Play Area at Marie Kerr Park. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Courtney's Playground SR.docx

NOC Courtney's Playground.doc

13.15 Approve Supplement Agreement No. 2 with Cedro Construction Inc., for PN 741- A, Water Improvements at Avenue S-8 and 40th Street East, in the amount of $63,979.75. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Stf Rpt Supplemental 2 - PN 741A.docx

PN 741A - Supplemental 2 - Cedro Construction.pdf

13.16 Notice of Completion - Accept completed project with Cedro Construction Inc., for PN 741-A, Water Improvements at Avenue S-8 and 40th Street East. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Stf Rpt NOC PN 741A.docx

NOC PN 741A.doc

13.17 Notice of Completion - Accept completed project with Knorr Systems, Inc. for PN 841, Pool Boiler Replacement at Various City Pools. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Work Glidden)

Staff Report NOC PN 841.docx

NOC PN 841.doc

13.18 Approve Insurance Broker Services Agreement with VINSA, Inc. and Authorize City Manager to Execute Agreement and Bind Insurance Coverage in an amount not to exceed $1,750,000 (Staff Reference: Acting City Attorney Porter - Presented by Legal and Risk Assistant Barajas)

Staff Report - VINSA A-7994 (2022) final.docx

VINSA - Insurance Broker Services Agreement - final.pdf City Council
Wednesday, July 13, 2022

Current Insurance Projections 2022-2023.pdf

13.19 Adopt Resolution No. CC 2022-080, a Resolution of the City Council of the City of Palmdale amending the City’s Classification and Pay Plans. (Staff Reference:

Human Resources Manager Nevarez)

SR_Class_and_Pay_Plan_for_Budget_071322.docx

Reso_CC_No._2022.080.doc

Exhibit 1 - 7.4.22 CLASSIFICATION AND PAY PLAN General Positions.pdf

Exhibit 2 - 7.4.22 CLASSIFICATION AND PAY PLAN BARGAINING UNIT.pdf

Exhibit 3 - 7.4.22 CLASSIFICATION AND PAY PLAN RECREATION.pdf

13.20 Approve Side Letter of Agreement
between the City of Palmdale and California
Teamsters Local 911 regarding Premium Pay, Cost of Living Increase, and change to Deferred Compensation language of the MOU (Staff Reference: Human Resources Manager Nevarez.)

SR-Side_Letter_with_Union_on_Meet_and_Confer_0722.docx

Side Letter Meet and Confer 070122.docx

13.21 Adopt Resolution No. CC 2022-083, a Resolution of the City Council of the City of Palmdale reinstating the cap requirement for employee vacation accrual bank balances. (Staff Reference: Human Resources Manager Nevarez)

SR_Reinstate_Vac_Cap_Rule_0722.docx

Reso CC 2022.083
071322.doc

exhibit_1_cap_vacation.pdf

13.22 Adopt Resolution No. CC 2022-081, a Resolution of the City Council of the City of Palmdale Making Legally Required Findings for Extending Remote Teleconference Participation for Meetings of the City Council and its Related and/or Subordinate Legislative Bodies. (Staff Reference: Acting City Attorney Porter)

SR_-_RESO_Authorizing_Remote_Meetings__002_ (2).docx

RESO_-081Continuing_Remote_Meeting_authorization_-_For_July_13_2022.docx

13.23 Approve the minutes from the previous meetings. (Staff Reference: City Clerk/Agency Secretary Smith)

CC/SA/IDA/PAA/PCA/PFA - May 18, 2022
CC/SA/PCA - June 1, 2022
CC - June 3, 2022

05 18 2022 Minutes CC_SA_HA_IDA_PAA_PCA_PFA.pdf

06 01 2022 Minutes CC_SA_HA_PCA_PFA.pdf

06 03 2022 Minutes CC.pdf

City Council
Wednesday, July 13, 2022

14. PUBLIC HEARING

14.1 Public Hearing and Review of Proposed Resolution No. CC 2022-041 for adoption regarding drainage benefit assessments. (Staff Reference: Director of Public Works Heffernan)

RESOLUTION NO. CC 2022-041, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE APPROVING THE ENGINEER'S REPORT AND THE

CONTINUATION OF THE LEVY AND COLLECTION OF ASSESSMENTS FOR FISCAL YEAR 2022/2023 FOR THE CITY OF PALMDALE DRAINAGE BENEFIT ASSESSMENT DISTRICTS NO. 1 AND NO. 2006-02

Palmdale DBAD - Staff Report 7-13-22_v1.docx

Palmdale DBAD - Res 3 #CC 2022-041 for 7-13-2022_v1.docx

Drainage Engineers Report FY 2022-23 (2).pdf

14.2 Public Hearing and Review of Proposed Resolution No. CC 2022-042 for adoption regarding landscape, parks and streetlight maintenance assessments. (Staff Reference: Director of Public Works Heffernan)

RESOLUTION NO. CC 2022-042, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE APPROVING THE ENGINEER'S REPORT AND THE

CONTINUATION OF THE LEVY AND COLLECTION OF ASSESSMENTS FOR FISCAL YEAR 2022/2023 FOR THE CITY OF PALMDALE LANDSCAPE

MAINTENANCE ASSESSMENT DISTRICTS AND ANNEXATIONS, PARK

MAINTENANCE AND RECREATION IMPROVEMENT DISTRICT, AND

STREETLIGHT MAINTENANCE ASSESSMENT DISTRICTS AND

ANNEXATIONS

Palmdale LMDParkSMD - Staff Report_final.docx

Palmdale LMDParkSMD - Res 3 #CC 2022-042_final.docx

LMD Engineers Report FY 2022-23 (2).pdf

Park Engineers Report FY 2022-23 (2).pdf

Streetlight Engineers Report FY 2022-23 (2).pdf

14.3 Public Hearing and Review of Proposed Resolution Nos CC 2022-061, CC 2022- 062 and CC 2022-063 for adoption regarding establishment of a community facilities district and related special taxes, appropriation limit, and annexation; introduce ordinance levying special taxes in Community Facilities District 2022-1. (Staff Reference: Director of Public Works Heffernan)

RESOLUTION NO. CC 2022-061, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE OF FORMATION OF THE CITY OF PALMDALE COMMUNITY FACILITIES DISTRICT NO. 2022-1 (CITYWIDE MAINTENANCE

AND SERVICES), AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN THE City Council
Wednesday, July 13, 2022

DISTRICT, PRELIMINARILY ESTABLISHING AN APPROPRIATIONS LIMIT

FOR THE DISTRICT AND PROVIDING FOR THE FUTURE ANNEXATION OF PROPERTY TO THE DISTRICT;

RESOLUTION NO. CC 2022-062, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE CALLING SPECIAL ELECTION WITHIN
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (CITYWIDE MAINTENANCE AND SERVICES); AND

RESOLUTION NO. CC 2022-063 A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE DECLARING RESULTS OF SPECIAL ELECTION

AND DIRECTING THE RECORDING OF NOTICE OF SPECIAL TAX LIEN - COMMUNITY FACILITIES DISTRICT NO. 2022-1 (CITYWIDE MAINTENANCE

AND SERVICES)

CFD_2022-1_Public_Hearing_Staff_Report_Distro(1).doc

CFD Report Final_Signed.pdf

Reso 2022-061 Formation.docx

Reso 2022-062 CallSpecElection.docx

Reso 2022-063 DeclarResults.docx

Ordinance_No_1588_LevyingSpTx (1).docx

NoticeSpecTaxLien v2 w map info.docx

14.4 Public Hearing and Review of Proposed Resolution No. CC 2022-043 for adoption. (Staff Reference: Director of Public Works Heffernan)

RESOLUTION NO. CC 2022-043, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE UPDATING THE SEWER COLLECTION SERVICE

CHARGE AND ORDERING THE CONTINUATION OF THE CHARGE FOR THE

OPERATION AND MAINTENANCE OF THE PALMDALE SEWER COLLECTION SYSTEM FOR FISCAL YEAR 2022/2023

Sewer - SR 7-13-22_final.docx

Resolution No. CC 2022-043 7-13-2022_final.doc

Sewer Collection Service Charge Report FY 2022-23_v1.pdf

14.5 Public Hearing and Review of Proposed Resolution No. CC 2022-077. (Staff Reference: Director of Public Works Heffernan)

RESOLUTION NO. CC 2022-077, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE ORDERING THE VACATION OF A SEGMENT OF 6TH STREET EAST (100 FEET SOUTH OF SIERRA HIGHWAY TO 220 FEET NORTH OF AVENUE P-14) AND THE RESERVATION OF THE EXISTING

UTILITY EASEMENTS THEREIN

City Council
Wednesday, July 13, 2022

SR Resolution CC 2022-077.doc

Resolution_CC_2022-077_Order_to_Vacate.doc

Exhibit A (-912, -913).pdf

Exhibit B (-904).pdf

Exhibit C (-905).pdf

Exhibit D (-908).pdf

14.6 Public Hearing and Review of Proposed Ordinance No. 1589 for adoption. (Staff Reference: Director of Economic and Community Development Garibay - Presented by Associate Planner Alvarado)

ORDINANCE NO. 1589, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALMDALE APPROVING SPECIFIC PLAN AMENDMENT 21-001; A

REQUEST TO MODIFY LAND USE DESIGNATIONS, PERMITTED USES, AND

STANDARDS OF DEVELOPMENT FOR THE RANCHO VISTA SPECIFIC PLAN

SPA 21-001_CC SR.docx

SPA 21-001_CC Ordinance No. 1589.doc

Exhibit III.pdf

Exhibit IV.pdf

14.7 Public Hearing and Review of Proposed Ordinance No. 1592 for adoption. (Staff Reference: Director of Economic and Community Development Garibay)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALMDALE APPROVING ORDINANCE NO. 1592 FLAVORED TOBACCO BAN, AMENDING SECTION 5.04.670 (TOBACCO/SMOKING PRODUCT RETAILER) OF
CHAPTER 5.04 (BUSINESS REGULATION) OF TITLE 5 (BUSINESS

LICENSES, TAXES, AND REGULATION) OF THE PALMDALE MUNICIPAL

CODE BANNING FLAVORED TOBACCO PRODUCTS

Memo to City Council to continue agenda item.pdf

14.8 Public Hearing and Review of Proposed Resolution No. CC 2022-064 regarding energy rates and rate setting parameters. (Staff Reference: Director of Finance Samson - Presented by Energy Resource Manager Salt)

RESOLUTION NO. CC 2022-064, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF PALMDALE, APPROVING THE INITIAL RATES AND RATE

SETTING PARAMETERS FOR ENERGY FOR PALMDALE'S INDEPENDENT

CHOICE COMMUNITY CHOICE AGGREGATION PROGRAM

20220713_Palmdale_Staff_Report_Final_EPIC_Initial_rate.docx

2._20220615_Palmdale_Resolution_CC2022-
064__EPIC_initial_rate_setting(2).docx

1. 20220713_EPIC Proposed 2022 Rate Schedule_for Council Approval.pdf

City Council
Wednesday, July 13, 2022

14.9 Public Hearing and Review of Proposed Resolution No. CC 2022-065 for adoption, regarding an updated city wide fee schedule. (Staff Reference: Director of Finance Samson)

Adopt Resolution No. CC 2022-065, A Resolution of the City Council of the City of Palmdale restating in its entirety the Palmdale Master Schedule of Fees and repealing Resolution No.CC 2021-057

1. FY 2022-23 Staff Report Citywide Fee Resolution_Final JS.docx

2._FY_2022-23_Reso_CC_2022-065_Citywide_Fee_Resolution_Final_1_.doc

3. Palmdale Fee Schedule_Proposed 07.13.22.pdf

14.10 Public Hearing and Review of Proposed Urgency Ordinance U-1590 for adoption. (Staff Reference: Acting City Attorney Porter)

Adopt Urgency Ordinance No. U-1590, An Ordinance of the City Council of the City of Palmdale Amending Chapter 2.46 Regarding Planning Commissioner Appointments

SR_-_Ord_re_PC_appointments_07132022.docx

ORD-PC_appointment_-_July_13_2022.docx

15. APPOINTMENTS

15.1 Removal and Appointment and/or Reappointment of Planning Commissioners. (Staff Reference: Acting City Attorney Porter)

SR_-_Making_PC_Appointments 07132022.docx

15.2 Approve Appointment to the Palmdale Aerospace Academy. (Staff Reference:

City Clerk Smith)

7 13 2022 TPAA Appointment_SR_final.docx

Board of Directors Duties.pdf

TPAA Bylaws 6.16.16.pdf

16. NEW BUSINESS

16.1 Award Measure AV Grant Program Funding, totaling $1,306,810, to grantees in Exhibit A and authorize Interim City Manager to enter into agreements ranging from $2,000 to $250,000. (Staff Reference: Interim City Manager Perez, Deputy Director of Parks and Recreation Dombrowski and Management Analyst Kelley)

Staff_Report-Award_Measure_AV_Grant_Funding_07132022_FINAL.docx

Final Awardee List 2022 - Exhibit A.pdf

Measure AV Final Report PPT 07132022.pptx

City Council
Wednesday, July 13, 2022

17. INFORMATIONAL REPORT FROM MAYOR AND / OR COUNCILMEMBERS ON

THEIR VARIOUS COMMITTEE MEMBERSHIPS AND MEETINGS ATTENDED AT

PUBLIC EXPENSE

17.1 COMMITTEE MEMBERSHIPS.

• ANTELOPE VALLEY AIR QUALITY MANAGEMENT DISTRICT
• ANTELOPE VALLEY TRANSIT AUTHORITY
• CALIFORNIA CONTRACT CITIES ASSOCIATION
• CITY OF PALMDALE AUDIT COMMITTEE
• CITY OF PALMDALE INVESTMENT OVERSIGHT COMMITTEE
• HIGH DESERT CORRIDOR JOINT POWERS AUTHORITY
• LEAGUE OF CALIFORNIA CITIES
• LOS ANGELES COUNTY SANITATION DISTRICT
• NORTH LOS ANGELES COUNTY TRANSPORTATION COALITION
• PALMDALE RECYCLED WATER AUTHORITY
• SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS REGIONAL

COUNCIL
• UNITED STATES/MEXICO SISTER CITIES ASSOCIATION
• CALIFORNIA STATE PRISON – LOS ANGELES COUNTY, CITIZENS

ADVISORY COMMITTEE

17.2 MEETINGS ATTENDED AT PUBLIC EXPENSE

Bettencourt Informational Report 071322.docx

18. CITY MANAGER’S REPORT

19. CITY COUNCIL REQUESTS FOR NEW AGENDA ITEMS

20. Adjourn
meeting to July 20, 2022 at 7:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

City Council
Wednesday, July 13, 2022
Housing Authority
Staff Report
DATE: JULY 13, 2022
TO: HONORABLE CHAIR AND COMMISSIONERS
FROM: NEIGHBORHOOD SERVICES

HOUSING DIVISION
DISTRICT: 1
SUBJECT: ADOPT RESOLUTION NO. HA 202 2-002 A RESOLUTION OF THE

HOUSING AUTHORITY OF THE CITY OF PALMDALE APPROVING
AFFORDABLE HOUSING AGREEMENT NO. A-7950 WITH SOS
CHILDREN’S VILLAGES CALIFORNIA AND HOUSING AUTHORITY
DEVELOPMENT LOAN OF $1,200,000 FOR ACQUISITION AND PRE- DEVELOPMENT LOCATED AT 30TH STREET EAST AND ADJACENT
TO MCADAM PARK (APN 3018-026-001)
ISSUE
Adopt Resolution No. HA 202 2-002, a resolution of the Housing Authority of the City of Palmdale approving Affordable Housing Agreement No. A-7950 with SOS Children’s Villages California and acquisition and pre -development loan of $ 1,200,000 for the development located at 30th Street East and adjacent to McAdam Park (APN 3018-026- 001)

RECOMMENDATION
Staff recommends that the Housing Authority:

1. Adopt Resolution No. HA 2022-002 approving Affordable Housing Agreement No.

A-7950 with SOS Children’s Villages California and Authority Acquisition and Pre- Development Loan of $1,200,000; and

2. Authorize the Executive Director or their designee to execute the Affordable Housing Agreement with SOS Children’s Villages California, execute all necessary documents, and take all necessary actions to implement the approved actions.

BACKGROUND
SOS Children’s Villages California (Developer) approached the Housing Authority proposing to develop 12 units of three-bedroom townhomes each with an adjacent resource caregiver unit, for use as transitional housing for foster care youth , plus 2 additional transitional housing residential units to support the overall program on -site Report to Chair and Commissioners of the Housing Authority Re: Resolution No. HA 2022-002 and Affordable Housing Agreement No. A-7950 July 13, 2022

(Project). The Project is located at 30th Street East and adjacent to McAdam Park, APN 3018-026-001. SOS Villages began in Europe in 1945 housing children orphaned or abandoned during World War II. SOS Children’s Villages operates four sites in Illinois.

The SOS Children’s Villages townhome will house up to six children in foster care, allowing children from large families to live with their siblings, receive care and support from a full-time professionally trained foster parent, have case managers and support staff on-site in offices located in the community center.

DISCUSSION
The Project consists of twelve three bedroom townhome units each with an adjacent resource caregiver unit, two (2) additional units to be used as transitional housing to support the overall project, a community building with staff offices and meeting space, lighted play courts, and a play area. The proposed project has an estimated development budget of $19,001,000 to be funded as follows: Housing Authority Loan of $1,200,000, for a portion of acquisition and pre-development costs, a $500,000 loan from the Los Angeles County Development Authority with a 55 year term for a portion of acquisition costs, and private financing of $17,301,000. Repayment of the Authority loan will be at the end of a 55-year term.

Housing Authority loan assistance is in accordance with the Housing Authority’s goal to produce quality affordable housing for Low-, Very Low-, and Extremely-Low Income residents.

FISCAL IMPACT
For the $1,200,000 Authority Loan and $10,000 for incidental costs, carryforward funds are available to transfer to account 29364005-782950 from accounts 29364005-782902 Focus Neighborhood 1-4 $825,000 and $385,000 from account 29364005-782921 Transit Village Development.

STRATEGIC PLAN
Goal III Invest in infrastructure to improve community livability and to plan and maintain safe and attractive neighborhoods, streets and facilities.

Prepared by: Sophia Reyes, Housing Manager
Certified as to availability of Funds: Janelle Samson, Director of Finance Approved by: Ronda Perez, Interim Executive Director
Approved as to form: Scott Porter, Acting Authority Attorney

ATTACHMENTS

1. Resolution No. HA 2022-002

2. Affordable Housing Agreement No. A-7950 with SOS Children’s Villages California

HOUSING AUTHORITY

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. HA 2022 - 002

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE APPROVING AFFORDABLE HOUSING AGREEMENT (A-
7950) WITH SOS CHILDREN’S VILLAGES CALIFONIA AND
ACQUISITION AND PRE-DEVELOPMENT LOAN OF $1,200,000 FOR
DEVELOPMENT LOCATED AT 30 TH STREET EAST AND ADJACENT
TO MCADAM PARK (APN 3018-026-001)
WHEREAS, the City Council of the City of Palmdale (“City Council”) adopted the Redevelopment Plans for the Merged Redevelopment Projects (“Project Area”) on March 24, 1994, by Ordinance Nos. 1042, 1043, and 1044, which resulted in the allocation of property taxes from the Project Area to the former Community Redevelopment Agency of the City of Palmdale (“Redevelopment Agency”) for purposes of redevelopment. On May 4, 2011 the City Council adopted the Expansion Area Amendment by Ordinance No. 1418 adding additional territory to the Merged Project Area, and amending and restating the Redevelopment Plans into a single Amended and Restated Redevelopment Plan for the Merged Project Area (“Redevelopment Plan”). Project Area No. 2, Project Area No. 3, Project Area No. 4, and the Expansion Area collectively are referred to as the “Merged Project Area”.

WHEREAS, the Housing Authority of the City of Palmdale (“Authority”) is implementing certain proposed uses in the Merged Project Area including low-income housing, which will aid in carrying out the Redevelopment Plan, pursuant to its obligations under Assembly Bill No. 26 (2011-2012 1 st Ex. Sess.), as amended by Assembly Bill No. 1484 (2011-2012 Regular Session) and as further amended from time to time (collectively, the “Dissolution Bills”) wherein the Authority, as the designated entity, will perform the housing functions previously performed by the former Redevelopment Agency to carry out the purposes of the Redevelopment Plan and the Dissolution Bills.

NOW THEREFORE, BE IT RESOLVED, THE HOUSING AUTHORITY OF THE CITY

OF PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

SECTION 1. In accordance with its obligations under the Dissolution Bills, the Authority wishes to enter into a proposed Affordable Housing Agreement (“Housing Agreement”) with SOS Children’s Villages California (the “Developer”), wherein the Authority will provide an Authority loan of $1,200,000 in Low and Moderate Income Housing Asset Funds to Developer for a portion of the acquisition and pre- development of the property located at 30 th Street East and adjacent to McAdam Park (APN 3018-026-001) (“Property”) which is proposed to consist of rental housing consisting of twelve (12) three-bedroom townhome units for foster care youth each with an adjacent resource caregiver unit,, two (2) additional units to be used as Resolution No. HA 2022 - 002

transitional housing to support the overall project, a community building with staff offices and meeting space, lighted courts, and a play area. Eleven (11) units will be made available to and occupied by Extremely Low-Income households, one (1) unit will be made available to and occupied by a Low-Income household, and two (2) units will be made available to and occupied by a Very Low-Income households.

SECTION 2 . The Housing Agreement requires the recording of covenants against the Developer’s interest in the Property restricting the use of the Property for a term of not less than 55 years.

SECTION 3. The agreement is exempt from the requirements of the California Environmental Quality Act (CEQA) and the City’s CEQA Guidelines. The project qualifies under the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Pursuant to CEQA Guidelines Section 15061(B)(3), where it can be seen with certainty that there is no possibility that the activity in question may have significant effect on the environment, the activity is not subject to CEQA. The proposed Housing Agreement does not propose any physical change to the environment itself. The development applications associated with this agreement will be reviewed for CEQA compliance under a separate entitlement and the appropriate environmental document will be prepared to address project specific impacts. Therefore, the proposed Housing Agreement will not have a significant effect on the environment.

SECTION 4. The Authority hereby approves the proposed Housing Agreement in substantially the form presented at this meeting, with such minor changes as may be approved by the Executive Director with approval as to form by Authority Legal Counsel.

SECTION 5. The Authority hereby authorizes its Executive Director, or designee, to execute the Housing Agreement, execute all documents, and take all actions necessary and convenient to carry out and implement the Housing Agreement, and administer the Authority’s obligations, responsibilities and duties to be performed thereunder.

Resolution No. HA 2022 - 002

SECTION 6. The Authority Secretary shall certify to the adoption of this resolution.

PASSED, APPROVED and ADOPTED this 13th day of July, 2022. _________________________________
Approved as to form: Steven D. Hofbauer, Chair
ATTEST:
___________________________ _________________________________ Scott E. Porter Shanae S. Smith,
Acting Authority Attorney Authority Secretary
I, Shanae S. Smith, Authority Secretary of the Housing Authority of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the Housing Authority of the City of Palmdale at a special meeting of said Authority held on the 13th day of July, 2022 by the following roll call vote:

AYES:

NOES:___________________________________________________________ ABSTAIN:______________________ABSENT:___________________________ Date:

Shanae S. Smith, Authority Secretary

80501-00001/4406298.5

AFFORDABLE HOUSING AGREEMENT

BY AND BETWEEN

HOUSING AUTHORITY

OF THE CITY OF PALMDALE

AND

SOS CHILDREN’S VILLAGES CALIFORNIA, INC.

(A-7950)

July 13, 2022

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APN: 3018-026-001

80501-00001/4406298.5

TABLE OF CONTENTS

Page

Article I SUBJECT OF AGREEMENT ......................................................................................... 2 Section 101 Additional Definitions .................................................................................. 2 Section 102 Purpose of Agreement .................................................................................. 7 Section 103 Authority ...................................................................................................... 7 Section 104 Developer ..................................................................................................... 8 Section 105 Prohibition Against Transfers ...................................................................... 8 Article II INTENTIONALLY OMITTED ...................................................................................... 9 Article III DEVELOPMENT OF PROPERTY .............................................................................. 9 Section 301 Scope of Work .............................................................................................. 9 Section 302 Land Use Approvals ................................................................................... 10 Section 303 Construction Drawings and Related Documents ....................................... 11 Section 304 Project Costs ............................................................................................... 11 Section 305 Authority Loan ........................................................................................... 11 Section 306 Schedule of Performance ........................................................................... 11 Section 307 Local, State and Federal Laws ................................................................... 12 Section 308 Nondiscrimination During Construction .................................................... 13 Section 309 Indemnification and Insurance ................................................................... 13 Section 310 Disclaimer of Responsibility by Authority ................................................ 17 Section 311 Rights of Access ......................................................................................... 17 Section 312 Taxes, Assessments, Encumbrances and Liens .......................................... 17 Section 313 Rights to Plans ............................................................................................ 17 Section 314 Release of Construction Covenants............................................................ 18 Article IV USE OF PROPERTY .................................................................................................. 19 Section 401 Uses ............................................................................................................ 19 Section 402 Maintenance of Property ............................................................................ 20 Section 403 Obligation to Refrain from Discrimination ................................................ 22 Section 404 Effect and Duration of Covenants .............................................................. 23 Section 405 Effect of Violation of Terms and Provisions of Agreement ...................... 24 Article V DEFAULTS, REMEDIES AND TERMINATION ...................................................... 24 Section 501 Defaults – General ...................................................................................... 24 Section 502 Institution of Legal Actions........................................................................ 25 Section 503 Applicable Law .......................................................................................... 25 Section 504 Acceptance of Service of Process .............................................................. 25 Section 505 Rights and Remedies Cumulative .............................................................. 25 Section 506 Damages ..................................................................................................... 26 Section 507 Specific Performance ................................................................................. 26 Section 508 Termination by Authority Before Closing ................................................. 26 Section 509 Termination by Authority After Closing .................................................... 27 Affordable Housing Agreement Agreement No. A-7950
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Section 510 Termination by Either Party ....................................................................... 27 Section 511 Limited Recourse Obligations .................................................................... 28 Article VI GENERAL PROVISIONS .......................................................................................... 29 Section 601 Notices, Demands and Communications between Parties ......................... 29 Section 602 Conflicts of Interest .................................................................................... 29 Section 603 Nonliability of Authority Officials and Employees ................................... 29 Section 604 Force Majeure ............................................................................................ 29 Section 605 Inspection of Books and Records ............................................................... 30 Section 606 Real Estate Commissions ........................................................................... 30 Section 607 Approvals ................................................................................................... 30 Section 608 No Partnership ............................................................................................ 30 Section 609 Compliance With Law ............................................................................... 31 Section 610 Incorporation by Reference ........................................................................ 31 Section 611 Interpretation .............................................................................................. 31 Section 612 No Third Party Beneficiaries...................................................................... 32 Section 613 Authority to Sign ........................................................................................ 32 Section 614 Time of Essence ......................................................................................... 32 Article VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS ................................. 32 Article VIII TIME FOR ACCEPTANCE OF AGREEMENT BY authority; DATE OF AGREEMENT ...................................................................................................... 33

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ATTACHMENTS

ATTACHMENT NO. 1 LEGAL DESCRIPTION
ATTACHMENT NO. 2 SITE MAP
ATTACHMENT NO. 3 FORM OF AGREEMENT CONTAINING COVENANTS ATTACHMENT NO. 4 FORM OF ASSIGNMENT OF AGREEMENTS
ATTACHMENT NO. 5 [INTENTIONALLY OMITTED]
ATTACHMENT NO. 6 FORM OF AUTHORITY DEED OF TRUST
ATTACHMENT NO. 7 FORM OF AUTHORITY NOTE
ATTACHMENT NO. 8 FORM OF ENVIRONMENTAL INDEMNITY
ATTACHMENT NO. 9 FORM OF NOTICE OF AFFORDABILITY

RESTRICTIONS
ATTACHMENT NO. 10 SCHEDULE OF PERFORMANCE
ATTACHMENT NO. 11 METHOD OF FINANCING
ATTACHMENT NO. 12 PROJECT BUDGET

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AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN HOUSING

AUTHORITY OF THE CITY OF PALMDALE AND
SOS CHILDREN’S VILLAGES CALIFORNIA, INC.
(A-7950)

This AFFORDABLE HOUSING AGREEMENT (this “Agreement”) is entered into as of July 13, 2022, by and between the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body c orporate and politi c (“Authority”), and SOS CHILDREN’ S VILLAGES CALIFORNIA, INC., a nonprofit public benefit corporation (“Developer”). Authority and Developer (individually, a “Party” and collectively, the “Parties”) hereby agree as follows:

RECITALS

A. Developer is a party to that certain Standard Offer, Agreement and Escrow Instructions for Purchase of Real Property dated February 9, 2022, as amended, pursuant to which Developer will acquire fee title to that certain unimproved real property located at 30th Street East and adjacent to McAdam Park in the City of Palmdale, California, legally described as set forth in Attachment No. 1 and illustrated on the site map attached to this Agreement as Attachment No. 2 (the “Property”).

B. Developer has approached the Authority proposing to develop on the Property twelve (12) three-bedroom residential units for use as affordable housing for foster care youth, each with an adjacent unit for use by the resource caregiver, two (2) units of transitional housing used to support the overall foster care program on the Property, a community center to be used for the foster youth and the community, related offices, and ancillary required parking and ot her improvements (collectively, the “Project”).

C. Developer proposes to finance the Project with a loan from Authority of Low and Moderate Income Housing Asset Funds and donations to Developer , or alternative financing proposed by Developer and approved by the Authority.

D. Developer’s acquisition and use of the Property pursuant to this Agreement, and the fulfillment generally of this Agreement are in the vital and best interests of the City of Palmdale and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements.

Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

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ARTICLE I SUBJECT OF AGREEMENT

Section 101 Additional Definitions

For purposes of this Agreement, the following capitalized terms have the following meanings:

“Affiliate” means (i) any Person directly or indirectly controlling, controlled by or under common control with another Person, (ii ) any Person owning or controlling 10% or more of the outstanding voting securities of such other Person or (iii) if that other Person is an officer, director, member or partner, then any company for which such Person acts in any such capacity. The term “control” as used in the immediately preceding sentence means the power to direct the management or the power to control election of the board of directors. It shall be a presumption that control with respect to a corporation or limited liability company is the right to exerc ise or control, directly or indirectl y, more than 50% of the voting rights attributable to the controlled corporation or limited liability company, and, with respect to any individual, partnership, trust, other entity or association, control is the possess ion, indirectly or directly, of the power to direct or cause the direction of the management or policies of the controlled entity.

“Affordable Rent” has the meaning set forth in California Health and Safety Code Section 50053. The Parties have agreed that rents for the units shall not exceed the respective amounts set forth in the Agreement Containing Covenants.

“Agreement Containing Covenants” means the Agreement Containing Covenants which sets forth the affordable housing requirements for the Project , substantially in the form attached hereto as Attachment No. 3.

“Assignment of Agreements” means the assignment by Developer to Authority of plans, contracts and permits, in the form of Attachment No. 4 to this Agreement.

“Authority Acquisition Loan ” means the portion of Authority Loan to be used for a portion of the acquisition costs for the Project in such amount as determined by the Executive Director, evidenced by the Authority Note and secured by the Authority Deed of Trust.

“Authority Deed of Trust” means the deed of trust in which Developer is the trustor and Authority is the beneficiary, securing the Authority Loan, substantially in the form of Attachment No. 6 to this Agreement.

“Authority Loan” means, individually and collectively, the Authori ty Acquisition Loan and the Authority Pre-Development Loan.

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“Authority Loan Documents” means this Agreement, the Authority Note , the Authority Deed of Trust, the Assignment of Agreements , the Agreement Containing Covenants, the Notice of Affordability Restrictions, the Environmental Indemnity, and the UCC1 Financing Statement.

“Authority Note” means the promissory note evidencing the Authority Loan, substantially in the form of Attachment No. 7 to this Agreement.

“Authority Pre-Development Loan” means the portion of Authority Loan to be used for a portion of the pre -development costs for the Project in such amount as determined by the Executive Director, evidenced by the Authority Note and secured by the Authority Deed of Trust.

“City” means the City of Palmdale, California, a municipal corporation, and any assignee of or successor to its rights, powers and responsibilities.

“Closing” means the point in time when all conditions precedent to the funding of the Authority Loan have been satisfied, in accordance with the Method of Financing.

“Completion” means the point in time at which all of the following have been satisfied :
(i) issuance of a certificate of occupancy for the Project by City, ( ii) recordation of a notice of completion pursuant to California Civil Code S ection 3093, (iii ) submission to Authority of unconditional lien releases or waivers obtained by Developer or Developer’s agent for the Project, (iv) certification by the Project architect that the Project (with the exception of minor “punch list” items) has been completed in a good and workmanlike manner and in substantial compliance with the City-approved plans and specifications, (v) disposition of any mechanic’s liens that have been recorded or stop notices that have been delivered to Authority , so that any such liens shall have been paid, settled, bonded, or insured around or otherwise extinguished or discharged and Authority has been provided satisfactory evidence of such paym ent, settlement, bond, title insurance or title insurance commitment or discharge, including without l imitation all statutory waivers and (vi) the time for Developer’s contractor, suppliers and subcontractors to file a claim pursuant to California Civil Code Sections 3115-3117 has expired.

“Conditions” means, with respect to the Property and any Improvements located thereon, the condition of the soil, geology, the presence of known or unknown faults or defects, or Hazardous Substances, the suitability of the Property for its intended uses or the condition of any related public improvements.

“Environmental Indemnity ” means the indemnity by Developer in the form of the Environmental Indemnity attached to this Agreement as Attachment No. 8.

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“Extremely Low Income” means household income that does not exceed the maximum income set forth in California Health and Safety Code Section 50106.

“Force Majeure” or “Force Majeure Event” means the following events, provided that they actually delay and interfere with the timely performance of the matter to which it would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the P arty claiming such interference: war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, acts of terrorism, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation (including litigation challenging the validity of this transaction or any element thereof), unusually severe weather , inability to secure necessary labor, materials or tools, delays of any contractor, subcontractor, or suppliers , acts of the other P arty, acts or failure to act of any Governmental Authority (except acts or failure to act of Authority shall not excuse performance by Authority ), the imposition of any applicable morator ium by a Governmental Authority or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the P arty claiming such delay and interference.

Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until the P arty claiming such delay and interference delivers to the other P arty written notice describing the event, its cause, when and how such P arty obtained knowledge, the date the event commenced, and the esti mated delay resulting therefrom , and provided further i n no event shall a Force Majeure Event include the financial inability of a p arty to this Agreement to pay or perf orm any of its obligations hereunder. Any Party claiming a Force Majeure Delay shall deliver such written notice within 10 days after it obtains actual knowledge of the event.

“Force Majeure Delay” means a delay in taking any action required by this Agreement, proximately caused by the occurrence of a Force Majeure Event.

“Governmental Authority” means the United States, the State of California, the County of Los Angeles, City or any other political subdivision in which the Property is located, and any court or political subdivision, authority or instrumentality having jurisdiction over the Property.

“Hazardous Substances” has the meaning set forth in the Environmental Indemnity.

“Improvements” means improvements located on the Property.

“LACDA” means the Los Angeles County Development Authority, a public body, corporate and politic.

“LACDA Deed of Trust ” means the deed of trust i n which Developer is the trustor and LACDA is the beneficiary, securing the LACDA Loan.

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“LACDA Loan” means the loan by LACDA as lender to Developer , as borrower, in the amount of Five Hundred Thousand Dollars ($500,000).

“LACDA Note” means the promissory note evidencing the LACDA Loan.

“LACDA Subordination Agreement ” means the agreement by LACDA subordinating the LACDA Deed of Trust to the Authority Deed of Trust.

“Low Income ” means the maximum income given to “lower income” households in California Health and Safety Code Section 50079.5.

“Method of Financing ” means the method of f inancing attached to this Agreement as Attachment No. 11, as may be amended from time to time.

“Notice of Affordability Restrictions” means the Notice of Affordability Restrictions on Transfer of Real Property, substantially in the form attached to this Agreement as Attachment No.

9. “Permitted Transfer” means any of the following:

a. The granting of easements or permits to facilitate the development of the Property in accordance with this Agreement;

b. Any transfer approved in writing by the Authority Executive Director or designee, at his or her sole discretion;

c. Any transfer to an Affiliate of Developer; and/or

d. The encumbrance of the Property by the LACDA Deed of Trust, the recordation of which is hereby approved by the Authority pursuant to this Agreement, provided that the LACDA Subordination Agreement is delivered to Authority concurrently.

“Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign.

“Plans” means the plans and drawings prepared on behalf of Developer and approved by the City in its municipal capacity for development and construction of the Project in accordance with this Agreement.

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“Project Budget ” means the applicable schedule of Project C osts attached to th is Agreement as Attachment No. 12.

“Project Costs” means all third party costs, fees, and expenses which are actually incurred by Developer for the acquisition of the Property and the development and construction of the Project on the Property, approved by the Authority Executive Director.

“Restricted Period” means 55 years following the Closing.

“Schedule of Performance” means the s chedule of performance attached to this Agreement as Attachment No. 10.

“Title Company ” means Chicago Title Insurance Company or another title insurance company mutually acceptable to the Parties.

“Title Insurance Policies ” means and includes the following ALTA extended coverage policies of title insurance issued by the Title Company:

a. An owner’s policy of title insurance in favor of Developer , together with such endorsements as Developer may reasonably require, insuring Developer’s fee title, in the amount of 100% of the purchase price for the Property; and

b. A lender’s policy of title insurance in favor of Authority, together wi th such endorsements as Authority may reasonably require, insuring the lien of the Authority Deed of Trust in the amount of the Authority Loan.

“Transfer” means:

a. The sale, agreement to sell, transfer, assignment, or conveyance of the Property, the Project, or any portion thereof or interest therein (including, without limitation, a beneficial interest), whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project.

b. “Transfer” also includes the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Developer, or any conversion of Developer to an entity form other than that of Developer at the time of execution of this Agreement.

c. Notwithstanding paragraphs a. and b., “Transfer” shall not include Permitted Transfers.

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“UCC1” means a UCC 1 Financing Agreement in a form suitable for filing with the California Secretary of State.
“Very Low Income” means household income that does not exceed the maximum income set forth in California Health and Safety Code Section 50105.

Section 102 Purpose of Agreement

The purpose of this Agreement is to assist with financing a portion of the acquisition of the currently unimproved Property and of the pre-development costs of the Project on the Property .

The use of the Property pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of the City of Palmdale and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. Pursuant to and conditioned upon the terms of this Agreement, Authority shall make a loan to Developer to pay a portion of the cost of acquiring the Property and pre-development costs for the Project, and Developer shall acquire the Property and develop and construct and operate the Project on the Property.

Section 103 Authority

a. Authority is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under the Housing Authorities Law of the State of California.

b. The principal office of Authority for purposes of receiving notices pursuant to this Agreement is as follows:

Housing Authority of the City of Palmdale
Attn: Executive Director
38250 Sierra Highway
Palmdale, California 93550-3609
Facsimile number: 661-267-5155

With a copy to:

City of Palmdale
Attn: Authority Counsel
38250 Sierra Highway
Palmdale, California 93550-3609

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c. “Authority” as used in this Agreement includes the Housing Authority of the City of Palmdale and any assignee of or successor to its rights, powers and responsibilities.

Section 104 Developer

a. Developer is SOS CHILDREN’S VILLAGES CALIFORNIA, INC. , a nonprofit public benefit corporation.

b. The address of Developer for purposes of receiving notices pursuant t o this Agreement is as follows:

SOS CHILDREN’S VILLAGES CALIFORNIA, INC.
8484 Wilshire Boulevard, Suite 500
Beverly Hills, CA 90211-2404
Attn: Anna Levin, CPA
Facsimile number: (310) 659-3500

c. Whenever the term “Developer” is used herein, such term shall mean and include:
(i) Developer as of the date hereof and (ii) any assignee of or successor to its rights, powers and responsibilities approved by Authority.

Section 105 Prohibition Against Transfers

a. The qualifications and identity of Developer are of particular concern to Authority.

It is because of those qualifications and identity that Authority has entered into this Agreement with Developer. No voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein.

b. Developer shall not Transfer or attempt to Transfer all or any part of the Property, the Project, and/or this Agreement, other than pursuant to a Permitted Transfer , without the prior written approval of Authority in the Authority’s sole and absolute discretion. Any such change (or assignment of this Agreement in connection therewith) shall be by instruments satisfactory to the Authority Executive Director or designee, and be subject to the approval by the Authority Executive Director or designee of evidence of the proposed assignee’s or transferee’s financial wherewithal, reputation, and qualifications to meet the obligation s of Developer under this Agreement.

c. For the reasons cited above, Developer represents and agrees for itself and any successor in interest that, there shall be no cumulative change in ownership or control of greater than 49%, by any method or means, without Authority’s prior written approval.

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d. Developer shall promptly notify Authority of any and all changes whatsoever in the identity of the parties in control of Developer or the degree thereof, other than any of its officers or directors, of which it or a ny of its officers have been notified or otherwise have knowledge or information.

e. This Agreement may be terminated by Authority , and Authority may exercise its remedies pursuant to the Authority Loan Documents , if there is a Transfer in violation of this Agreement.

f. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions.

g. Any Transfer shall be by instrument in writing satisfactory to Authority and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of Authority shall expressly assume all of the obligations of Developer under this Agreement and agree to be subject to all conditions and restri ctions applicable to Developer in this Agreement.

There shall be submitted to Authority for review all instruments and other legal documents proposed to affect any such transfer, and if approved by Authority , then its approval shall be indicated to Developer in writing.

h. In the absence of specific written agreement by Authority, no Transfer, or approval thereof by Authority, shall be deemed to relieve Developer or any other party from any obligations under this Agreement.

ARTICLE II INTENTIONALLY OMITTED

ARTICLE III DEVELOPMENT OF PROPERTY

Section 301 Scope of Work

The Property shall be developed in accordance with and within the limitations established in this Agreement, Plans approved by Authority pursuant to this Agreement , and permits issued by City.

No person acting on behalf of Authority is authorized to make, and by execution of this Agreement, Developer acknowledges that neither Authority nor any person acting on behalf of Authority has made , any representation, agreement, statement, warranty, guarantee or promise regarding the zoning, construction, physical condition or other status of the Property.

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Developer acknowle dges and agrees that Authority makes no representations and warranties, express or implied, as to the Property. Developer hereby expressly acknowledges and agrees that it is relying solely upon its inspections, examination, and evaluation of the Property in acquiring and developing the Property on an “as is”, “where is” and “with all faults” basis.

It shall be the sole responsibility of Developer, at Developer’s expense, to investigate and determine all Conditions of the Property and its suitability for the uses to which the Property is to be put in accordance with this Agreement. If the Conditions of the Property are not in all respects entirely suitable for the use or uses to which the Property will be put, then it is the responsibility and obligation of Developer, without cost to Authority, to take such action or cause such action to be taken, as may be necessary to place the Property in all respects in a condition entirely suitable for its use in accordance with this Agreement.

Developer agrees to perform, or cause to be performed, the clean -up of any Hazardous Substances on, in, under or within the Property, without cost or expense to Authority. Developer shall defend, indemnify , and hold harmless Authority and its officers, agents, employees, contractors and attorneys from any claims, liability, injury, damages, costs and expenses (including, without limitation, the cost of any required cleanup of Hazardous Substances, and the cost of reasonable attorneys’ fees) which may be sustained as the result of Hazardous Substa nces relating to the Property. As a condition precedent to the Closing, Developer shall execute and deliver to Authority the Environmental Indemnity.

Section 302 Land Use Approvals

a. It is the responsibility of Developer, without cost to Authority, to ensure that zoning of the Property and all applicable City land use requirements shall be such as to permit development and construction of the Project and the use, operation and maintenance of the Project in accordance with the provisions of this Agreement.

b. Developer shall obtain all entitlements, approvals, variances and permits necessary for the development and construction of the Project.

c. Nothing contained herein shall be deemed to entitle Developer to any City permit or other City approval necessary for the development and construction of the Project, or waive any applicable City requirements relating thereto . This Agreement does not (i ) grant any land use entitlement to Developer, (ii) supersede, nullify or amend any condition which may be imposed by City in connection with approval of the work described herein, (iii) guarantee to Developer or any other party any profits from the Property or (iv) amend any City laws, codes or rules. This is not a development agreement as provided in California Government Code Section 65864.

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Section 303 Construction Drawings and Related Documents

Developer shall prepare and submit construction drawings and related documents for the development and construction of the Project to Authority for review (including, without limitation, architectural review) and written approval at the times established in the Schedule of Performance.

Any items so submitted and approved in writing by Authority shall not be subject to subsequent disapproval. Authority approval shall not be unreasonably withheld.

Section 304 Project Costs

a. Except for the Authority Loan and the LACDA Loan, the cost of acquiring the Property and developing and constructing the Project shall be the responsibility of Developer, as provided in the Method of Financing. The Project Costs are set forth in the Project Budget, which shall be subject to change from time-to-time as provided in the Method of Financing.

b. Developer has proposed, and Authority has approved, the Project Budget .

Developer acknowledges that Authority is relyin g on Developer’s experience and expertise in establishing the Project Costs , and Developer represents that the Project Budget is based on the best, good faith estimate of Developer of the costs that are likely to be incurred for the Project.

Section 305 Authority Loan

Subject to and conditioned on the terms and conditions of this Agreement, Authority shall provide Developer with financial assistance which consists of the Authority Acquisition Loan and the Authority Pre-Development Loan. The Authority Loan shall be repaid according to the terms and conditions of the Authority Note.

Section 306 Schedule of Performance

a. The Parties shall perform all acts respectively required of such P arty in this Agreement within the times provided in the Schedule of Performance . The Sched ule of Performance is subject to revision from time to time as mutually agreed upon in writing by Developer and the Authority Executive Director.

b. Within the time set forth therefor in the Schedule of Performance, Developer shall promptly begin and thereafter diligently prosecute to completion the development and construction of the Project as provided in this Agreement. Developer shall begin and complete all construction and development within the times specified in the Schedule of Performance, with such reasonable extensions of said times as may be granted by Authority.

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c. During periods of construction, Developer shall submit to Authority a written report of the progress of the construction when and as requested by Authority . The report shall be in such form and detail as may be reasonably required by Authority and shall include a reasonable number of construction photographs (if requested) taken since the last report by Developer.

Section 307 Local, State and Federal Laws

a. Developer hereby agrees to carry out development, construction (as defined by applicable law) and operation of the Project on the Property, including, without limitation, any and all public works (as defined by applicable law), in conformity with all appli cable local, state and federal laws, rules and regulations including, without limitation, all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). b. Developer hereby expressly acknowledges and agrees that neither the City nor the Authority has ever previously affirmatively represented to the Developer or its contractor(s) for the Project in writing or otherwise, in a call for bids or otherwise, that the work to be covered by the bid or contract is not a “public work,” as defined in Section 1720 of the Labor Code. Developer will have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer will have the obligation to provide or have maintained any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer will have the obligation, at the Developer’s sole cost, risk and expense, to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Developer will indemnify, protect, defend and hold harmless the Authority, the City and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to the Authority and the City, from and against any and all loss, liability, damage, claim, cost, expense, and/or “increased costs” (including labor costs, penalties, reasonable attorney fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Project , including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1) the noncompliance by Developer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (3) failure by Developer to provide any required disclosure, representation, statement, rebidding and/or identification which Affordable Housing Agreement Agreement No. A-7950
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may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (4) failure by Developer to provide or have maintained any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) w hich may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (5) failure by the Developer to obligate any party as may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the development, construction (as defined by applicable law) and operation of the Pr oject, including, without limitation, any public work (as defined by applicable law), Developer will bear all risks of payment or non payment of state prevailing wages and/or the implementation Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. “Increased costs” as used in this Section has the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity will survive termination of this Agreement and will continue after recordation of the Release of Construction Covenants. c. Developer shall be responsible for obtaining all permits and approvals required by City for development and construction of the Project, ensuring that the use of the Property for the purposes described in this Agreement complies with the zoning and other City land use regulations (including any applicable exemptions and/or exceptions) applicable to the Property.

Section 308 Nondiscrimination During Construction

Developer, for itself and its successors and assigns, agrees that during the development and construction of the Project, Developer shall not discriminate against any employee or applicant for employment on any basis prohibited by s tate or federal law, including without limitation, race, color, religion, sex or national origin.

Section 309 Indemnification and Insurance

a. Developer agrees to and shall , to the fullest extent permitted by law, defend, indemnify and hold Authority, City , and their r espective officers, employees, contractors and agents harmless from and against all claims, liabilities, damages, losses, expenses, attorneys’ fees and costs that is caused, in whole or in part by any of the following : (i ) any act or omission of Developer or its contractors, suppliers or vendors, of any contracting tier, in connection with its performance or nonperformance of this Agreement, (ii) the breach of any obligations of Developer hereunder, (iii ) any act or omission during the period commencing wi th execution of this Agreement by Authority and until Completion, of Developer or its contractors, suppliers or vendors, of any contracting tier, or anyone directly or indirectly employed by any of them, or anyone for Affordable Housing Agreement Agreement No. A-7950
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whose acts Developer may be liable or (iv) the use during the period commencing with execution of this Agreement by Authority and until Completion , of any products, material or equipment furnished by Develope r or its contractors, suppliers or vendors, of any contracting tier . Such obligation shall not be construed to negate, abridge or otherwise reduce other rights or obligations of indemnity which would otherwise exist as to a party or person described in this Section 309. The foregoing indemnification by Developer shall apply to the extent of the violation of a legal duty, including, without limitation, active or passive negligence, strict liab ility, breach of contract or intentional or willful misconduct, by Develope r or its contractors, suppliers or vendors, of any contracting tier, or anyone directly or indirectly employed by any of them, or anyone for whose acts Developer may be liable. Indemnitees shall be entitled to recovery of any attorneys’ fees incurred as a result of Developer’s failure to provide the defense and indemnity required by this Section 309.

This Section 309 shall survive the expiration or termination of this Agreement and will continue after recordation of the Release of Construction Covenants.

b. At the times indicated in paragraphs (i) through (iv) below, Developer shall furnish or cause to be furnished to Authority evidence of the following policies of insurance, naming Developer as insured and, except as to the insurance described in paragraph (iv), below, Authority and City as additional insureds. The insurance described in paragraph (ii) shall be obtained prior to the initial occupancy of the townhomes. All such insurance shall be kept in force for the term of the Authority Note.

(i) Fire Policies: Prior to commencement of construction, Developer shall furnish evidence of, and shall thereafter maintain or cause to be maintained a policy or policies of insurance against loss or damage to the Property or the Project and all property of an insurable nature located upon the Property, resulting from fire, lightning, vandalism, malicious mischief, riot and civil commotion, and such other perils ordinarily included in extended coverage fire insurance policies. Such insurance shall be maintained in an amount not less than 100% of the full insurable value of the Project, as defined herein in paragraph d.

(ii) Rental Income Insurance: At such time, if any, that any residential units within the Project are leased pursuant to a standard rental agreement, Developer shall furnish evidence of, and shall thereafter maintain or cause to be maintained use and occupancy or business interruption or rental income insurance against the perils of fire, lightning, vandalism, malicious mischief, riot and civil commotion, and such other perils ordinarily included in extended coverage fire insurance policies, in an amount that is acceptable to the parties.

(iii) Liability Insurance: Developer shall maintain public liability insur ance to protect against loss from liability imposed by law for damages on account of personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or about the Property, resulting directly or indirectly f rom any acts or activities of Developer, Affordable Housing Agreement Agreement No. A-7950
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or any person acting for Developer, or under its respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the P roperty, or in connection with Developer’s activities thereon, caused directly or indirectly by or from acts or activities of Developer, or any person acting for Developer, or under its control or direction. Such property damage and personal injury insurance shall also provide for and protect Authority against incurring any legal cost in defending claims for alleged loss. Such personal injury and property damage insurance shall be maintained in full force and effect during the term of this Agreement in the following amounts : Commercial General Liability on a per occurrence basis of not less than $2,000,000 and in a general aggregate amount of not less than $3,000,000, and Commercial Automobi le Liability of not less than $ 2,000,000 combined single limit, including owned, non-owned and hired automobile coverage. It is the mutual intent of the parties that the levels of insurance coverage described herein shall be and remain comparable to the level of insurance coverage that is customary with comparable oper ations in Los Angeles County. At any time and from time to time, Authority may provide notice to Developer that the level of or type insurance being maintained by Developer is no longer comparable to the level of insurance coverage that is customary with comparable operations in Los Angeles County, and request that the minimum limit or type of hereinabove designated insurance shall be changed accordingly. Developer agrees that provisions of this paragraph as to maintenance of insurance shall not be const rued as limiting in any way the extent to which Developer may be held responsible for the indemnification of Authority or the payment of damages to persons or property resulting from Developer’s activities, or the activities of any person or persons for which Developer is responsible.

(iv) Workers’ Compensation Insurance : Developer shall maintain workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers’ compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers’ compensation insurance shall cover all persons employed by Developer in connection with the Project and shall cover liability within statutory limits for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any person incurring or suffering injury or death in connection with the Project or the operation thereof by Developer , and in an amount of not less than $1,000,000 per accident, bodily injury, or disease. Notwithstanding the foregoing, Developer may, in compliance with the laws of the State of California and in lieu of maintaining such insurance, self-insure for workers’ compensation in which event Developer shall deliver to Authority evidence that such self - insurance has been approved by the appropriate State authorities.

c. Developer shall cause all contractors and subcontractors performing work relating to the Project to maintain insurance of the types and in the amount described in this Section 309.

Developer shall cause its architects (if any) and engineers also to maintain Architects and Affordable Housing Agreement Agreement No. A-7950
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Engineers Professional Liability (Errors and Omissions) insurance on a per occurrence basis of not less than $2,000,000 and in a general aggregate amount of not less than $3,000,000.

d. The term “full insurable value” as used in this Section 309 means the actual replacement cost (excluding the cost of excavation, foundation and footings below the lowest floor and without deduction for depreciation) of the Project on the Property immediately before such casualty or other loss, including the cost of construction, architectural and engineering fees, and inspection and supervision. To ascertain the amount of coverage required, Developer shall cause the full insurable value to be determined from time to time by appraisal by the insurer, by agreement between the parties or by an appraiser mutually acceptable to the parties, not less often than once every three years.

e. All policies shall name Authority and City as additional insureds and/or loss payees as their interests may appear . Policy endorsements providing the additional insured/loss payee shall be included with Certificates of Insurance.

f. All insurance provided under this section shall be for the benefit of Developer, Authority, and City. Developer agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insura nce. Developer agrees t o submit policies of all insurance required by this S ection, or certificates evidencing the existence thereof and additional insured endorsements, to Authority not less than 5 days prior to the Closing , indicating full coverage of the contractual liability imposed hereby. All insurance herein provided for shall be effected under policies issued by insurers of recognized responsibility, licensed and admitted to do business in the State of California (or if not admitted in California shall have a “General Policyholders Rating” of at least “A -” as set forth in the most current issue of “Best’s Key Rating Guide”), reasonably approved by Authority . All policies or certificates of insurance shall provide that such policies shall not be canceled or limited in any manner without at least 20 days’ prior written notice to Authority.

g. If Developer fails or refuses to procure or maintain insurance as required by this Agreement, the Authority shall have the right, at Authority ’s election, and upon 10 days’ prior notice to Developer, to procure and maintain such insurance. The premiums paid by Authority shall be treated as a loan due from Developer, which Developer agrees to pay on the first day of the month following the date on which the premiums were pai d. Authority shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s).

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Section 310 Disclaimer of Responsibility by Authority

Authority neither undertakes nor assumes nor shall have any responsibility, right or duty to Developer or to any third party to review, inspect, supervise, pass judgment upon or inform Developer or any third party of any matter in connection with the Property or the Project, whether with respect to the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Project, any person furnishing the same or otherwise. Developer and all third parties shall rely upon their own judgment regarding such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Developer or to any third party by Authority in connection with such matter is for the public purpose of providing affordable housing, and neither Developer (except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon.

Section 311 Rights of Access

Commencing upon the Closing , representatives of Authority and City shall have the reasonable right of access to the Property, upon two business days’ written notice to Developer (except in the case of an emergency, in which case Authority shall provide such notice as may be practical under the circumstances), without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, incl uding, without limitation, the inspection of the work being performed. Such representatives of Authority or City shall be those who are so identified in writing by the Authority Executive Director.

Section 312 Taxes, Assessments, Encumbrances and Liens

Commencing upon the Closing , Developer shall pay prior to delinquency all real estate taxes and assessments assessed and levied on or against the Property . Developer shall not place, or allow to be placed, on title to the Property or any portion thereof or any interest therein, any mortgage, trust deed, encumbrance or lien unless approved in writing by the Authority . In addition, Developer shall remove, or shall have removed, any levy or attachment made on the Property (or any portion thereof or interest therein), or shall assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. Nothing herein contained shall be deemed to prohibit Developer from contesting the validity or amount of any tax assessment, encumbrance or lien, or to limit the remedies available to Developer in respect thereto.

Section 313 Rights to Plans

a. All work product prepared pursuant to this Agreement, including , without limitation, all Plans, construction documents, soils tests and similar reports, p ermits and other entitlements are hereby assigned to Authority as security for Developer’s obligations hereunder.

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In the event that this Agreement is terminated by Authority , Developer shall, within 10 days of such termination, transmit all such work product to Authority.

b. To effectuate the assignment described in paragraph a., concurrently with executing this Agreement, Developer shall execute and deliver to Authority the Assignment of Agreements, granting to Authority all of Developer’s rights to: ( i) the Plans prepared pursuant to this Agreement, (ii) the contracts between Developer and its architect (if any) and between Developer and its general contractor, (iii ) all p ermits relating to the Project and (iv) all similar rights and property interests. If no such work product exists or will exist, then execution and delivery to Authority of the Assignment of Agreements shall not be required.

Section 314 Release of Construction Covenants

a. Promptly after Completion, as generally and specifically required by this Agreement, Authority shall furnish Developer with a Release of Construction Covenants upon written request therefor by Developer. Authority shall not unreasonably withhold such Release of Construction Covenants, and such Release of Construction Covenants shall be issued so long as Developer has constructed and developed the Project in accordance with this Agreement and the Plans approved by Authority. Such Release of Construction Covenants shall be, and shall so state, conclusive determination of satisfactory completion of all of the construction required by this Agreement.

b. The Release of Construction Covenants shall be in such form as to permit it to be recorded in the official records of Los Angeles County. A Release of Construction Covenants for completion of less than the Project in its entirety shall not be recorded.

c. If Authority refuses or fails to furnish a Release of Construction Covenants after written request from Developer, then Authority shall, within 30 days of the written request, provide Developer with a written statement of the reasons Authority refused or failed to furnish a Release of Construction Covenants. The statement shall also contain Authority ’s opinion of the action Developer shall take to obtain a Release of Construction Covenants. If the reason for such refusal is confined to the immediate availability of s pecific items or materials for landscaping, and/or minor items, then Authority shall issue its Release of Construction Covenants upon the posting of a bond by Developer with Authority in an amount representing the fair value of the work not yet completed.

d. Such Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code.

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ARTICLE IV USE OF PROPERTY

Section 401 Uses

a. Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof or any interest therein) that Developer, its successors and assigns shall use the Property exclusively to develop, construct, and operate the Project which shall include the following: (i) twelve (12) 3-bedroom residential units as affordable housing for foster care youth with up to 6 foster youths in each such three-bedroom unit (except that at any time one unit may h ave one child of a resource caregiver and up to 5 foster youths) , with one (1) such residential unit to be made affordable to a Low Income household at an Affordable Rent and eleven (11) such residential units to be made affordable to Extremely Low Income households at an Affordable Rent , and (ii) two (2) units of transitional housing used to support the overall foster care program on the Property with both of the transitional units to be made affordable to Very Low Income households at an Affordable Rent , all as provided in the Agreement Containing Covenants. Each of the 12 foster youth units shall have an adjacent resource caregiver unit used by a resource caregiver providing support and caregiving 24 hours a day/7 days a week to the foster youth living in the adjacent foster youth unit. It is anticipated that Developer will receive a “per diem” from the County of Los Angeles Department of Children and Family Services that is meant to cover the rent and living expenses of the foster youth living in the foster youth units. Developer shall employ and oversee the resource caregivers.

b. The P arties acknowledge that this Agreement is subject to the provisions of California Health and Safety Code Section 33418 (as applied to the use of the Low and Moderate Income Housing Asset Fund by California Health and Safety Code S ection 33476.1), which provides in pertinent part:

“(a) An Agency will monitor, on an ongoing basis, any housing affordable to persons and families of low or moderate income developed or otherwise made available pursuant to any provisions of this part. As part of this monitoring, an Agency will require owners or managers of the housing to submit an annual report to the Agency. The annual reports will include for each rental unit the rental rate and the income and family size of the occupants... The income information required by this section will be supplied by the tenant in a certified statement of a form provided by the Agency.”

Accordingly, Developer shall submit to Authority on an annual basis the annual report required by California Health and Safety Code Section 33418. The annual report shall include for each foster youth residential unit the rental rate and the income and number of foster youth occupants. The income information shall be supplied in a certified statement on a form provided by Authority.

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c. No later than 45 days before the commencement of construction, Developer shall submit to the Authority Executive Director for approval a proposed plan for managing and operating the Project, which shall address a satisfactory level of management, maintenance, and security services (the “Management Plan”). Developer shall manage and operate the Property in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by Developer and the Authority Executive Director or designee, for the entire Restricted Period.

d. Developer shall submit no later than 45 days before the commencement of construction and then 45 days before the beginning of each successive fiscal year after Completion during the Restr icted Period an estimated annual budget for management of the Property (the “Annual Operating Budget”) in accordance with the Management Plan. The Annual Operating Budget shall include all necessary operating expenses, current maintenance charges, expenses of reasonable upkeep and repairs, taxes and special assessment levies, prorated amount required for insurance and all other expenses incident to the oper ation of the Project and shall show the expected revenues to pay such expenses. The Annual Operating Budget, including any amendments proposed by Developer, shall be subject to the approval of the Authority Executive Director. Within 30 days following its receipt of the Annual Operating Budget, Authority shall deliver to Developer its written approval or disapproval thereof, which approval shall not be unreasonably withheld. If Authority disapproves the Annual Operating Budget, then it shall set forth its reasons with reasonable specificity , and Developer shall submit a revised Annual Operating Budget for Authority’s review.

e. Beginning on the date of first occupancy of the Project , and for each fiscal year thereafter of the Restricted Period, Developer shall submit an annual report on the management and operation of the Pro ject (the “Annual Report”), including such information as may be reasonably requested by the Authority Executive Director. The Authority Executive Director, in his/her sole discretion may waive the requirement of the Annual Report for one or more reporting periods. However, such waiver shall not operate to waive any subsequent requirement to submit an Annual Report.

f. The Agreement Containing Covenants shall contain appropriate provisions implementing this Section 401.

Section 402 Maintenance of Property

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maintenance of the Property and the Project (the “Maintenance Program”) and a proposed first - year budget for its implementation (the “Annual Maintenance Budget”).

b. The Maintenance Program shall describe in reasonable detail the standards to be followed in maintaining the interior and exterior of the Project, including a schedule indicating the proposed frequency of each element of maintenance, and shall include, at a minimum, the following: periodic cleaning of the interior and exterior of the Project , including windows, removing graffiti, removing debris and waste materials and otherwise maintaining indoor and outdoor areas of the Property, maintaining any lawns, plants, shrubs and trees or other landscaping planted on the Property, performing inspections of all exterior features to determine whether repairs are required, conducting periodic protective treatments such as rust removal and caulking, conducting repairs to facades, roof, doors, w indows and other exterior features, maintaining fencing and other security devices and systems, periodic repainting of the exterior, periodic repainting of the interior units and com mon areas, periodic replacing of the interior unit carpets, checking and repairing or replacing as need of building systems, including, without limitation, the heating and cooling systems, smoke alarms, carbon monoxide alarms, and water heaters, checking interior unit appliances and monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including amendments proposed by Developer , shall be subject to the approval of the Authority Executive Director.

c. At all times during the Restricted Period, Developer shall maintain the Property and the Project in accordance with the approved Maintenance Program. To implement this requirement, Developer agrees to budget sufficient funds to pay for all reasonably anticipated costs (as indicated in the Annual Maintenance Budget to be submitted to Authority with the proposed Annual Operating Budget ). If Developer fails to maintain the Property and the Project in accordance with the approved Maintenance Program, then Authority shall have the right, but not the obligation, to enter the Property, correct any violation, and hold Developer responsible for the cost thereof, and such cost, until paid, shall constitute a lien on the Property. Authority agrees that it shall not exercise its rights under this paragraph until Authority has given notice to Developer and Developer fails to cure such default within 30 days; provided, however, that Developer shall have such additional time as may be reasonably necessary in order to cure such default if Developer has commenced to cure within such 30-day period and is diligently prosecuting the cure to completion; and provided further, that if Developer’s failure to maintain the Property has, in Authority’s reasonable judgment, created a condition that presents an immediate threat to health and safety, then Authority is only required to give such notice as is reasonable under the circumstances.

d. The Agreement Containing Covenants shall contain appropriate provisions implementing this Section 402.

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Section 403 Obligation to Refrain from Discrimination

Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof or interest th erein, there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, sexual orientation, marital status, race, color, creed, religion, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall 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 Property. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:

1. 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 any basis listed in subdivision (a) or (d) of Section 12955 of the California Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California Government Code, in the sale, lease, sublease, t ransfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subl essees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”

Notwithstanding the preceding paragraph, the provisions relating to discrimination on the basis of familial status shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the California Government Code nor be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the California Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the California Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the California Government Code shall also apply to the preceding paragraph.

2. In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:

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That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the California Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased.”

Notwithstanding the preceding paragraph, the provisions relating to discrimination on the basis of familial status shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the California Government Code nor be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the California Civil Code, rel ating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the California Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the California Government Code shall also apply to the preceding paragraph.

3. In contracts: There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the California Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself 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 of the land.”

Section 404 Effect and Duration of Covenants

The covenants established in this Agreement shall , without regard to technical classification and designation, be binding on Developer and any successor in interest to the Property or any part thereof or interest therein for the benefit and in favor of Authority , its successors and assigns, and City.

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Section 405 Effect of Violation of Terms and Provisions of Agreement

Authority and City are deemed beneficiaries of the terms and provisions of this Agreement and the covenants herein, both for and in their own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit this Agreement and the covenants running with the land have been provided. Authority and City shall have the right if the covenants contained in this Agreement are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants are entitled.

ARTICLE V DEFAULTS, REMEDIES AND TERMINATION

Section 501 Defaults – General

a. Subject to Force Majeure Del ay, failure or delay by either P arty to perform any term or provision of this Agreement constitutes a defa ult under this Agreement. The P arty who fails or delays shall expeditiously commence to cure, correct or remedy such failure or delay and complete such cure, correction or remedy with reasonable diligence.

b. The injured P arty shall give wr itten notice of default to the P arty in default, specifying the default complained of by the injured P arty. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this Agreement, 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. Delays by either Party in asserting any of its rights and remedies shall not deprive either P arty 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.

c. If a mone tary event of default occurs, then prior to exercising any r emedies hereunder, the injured Party shall give the Party in default written notice of such default. The Party in default shall have a period of thirty (30) days after such notice is given within which to cure the default prior to exercise of remedies by the injured Party.

d. If a non- monetary event of default occurs, then prior to exercising any remedies hereunder, the injured Party shall give the Party in default written notice of such default. I f the default is reasonably capable of being cured within thirty ( 30) calendar days after such notice is received or deemed received, then the Party in default shall have such period to effect a cure prior to exercise of remedies by Authority . If the defa ult is such that it is not reasonably capable of being cured within said 30- day period, and the Party in default (i) initiates corrective action within Affordable Housing Agreement Agreement No. A-7950
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said period and (ii ) diligently, continually, and in good faith works to effect a cure as soon as possible, then the Party in default shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the injured Party but not later than ninety (90) days after receipt of such written notice . In no event shal l Authority as the injured Party be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default.

Section 502 Institution of Legal Actions

Subject to the notice and cure provisions of Section 501 and the limited recourse provisions of Section 511, in addition to any other rights or remedies (and except as otherwise provi ded in this Agreement), either Party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions shall be instituted in the Superior Court of the County of Los Angeles, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California.

Section 503 Applicable Law

The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement, without reference to the principles relating to conflicts of law.

Section 504 Acceptance of Service of Process

a. If legal action is commenced by Developer against Authority, then service of process on Authority shall be made by personal service upon the Authority Executive Director or in such other manner as may be provided by law.

b. If legal action is commenced by Authority against Developer, then service of process on Developer shall be made by personal service upon Developer (or upon an officer of Developer) and shall be valid whether made within or without the State of California, or in such manner as may be provided by law.

Section 505 Rights and Remedies Cumulative

Except with respect to rights and remedies expressly declared to be exclusive 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 defa ult by the other Party.

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Section 506 Damages

If either Party defaults with regard to any of the provisions of this Agreement, then subject to the notice and cure provisions of Section 501 and the limited recourse provisions of Section 511, the defaulting P arty shall be liable to the non -defaulting Party for any damages caused by such default, and the non-defaulting Party may, after such notice and opportunity to cure (but not before) commence an action for damages against the defaulting Party with respect to such default.

Section 507 Specific Performance

If either Party defaults with regard to any of the provisions of this Agreement, then subject to the notice and cure provisions of Section 501, the non-defaulting Party, at its option, may, after such notice and opportunity to cure (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default.

Section 508 Termination by Authority Before Closing

Notwithstanding anything in this Agreement to the contrary, Authority shall have the right to terminate this Agreement, in its sole discretion and without further notice to Developer and without requirement of the expiration of any cure period, in the event of any one or more of t he following:

a. Developer fails to acquire fee simple title to the Property by October 31, 2022 subject to three (3) up to thirty (30) day extensions as may be approved in writing by the Authority Executive Director for a total of ninety (90) additional days to acquire the Property;

b. Closing does not by occur by October 31, 2022 subject to three (3) up to thirty (30) day extensions as may be approved in writing by the Authority Executive Director for a total of ninety (90) additional days;

c. There is a Transfer or attempted Transfer in violation of this Agreement, and such breach is not cured within the time provided in Section 501;

d. Developer fails to submit any of the reports, plans, drawings (if necessary) and related documents required by this Agreement by the respective dates provided in this Agreement therefor, and has failed to cure such default within 60 days after receiving written notice from Authority; or

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e. Developer otherwise materially breaches this Agreement, and such breach is not cured within the time provided in Section 501.

Section 509 Termination by Authority After Closing

After the Closing, but before Completion, Authority shall have the right to terminate this Agreement if any of the following defaults occur:

a. Developer fails to s ubmit to the Authority for approval the Final Construction Drawings and Specifications within the time set forth therefor in the Schedule of Performance and such breach is not cured within 90 days after receipt of written notice from the Authority;

b. Developer fails to submit to the Authority its Evidence of Financing within the time set forth therefor in the Schedule of Performance and such breach is not cured within 90 days after receipt of written notice from the Authority;
c. Developer fails to commence construction of the Project within the time set forth therefor in the Schedule of Performance and such breach is not cured within 90 days after receipt of written notice from the Authority;

d. Developer abandons or substantially suspends construction of the Project for a consecutive period of at least 120 days and such breach is not cured within 90 days after receipt of written notice from the Authority;

e. Completion does not occur within the time set forth therefor in the Schedule of Performance and such breach is not cured within 90 days after receipt of written notice from the Authority;

f. There is a Transfer or attempted Transfer in violation of this Agreement, and such breach is not cured within 90 days after receipt of written notice from the Authority; or

g. Developer otherwise materially breaches this Agreement, and such breach is not cured within 90 days after receipt of written notice from the Authority.

Section 510 Termination by Either Party

Prior to the Closing , either Party shall have the right to terminate this Agreement if the other Party is in default of any material term or provision of this Agreement, and, following notice, fails to cure such default within 90 days after receipt of written notice from Authority.

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Section 511 Limited Recourse Obligations

Subject to the provisions and limitations of this Section 511, the obligation to repay the Authority Loan is a nonrecourse obligation of Developer. Developer shall not have any personal liability for repayment of the Authority Loan, except as provided in this Section 511. The sole recourse of Authority shall be the exercise of its rights against the Property and any related security for the Authority Loan; p rovided, however, that the foregoing shall not (i) constitute a waiver of any obligation evidenced by the Authority Note or the Authority Deed of Trust, (ii) limit the right of Authority to name Developer as a party defendant in any action or suit for judicial foreclosure and sale under the Authority Note or the Authority Deed of Trust or any action or proceeding thereunder so long as no judgment in the nature of a deficiency judgment shall be asked fo r or taken against Developer, (iii) release or impair the Authority Note or the Authority Deed of Trust, (iv) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy against the mortgaged Property or any other instrument sec uring the Authority Note or as prescribed by law or in equity in case of default, (v) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, its remedies in respect of any deposits, insurance proceeds, condemnation awards or other monies or other collateral or letters of credit securing the Authority Note, (vi) relieve Developer of any of its obligations under any indemnity delivered by Developer to Authority or (vii) affect in any way the validity of any guarantee or indemnity from any person of all or any of the obligations evidenced and secured by the Authority Note or the Authority Deed of Trust. Notwithstanding the first sentence of this paragraph, Authority may recover directly from Developer, or from any other party:

a. any damages, costs and expenses incurred by Authority as a result of fraud or any criminal act or acts of Developer or any partner, shareholder, officer, director or employee of Developer, or of any member or general or limited partner of Developer, or of any member or general or limited partner of such member or general or limited partner;

b. any damages, costs and expenses incurred by Authority as a result of any misappropriation of funds provided for the acquisition of the Property, development and construction of the Project , rents and reve nues from the operation of the Project or proceeds of insurance policies or condemnation proceeds;

c. any and all amounts owing by Developer pursuant to the indemnification regarding Hazardous Substances given in the Environmental Indemnity; and

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d. all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions.

ARTICLE VI GENERAL PROVISIONS

Section 601 Notices, Demands and Communications between Parties

Formal notices, demands and communications between the Parties shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Parties, as designated in Section 103 and 104, respectively. 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 601. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by the recipient; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof.

Section 602 Conflicts of Interest

a. 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 this Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is, directly or indirectly, interested.

b. Developer warrants that it has not paid or given, and shall not pay or give, any third party any money or other consideration for obtaining this Agreement.

Section 603 Nonliability of Authority Officials and Employees

No member, official, employee or consultant of Authority shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Authority or for any amount that may become due to Developer or to its successor, or on any obligations under the terms of this Agreement.

Section 604 Force Majeure

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In addition to specific provisions of this Agreement, performance by either Party shall not be deemed to be in default where delays or defaults are due to Force Majeure Events.

Section 605 Inspection of Books and Records

Developer shall maintain at a location in Los Angeles County complete , accurate, and current records pertaining to the Property and the Project for a period of five years after the creation of such records, and shall permit any duly authorized representative of Authority to inspect and copy records, during regular business hours. Records shall be kept accurate and current.

Section 606 Real Estate Commissions

Neither Party shall be liable for any real estate commissions, brokerage fees or finders ’ fees which may arise from this transaction. The Parties each represent to the other that it has not employed any broker, agent or finder in connection with this transaction and agrees to indemnify, defend, and hold harmless the other Party for any costs, fees, and/or expenses related to any broker, agent, or finder. This indemnity shall survive any termination of this Agreement.

Section 607 Approvals

a. Except as otherwise expressly provided in this Agreement, approvals required of either Party shall not be unreasonably withheld or delayed. All approvals shall be in writing.

Except as otherwise expressl y provided in thi s Agreement, failure by either P arty to approve a matter within the time provided for approval of the matter shall not be deemed a disapproval, and failure by either Party to disapprove a matter within the time provided for approval of the matter shall not be deemed an approval.

b. Except as otherwise expressly provided in this Agreement, approvals required of Authority shall be deemed granted upon the written approval of the Authority Executive Director or designee. Notwithstanding the foregoing, the Authority Executive Director or designee may, in his or her sole discretion, refer to the governing body of Authority any item requiring Authority approval; otherwise, “Aut hority approval” shall mean and refer to approval by the Authority Executive Director or designee.

Section 608 No Partnership

Nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture, or any other si milar relationship b etween the P arties or cause Authority to be responsible in any way for the debts or obligations of Developer or any other Person.

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Section 609 Compliance With Law

Developer agrees to comply with all the requirements now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities, pertaining to the development and use of the Property and the Project, as well as operations conducted thereon. The judgment of any court of competent jurisdiction, or the admission of Developer in any action or proceeding, whether Authority be a party thereto or not, that Developer has violated any such ordinance or statute shall be conclusive of that fact as between the Parties.

Section 610 Incorporation by Reference

Each of the attachments and exhibits attached hereto is incorporated herein by this reference.

Section 611 Interpretation

a. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against either Party. The Parties acknowledge and agree that this Agreement has been prepared jointly by the P arties and has been the subject of arm’s length and careful negotiation over a consider able period of time, that each Party has been given the opportunity to independently review this Agreement with legal counsel, and that each Party has the requisite experience and sophistication to understand, interpret and agree to the particular language of the provisions hereof . Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the Party preparing it, and instead, other rules of interpretation and construction shall be utilized.

b. If any term or provision of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by either Party , shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and each other term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law . It is the intention of the P arties that in lieu of each clause or provision of this Agreement that is illegal, invalid or unenforceable, there be added as a part of this Agreement an enforceable clause or provision as similar in terms to such illeg al, invalid or unenforceable clause or provision as may be possible.

c. The captions of the articles, sections and subsections herein are inserted solely for convenience and under no circumstances are they or any of them to be treated or construed as part of this instrument.

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d. References in this instrument to this “Agreement” mean, refer to and include this instrument as well as any riders, exhibits, addenda and attachments hereto (which are hereby incorporated herein by this reference) or other documents expressly incorp orated by reference in this instrument. Any references to any covenant, condition, obligation and/or undertaking “herein”, “hereunder”, or “pursuant hereto” (or language of like import) mean, refer to, and include the covenants, obligations and undertakings existing pursuant to this instrument an d any riders, exhibits, addenda and attachments or other documents affixed to or expressly incorporated by reference in this instrument.

e. As used in this Agreement, and as the context may require, the singular incl udes the plural and vice versa, and the masculine gender includes the feminine and vice versa.

Section 612 No Third Party Beneficiaries

This Agreement is made solely and specifically between the Parti es and their respective successors and assigns; and, except for the City and as expressly provided otherwise in this Agreement, no other person shall have any rights, interest or claims under this Agreement or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.

Section 613 Authority to Sign

Developer hereby represents that the person executing this Agreement on behalf of Developer has full authority to do so and to bind Developer to perform pursuant to the terms and conditions of this Agreement.

Section 614 Time of Essence

Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement.

ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS

a. This Agreement shall be executed in two duplicate originals each of which is deemed to be an original. This Agreement shall constitute the entire understanding and agreement of the Parties.

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b. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties with respect to all (or any part of or any interest in) the Property.

c. All waivers of the provisions of this Agreement shall be in writing and signed by the appropriate authorities of the relevant Party, and all amendments hereto shall be in writing and signed by the appropriate authorities of the Parties to be bound thereby. This Agreement and any provisions hereof may be amended by mutual written agreement by Developer and the Authority Executive Director, subject to review and approval by Authority’s governing body as needed to comply with applicable law and Authority policies and procedures.

d. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute one Agreement binding on the Parties.

ARTICLE VIII TIME FOR ACCEPTANCE OF AGREEMENT BY AUTHORITY; DATE OF

AGREEMENT

This Agreement, when executed by Developer and delivered to Authority , shall not be effective until executed by Authority following a noticed public hearing as may be required by law. If Authority fails to approve, execute and deliver this Agreement to Developer within 60 days after this Agreement is signed by Developer , then Developer shall have the right to withdraw its offer to enter into this Agreement by providing written notice to Authority . This Agreement is dated for reference purposes as of the date set forth in the introductory paragraph hereof, but shall not be effective until executed by the Authority Executive Director.

[Remainder of Page Intentionally Left Blank; Signatures on Following Page]

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“AUTHORITY”

HOUSING AUTHORITY OF THE CITY OF
PALMDALE, a public body, corporate and
politic

By:__________________________________
Ronda Perez
Executive Director

ATTEST:

By: _________________________________
Shanae Smith
Authority Secretary

APPROVED AS TO FORM:

By: _________________________________
Scott E. Porter
Acting Authority Counsel

KANE, BALLMER & BERKMAN
Authority Special Counsel

By: ________________________________

“DEVELOPER”
SOS CHILDREN’S VILLAGES
CALIFORNIA, INC., a nonprofit public benefit
corporation

By: ___________________________________
Anna Levin
Secretary

Affordable Housing Agreement Agreement No. A-7950
SOS Children’s Villages California, Inc. APN: 3018-026-001 Attachment No. 1 – Legal Description Page 1

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALMDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 24, IN SECTION 30, TOWNSHIP 6 NORTH, RANGE 11 WEST, SAN BERNARDINO

BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY OF

SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT IN THE CITY OF

PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP

SHOWING A PORTION OF THE LANDS OF THE PALMDALE COLONY COMPANY, IN BOOK 52 PAGE(S) 71, OF MISCE LLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN/Parcel ID(s): 3018-026-001

This map/plat is being furnished as an aid in locating the herein described Land in relation to adjoining streets, natural boundaries and other land, and is not a survey of the land depicted. Except to the extent a policy of title insurance is expressly modified by endorsement, if any, the Company does not insure dimensions, distances, location of easements, acreage or other matters shown thereon.

Order: 122210151 Page 1 of 1 Requested By: CTGLDNA21, Printed: 2/24/2022 5:38 PM Doc: CALOSA:MASS 3018-00026
4419508.2
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Recording Requested by
and When Recorded Return to:

City Clerk, City of Palmdale
38300 Sierra Highway, Suite C
Palmdale, California 93550-4611

SPACE ABOVE THIS LINE FOR RECORDER’S USE

GOVERNMENT BUSINESS
Free Recording
(Cal. Govt. Code §27383)

SOS Children’s Villages California, Inc. Agreement No. A-7950 APN: 3018-026-001

AGREEMENT CONTAINING COVENANTS

BY AND BETWEEN HOUSING AUTHORITY OF THE CITY OF PALMDALE AND SOS CHILDREN’S VILLAGES CALIFORNIA, INC.

THIS AGREEMENT CONTAINING COVENANTS ( this “ACC”), dated as of ______________________, 2022, is entered into by and between the HOUSING AUTHORITY OF THE CITY OF PALMDALE , a public body corporate and politic (“Authority”), and SOS CHILDREN’S VILLAGES CALIFORNIA, INC. , a nonprofit public benefit corporation (“Developer”).

WHEREAS, Developer is the owner that certain real property (the “Property”) located in the City of Palmdale , California, as more particularly described in Exhibit A which is attached hereto and incorporated herein by this reference; and

WHEREAS, for the purpose of providing housing that shall be affordable to Extremely Low Income and Low Income foster youth and Very Low Income households , the Parties have entered into an Affordable Housing Agreement dated as of July 13, 2022 (the “Agreement”), which is incorporated herein by this reference, and any capitalized term that is not otherwise defined in this ACC shall have the meaning ascribed to such term in the Agreement; and

WHEREAS, the Agreement contains certain provisions relating to the use of the Property.

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NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE

RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES COVENANT AND AGREE AS FOLLOWS:

1. Developer hereby covenants and agrees on behalf of itself and its successors and assigns in the Property or any portion thereof or any improvements thereon or any interest therein that Developer and such successors and assigns shall develop and construct the Project on the Property, in accordance with the Authority Loan Documents and plans approved by City, and for no other purpose.

2. a. Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that Develope r, its successors and assignees shall use the Property exclusively to develop, construct, and operate the Project which shall include the following: (i) twelve (12) 3-bedroom residential units as affordable housing for foster care youth with up to 6 foster youths in each such three-bedroom unit (except that at any time one unit may have one child of a resource caregiver and up to 5 foster youths), with one (1) such residential unit to be made affordable to a Low Income household at an Affordable Rent and eleven (11) such residential units to be made affordable to Extremely Low Income households at an Affordable Rent, and (ii) two (2) units of transitional housing used to support the overall foster care program on the Property with both of the transitional units to be made affordable to Very Low Income households at an Affordable Rent, all as provided in this ACC. Each of the 12 foster youth units shall have an adjacent resource caregiver unit used by a resource caregiver providing support and caregiving 24 hours a day/7 days a week to the foster youth living in the adjacent foster youth unit.

b. The income and affordability levels of the fourt een (14) affordable units shall be allocated as follows:
(i) One (1) 3-bedroom foster youth residential unit shall be made available as transitional housing exclusively to Low Income foster youth at an Affordable Rent as provided in California Health and Safety Code Section 50053 (an “Affordable Rent”); (ii) Eleven (11) 3-bedroom foster youth residential units shall be made available as transitional housing exclusively to Extremely Low Income foster youth at an Affordable Rent; and
(iii) Two (2) residential units which s upport the overall foster care program on the Property shall be made available as transitional housing exclusively to Very Low Income households at an Affordable Rent.

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c. For purposes of this ACC , the maximum incomes of eligible foster youth occupants for the foster youth residential units shall be determined on the basis of the income limits for Extremely Low Income and Low Income households , as applicable, adjusted for household size, in the Los Angeles-Long Beach SMSA, published approximately annually by the California Department of Housing and Community Development (“ HCD”), and the maximum incomes of eligible occupants for the transitional housing residential units shall be determined on the basis of the income limits for Very Low Income households, adjusted for household size, in the Los Angeles-Long Beach SMSA, published approximately annually by HCD. If HCD discontinues publishing such income limits, then the term “ Extremely Low Income” shall mean a household income that does not exceed 30% of the area median income (the “Area Median Income ”), adjusted for household size; “Very Low Income” shall mean a household income that does not exceed 50% of the Area Median Income, adjusted for family size; and “Low Income” shall mean a household income that does not exceed 80% of the Area Median Income, adjusted for household size.
d. Household income shall be determined using the income sources set forth in Section 6914 of Title 25 of the California Code of Regulations . Immediately prior to a n occupancy of an affordable unit, Developer shall obtain and maintain on file an income computation and certification form from such prospective occupant dated immediately prior to the date of initial occupancy. Developer shall verify that the income information provided by an applicant is accurate by following all applicable Authority policies and procedures and by taking one or more of the following steps as a part of the verification process: (i) obtaining two pay stubs from the most recent pay periods, (ii) obtaining a written verification of income and employment from applicant’s current employer, (iii) obtaining an income verification form from the Social Security Administration and/or the California Department of Social Services if the ap plicant receives assistance from either agency, (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, then obtaining other verification of such applicant’s incom e as is reasonably satisfactory or (v) obtain ing such other information as may be reasonably required.

Developer shall update the foregoing records annually and provide copies of updated occupant eligibility records and monthly rental records to Authority for review. Upon review of such records, Authority may at its option perform an independent audit of the occupant eligibility records in order to verify compliance with the income and affordability requirements set forth herein. Developer shall retain the records described in this Section for a period of five years after the date each record was created.

3. Maximum Rents.

a. Rents charged to occupant s of an Extremely Low Income unit shall not exceed rents that are affordable to Extremely Low Income households. The maximum rent, including a reasonable utility allowance for utilities and services (excluding telephone), to be paid Affordable Housing Agreement Agreement No. A-7950
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by Extremely Low Income households shall be a rent that does not exceed 30% of 30% of the Area Median Income, adjusted for household size appropriate to the unit.

b. Rents charged to occupants of a Very Low Income unit shall not exceed rents that are affordable to Very Low Income h ouseholds. The maximum rent , including a reasonable utility allowance for utilities and services (excluding telephone) , to be paid by Very Low Income h ouseholds shall be a rent that does not exceed 30% of 50% of the Area Median Income, adjusted for household size appropriate to the unit.

c. Rents charged to occupants of the Low Income unit shall not exceed rents that are affordable to Low Income households. The maximum rent, including a reasonable utility allowance for utilities and services (excluding telephone), to be paid by the Low Income household shall be a rent that does not exceed 30% of 8 0% of the Area Median Income, adjusted for household size appropriate to the unit.

d. This affordability requirement shall continue in effect for the full Term of this ACC.
e. Failure to comply with the affordability requirements of this ACC is an event of default under the terms of the Authority Loan. Pursuant to the Authority Note evidencing the Authority Loan, subject to the right to cure, the Authority Loan shall be due and payable immediately if the housing does not meet the affordability requirements of this ACC. f. Upon request, the Authority Executive Director shal l notify Developer of the maximum rents that may be charged , based on the then- current Area Median Income (not to exceed an Affordable Rent), and the maximum income of households who are eligible to occupy the Property.
g. Developer, its successors and assigns shall not receive rents in excess of an Affordable Rent.

4. The occupancy of the residential units must meet the following requirements:

a. It is consistent with the purpose of providing affordable housing for Extremely Low Income, Very Low Income, and Low Income households;

b. It is related to program eligibility; and

c. And it is consistent with other policies and criteria acceptable to the Authority.

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5. If, in the future, additional residential units are developed on the Property, any such additional residential units shall be made available at the same income and rent levels as the units initially developed on the Property as follows:

a. Any foster youth residential units shall be made available as transitional housing exclusively to Extremely Low I ncome foster youth at an Affordable Rent . A djacent resource caregiver units used by a resource caregiver providing support and caregiving 24 hours a day/7 days a week to the foster youth living in the adjacent foster youth unit shall not be income or rent restricted; and
b. Any transitional housing r esidential units which are to support the overall foster care program on the Property shall be made available as transitional housing exclusively to Very Low Income households at an Affordable Rent.
c. Any such future residential units shall be subject to all other terms and conditions of this ACC.

6. Developer, its successors and assigns shall not refuse to accept for occupancy otherwise eligible qualifying occupants that are holders of a certificate or voucher under 24 CFR part 982-Section 8 Tenant-Based Assistance: Unified Rule for Tenant-Based Assistance under the Section 8 Rental Certificate Program and the Section 8 Rental Voucher Program or to the holder of a comparable documen t evidencing participation in a HOME tenant -based rental assistance program because of the status of the prospective tenant as a holder of such certificate of family participation, rental voucher or comparable HOME tenant-based assistance document.

7. The Parties acknowledge that this ACC is subject to the provisions of California Health and Safety Code Section 33418 (as applied to the use of the Low and Moderate Income Housing Asset Fund by California Health and Safety Code Section 33476.1), which provide s in pertinent part:

“(a) An Agency will monitor, on an ongoing basis, any housing affordable to persons and families of low or moderate income developed or otherwise made available pursuant to any provisions of this part. As part of this monitoring, an Agency will require owners or managers of the housing to submit an annual report to the Agency. The annual reports will include for each rental unit the rental rate and the income and family size of the occupants. The income information required by this section will be supplied by the tenant in a certified statement of a form provided by the Agency.”

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Accordingly, Developer shall submit to Authority on an annual basis the annual report required by California Health and Safety Code Section 33418. The annual report shall include for each affordable residential unit the rental rate and the income and number of occupants. The income information shall be supplied in a certified statement on a form provided by Authority.

Developer shall provide for the submi ssion of such information in its lease or occupancy agreements.

8. Developer, its successors or assigns may not terminate an occupancy or refuse to renew the occupancy of a n occupant except as set forth in the Management Plan and in any agreement with the Los Angeles County Department of Children and Family Services.

9. Developer shall maintain the Project on the Property in compliance with all applicable housing quality standards and local code requirements and shall keep the Property free from any unreasonable accumulation of debris or waste materials.

10. Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, national origin, religion or sex in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall 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 Property.

All 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 any basis listed in subdivision (a) or (d) of Section 12955 of the California Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California Government Code, in the sale, lease, sublease, t ransfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”

b. 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:

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That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the California Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the California Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California Government Code, in the sale, lease, sublease, t ransfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself 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 s election, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees of the land.”

11. Developer shall submit the following:

No later than 45 days before the commencement of constructi on, Developer shall submit to the Authority Executive Director for approval a proposed plan for managing and operating the Project, which shall address a satisfactory level of management, maintenance, and security services (the “Management Plan”). Developer shall manage and operate the Property in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by Developer and the Authority Executive Director or designee, for the entire Term.

a. Developer shall submit no later than 45 days before the commencement of construction and then 45 days before the beginning of each successive fiscal year after Completion during the Term an estimated annual budget for management of the Property (the “Annual Operating Budget”) in accordance with the Management Plan. The Annual Operating Budget shall include all necessary operating expenses, current maintenance charges, expenses of reasonable upkeep and repairs, taxes and special assessment levies, prorated amount required for insurance and all other expenses incident to the operation of the Project and shall show the expected revenues to pay such expenses. The Annual Operating Budget, inc luding any amendments proposed by Developer, shall be subject to the approval of the Authority Executive Director. Within 30 days following its receipt of the Annual Operating Budget, Authority shall deliver to Developer its Affordable Housing Agreement Agreement No. A-7950
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written approval or disapprova l thereof, which approval shall not be unreasonably withheld. If Authority disapproves the Annual Operating Budget, then it shall set forth its reasons with reasonable specificity, and Developer shall submit a revised Annual Operating Budget for Authority’s review.
b. Beginning on the date of first occupancy of the Project, and for each fiscal year thereafter of the Term , Developer shall submit a n annual report on the management and operation of the Project (the “Annual Report”), including such information as may be reasonably requested by the Authority Executive Director. The Authority Executive Director, in his/her sole discretion may waive the requirement of the Annual Report for one or more reporting periods.

However, such waiver shall not operate to waive any subsequent requirement to submit an Annual Report.

12. Prior to Completion, Developer shall prepare and submit to the Authority Executive Director or designee for review and approval a program for the exterior and interior maintenance of the Property and the Project (the “Maintenance Program ”) and a proposed first -year budget for its implementation (the “ Annual Maintenance Budget ”). The Maintenance Program shall describe in reasonable detail the standards to be followed in maintaining the interior and exterior of the Project , including a schedule indicating the proposed frequency of each element of maintenance, and shall include, at a minimum, the following: periodic cleaning of the interior and exterior of the Project, including windows, removing graffiti, removing debris and waste materials and otherwise maintaining indoor and outdoor areas of the Property, maintaining any lawns, plants, shrubs and trees or other landscaping planted on the Property, performing inspections of all exterior features to determine whether repairs are required, conducting periodic protective treatments such as rust removal and caulking, conducting repairs to facades, roof, doors, windows and other exterior features, maintaining fencing and other security devices and systems, periodic repainting of the exterior, periodic repainting of the interior units and common areas, periodic replacing of the interior unit carpets, checking and repairing or replacing as need of building systems, including, without limitation, the heating and cooling systems, smoke alarms, carbon monoxide alarms, and water heaters, checking interior unit appliances and monitoring interior unit bathrooms for mold/mildew. The Maintenance Program, including amendments proposed by Developer, shall be subject to the approval of the Authority Executive Director.

At all times during the Term, Developer shall maintain the Property and the Project in accordance with the approved Maintenance Program. To implement this requirement, Developer agrees to budget sufficient funds to pay for all reasonably anticipated costs (as indicated in the Annual Maintenance Budget to be submitted to Authority with the proposed Annual Operating Budget). If Developer fails to maintain the Property and the Project in accordance with the approved Maintenance Program, then Authority shall have the right, but not the obligation, to enter the Property, correct any violation, and hold Developer responsible for the cost thereof, and such Affordable Housing Agreement Agreement No. A-7950
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cost, until paid, shall constitute a lien on the Property. Authority agrees that it shall not exercise its rights under this paragraph until Authority has given notice to Developer and Developer fails to cure such default within 30 days; provided, however, that Developer shall have such additional time as may be reasonably necessary in order to cure such default if Developer has commenced to cure within such 30-day period and is diligently prosecuting the cure to completion; and provided further, that if Developer’s failure to maintain the Property has, in Authority’s reasonable judgment, created a condition that presents an immediate threat to health and safety, then Authority is only required to give such notice as is reasonable under the circumstances.

13. The covenants established in this ACC and any amendments hereto approved by the Parties shall, without regard to technical classification and designation, be binding for the benefit and in favor of Authority , its successors and assigns, and City. The requirements of this ACC shall commence at the Closing and shall remain in effect for 55 years from the Closing (the “Term”), except that the nondiscrimination provisions of Section 10 shall remain in perpetuity.

14. Authority and City are deemed beneficiaries of the terms and provisions of this ACC and the covenants herein, both for and in their own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit this ACC and the covenants running with the land have been provided. Authority and City shall each have the right if the covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this ACC and covenants are entitled , without regard to whether Authority or City is or remains an owner of any land or interest therein to which such covenants relate.

15. Developer hereby subjects the Property to the covenants, reservat ions, and restrictions set forth in this ACC . The Parties hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon Developer’s success ors in title to the Property . The covenants and agreements contained herein shall run with the land.

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IN WITNESS WHEREOF, the Parties have executed this ACC as of the date first set forth above.

“AUTHORITY”

HOUSING AUTHORITY OF THE CITY OF
PALMDALE, a public body, corporate and
politic

By:__________________________________
Ronda Perez
Executive Director

ATTEST:

By: _________________________________
Shanae Smith
Authority Secretary

APPROVED AS TO FORM:

By:_________________________________
Scott E. Porter
Acting Authority Counsel

KANE, BALLMER & BERKMAN
Authority Special Counsel

By: ________________________________

“DEVELOPER”

SOS CHILDREN’S VILLAGES
CALIFORNIA, INC.,
a nonprofit public benefit
corporation

By: ___________________________________
Anna Levin
Secretary

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EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALMDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 24, IN SECTION 30, TOWNSHIP 6 NORTH, RANGE 11 WEST, SAN BERNARDINO

BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY OF

SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT IN THE CITY OF

PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP

SHOWING A PORTION OF THE LANDS OF THE PALMDALE COLONY COMPANY, IN BOOK 52 PAGE(S) 71, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN/Parcel ID(s): 3018-026-001

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ASSIGNMENT OF AGREEMENTS FROM SOS CHILDREN’S VILLAGES
CALIFORNIA, INC. TO HOUSING AUTHORITY OF THE CITY OF PALMDALE (A-7950)

FOR VALUE RECEIVED, as of ________, 2022, the undersigned, SOS CHILDREN’S VILLAGES CALIFORNIA, INC., a nonprofit public benefit corporation (“Developer”), assigns to the HOUSING AUTHORITY OF THE CITY OF PALMDALE , a public body, corporate and politic (“Authority”), all of its right, title and interest in and to:

1. All architectural, design, engineering and development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, the “Architectural Agreements”); and

2. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively the “Plans and Specifications”)

heretofore or hereafter entered into or prepared by any architect, engineer or other person or entity (collectively “Architect”), for or on behalf of Developer in connection with the development and construction of the Project on the Property described in Exhibit A attached. The Plans and Specifications, as of the date hereof, are those which Developer has heretofore, or will hereafter deliver to Authority.

This Assignment of Agreements (this “ Assignment”) constitutes a present and absolute assignment to Authority as of the date that it is executed by Developer (the “Effective Date”) , subject to the terms and provisions of the Affordable Housing Agreement by and between Developer and Authority, dated as of July 13, 2022 (the “Agreement”) wherein such assignment only becomes enforceable upon a breach and failure to cure by Developer as set forth therein; provided, however, that Authority confers upon Developer the right to enforce the terms of the Architectural Agreements and Developer’s ri ghts to the Plans and Specifications so long as no default or event which would constitute a default after notice or the passage of time, or both, has occurred and is continuing under the Agreement. Upon the occurrence of a default or event which would constitute a d efault after notice or the passage of time, or both, under the Agreement , Authority may, in its sole discretion, give notice to Architect of its intent to enforce the rights of Developer under the Architectural Agreements and of its rights to the Plans and Specifications and may initiate or participate in any legal proceedings respecting the enforcement of said rights.

Developer shall, within thirty (30) days after receipt of notice from Authority that Authority intends to enforce its rights under this Assignment, transmit all Plans and Specifications to Authority, subject to any required third- party consent, which Developer must use its best efforts to obtain. Developer acknowledges that by accepting this Assignment, Authority does not assume Affordable Housing Agreement Agreement No. A-7950
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any of Developer’s obligations under the Architectural Agreements or with respect to the Plans and Specifications.

Developer represents and warrants to Authority , as of the Effective Date, that: ( i) all Architectural Agreements entered into by Developer are in full force and effect and are enforceable in accordance with their terms , and no default, or event which would constitute a default after notice or the passage of time, or both, exists with respect to said Architectural Agreements, (ii) all copies of the Architectural Agreements and Plans and Specifications delivered to Authority are complete and correct and (iii) Developer has not assigned any of its rights under the Architectural Agreements or with respect to the Plans and Specifications.

Developer agrees: (i) to pay and perform all obligations of Developer under the Architectural Agreements, (ii) to enforce the payment and performance of all obligations of any other person or entity under the Architectural Agreements, (iii ) not to modify t he existing Architectural Agreements nor to enter into any future Architectural Agreements without Authority’s prior written approval except as otherwise may be permitted in the Agreement and (iv) not to assign further (other than assignment in connection with a loan which is senior in priority to Authority’s assignment), for security or any other purposes, its rights under the Architectural Agreements or with respect to the Plans and Specifications without Authority ’s p rior written consent.

This Assignment secures performance by Developer of all obligations of Developer under the Agreement. This Assignment is supplemented by the provisions of the Agreement and said provisions are incorporated herein by this reference.

The term “Agreement ” as used herein also means any future amendments and implementation agreements between the Parties regarding the Agreement which refer to this Assignment. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Agreement.

This Assignment shall be governed by the internal laws of the State of California, except to the extent that Federal laws preempt the laws of the State of California, and Developer consents to the jurisdiction of any Federal or State Court within the State of California having proper venue for the filing and maintenance of any action arising hereunder and agrees that the prevailing party in any such action shall be entitled, in addition to any other recovery, to reasonable attorneys’ fees and costs.

This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns and successors-in-interest of the Parties; provided, however, that this shall Affordable Housing Agreement Agreement No. A-7950
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not be construed and is not intended to waive any restri ctions on assignment, sale, transfer, mortgage, pledge, hypothecation or encumbrance by Developer contained in the Agreement.

This Assignment may be executed in several counterparts, each of which is an original, and all of which together constitute but one and the same document.

The attached Architect’s Consent, Schedule 1 and Exhibit A are incorporated herein by this reference.

“DEVELOPER”

SOS CHILDREN’S VILLAGES CALIFORNIA,
INC., a nonprofit public benefit corporation

By: ___________________________________
Anna Levin
Secretary

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ARCHITECT’S CONSENT

The undersigned A rchitect hereby consents to the foregoing Assignment to which this Architect’s Consent is part, and acknowledges that there presently exists no unpaid claims due to Architect except as set forth on Schedule 1 attached hereto, arising out of the preparation and delivery of the Plans and Specifications to Developer and/or the performance of Architect’s obligations under the Assignment.

Architect agrees that if, at any time, Authority, pursuant to its rights under the Agreement, elects to undertake or cause the completion of development and construction of the Project on any portion of the Property, in accordance with the Plans and Specifications, and gives Architect written notice of such election , then, so long as Architect has received, receives or continues to receive the compensation called for under the relevant Architectural Agreements, Authority may, at its option, use and rely on the Plans and Specifications for the purpos es for which they were prepared, and Architect shall continue to perform its obligations under the Architectural Agreements for the benefit and account of Authority in the same manner as if performed for the benefit or account of Developer in the absence of the Assignment.

Architect further agrees that, in the event of a breach by Developer of the Architectural Agreements, or any agreement entered into with Architect in connection with the Plans and Specifications, so long as Developer’s interest in the Architectural Agreements and Plans and Specifications is assigned to Authority , Architect shall give written notice to Authority of such breach at the address shown below. Authority shall have 30 days from the receipt of such written notice of default to remedy or cure said default. Nothing herein shall require Authority to cure said default or to undertake completion of development and construction of the Project.

Architect warrants and represents that it/he has no knowledge of any prior assignment(s) of any interest in the Plans and Specifications and/or the Architectural Agreements. Except as otherwise defined herein, the terms used herein shall have the meanings given them in the Assignment.

Dated ______________________, 2022.

By: _______________________

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Architect’s Address:

444 Flower Street, Suite 1200
Los Angeles, CA 90071
Attn: Tom Hsieh

Authority’s Address:

HOUSING AUTHORITY

CITY OF PALMDALE
38250 Sierra Highway
Palmdale, California 93550-4611
Attn: Executive Director
Affordable Housing Agreement Agreement No. A-7950
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SCHEDULE 1

SCHEDULE OF UNPAID CLAIMS

[behind this page]
Affordable Housing Agreement Agreement No. A-7950
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EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALMDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 24, IN SECTION 30, TOWNSHIP 6 NORTH, RANGE 11 WEST, SAN BERNARDINO

BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY OF

SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT IN THE CITY OF

PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP

SHOWING A PORTION OF THE LANDS OF THE PALMDALE COLONY COMPANY, IN BOOK 52 PAGE(S) 71, OF MISCELLANEOUS RECOR DS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN/Parcel ID(s): 3018-026-001

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Recording Requested by
and When Recorded Return to:

City Clerk, City of Palmdale
38300 Sierra Highway, Suite C
Palmdale, California 93550-4611

SPACE ABOVE THIS LINE FOR RECORDER’S USE

GOVERNMENT BUSINESS
Free Recording
(Cal. Govt. Code §27383)

SOS Children’s Villages California, Inc. Agreement No. A-7950 APN: 3018-026-001

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS) BY SOS CHILDREN’S VILLAGES CALIFORNIA, INC.

FOR THE BENEFIT OF THE HOUSING AUTHORITY OF THE CITY OF PALMDALE

This Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) (this “ Deed of Trust ”) is made ________, 2022 by SOS CHILDREN’S VILLA GES CALIFORNIA, INC. (hereinafter referred to as “ Trustor”) (whose address is 8484 Wilshire Boulevard, Suite 500, Beverly Hills, CA 90211- 2404), to CHICAGO TITLE COMPANY, (hereinafter called “Trustee”), for the benefit of the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body corporate and politic (hereinafter called “ Beneficiary”), whose address is 38250 Sierra Highway, Palmdale, California 93550-3609.

Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION f or the benefit of the Beneficiary all present and future right, title and interest of Trustor in and to the following property (the “Trust Estate”):

(a) That certain real property in the City of Palmdale, County of Los Angeles, State of California more particularly described in Exhibit A attached hereto and by this reference made a part hereof (hereafter referred to as the “Subject Property”);

(b) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property (the “Improvements”);

(c) all tenements, hereditaments, appurtenances, privileges, franchises and other rights Affordable Housing Agreement Agreement No. A-7950
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and interests now or in the future benefiting or otherwise relating to the Subject Property or the Improvements, including easements, rights -of-way and development rights (the “Appurtenances”). (The Appurtenances, together with the Subject Property and the Improvements, are hereafter referred to as the “Real Property”);

(d) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the owner ship, use, management, operation leasing or occupancy of the Trust Estate, including those past due and unpaid;

(e) all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code (the “UCC”), and whether existing now or in the future) now or in the future located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks, heating ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property, but not including personal property that is donated to Trustor (the “Goods,” and together with the Real Property, the “Property”); and

(f) all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and docume nts (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occup ancy, sale or financing of the P roperty or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings (if any), (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects (if any), engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnit ies and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims , demands, awards, settlements and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injur y or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, Affordable Housing Agreement Agreement No. A-7950
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refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rig hts to the payment of money, trade names, trademarks, goodwill and all other types of intangible personal property of any kind or nature and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property (the “Intangibles”).

Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estate described above in which a security interest may be created under the UCC (collectively, the “ Personal Property ”). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary.

Trustee and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and remedies of a “secured party” under the UCC and other applicable California law.

Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c) and 9604 of the UCC.

FOR THE PURPOSE OF SECURING , in such order of priority as Beneficiary may elect, the following:

(1) due, prompt and complete observance, performance and discharge of each and every condition, obligation, covenant and agreement contained herein or contained in the following:

(a) a promissory note in the original principal amount of $1,200,000, executed by Trustor of even date herewith (the “Authority Note”);

(b) the Affordable Housing Agreement dated as of July 13, 2022 (the “Agreement”), between Trustor and Beneficiary;

(c) the Agreement Containing Covenants (including rental restrictions) between Trustor and Beneficiary, recorded concurrently herewith (the “Agreement Containing Covenants”); and

(2) payment of indebtedness of Trustor to Beneficiary in the principal sum of $1,200,000 or so much thereof as shall be advanced, evidenced by the Authority Note, with interest, according to the terms of the Authority Note.

The Agreement, including all a ttachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including the Authority Loan Documents described in the Agreement (collectively referred to as the “Secured Obli gations”) and all of their terms are incorporated herein by reference, and this conveyance secures any and all extensions, amendments, Affordable Housing Agreement Agreement No. A-7950
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modifications or renewals thereof however evidenced, and additional advances evidenced by any note reciting that it is se cured hereby. Any capitalized term that is not otherwise defined in this Deed of Trust has the meaning ascribed to such term in the Agreement.

AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:

1. That Trustor shall pay the Authority Note at the time and in the manner provided therein, and perform the obligations of Trustor as set forth in the Secured Obligations at the time and in the manner respectively provided therein;

2. That Trustor shall not permit or suffer the use of any of the Property for any purpose other than the uses permitted by the Agreement and the Agreement Containing Covenants;

3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable. Any cure periods set forth in the Secured Obligations shall run concurrently with any cure period(s) in this Deed of Trust;

4. That all rents, profits and income from the Trust Estate are hereby assigned to Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period, to collect such rents, profits and income for use in accordance with the provisions of the Agreement;

5. That upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Trust Estate and operate same and collect the rents, profits and income therefrom.

Any cure periods set forth in the Secured Obligations shall run concurrently with any cure period(s) in this Deed of Trust;

6. That Trustor shall keep the I mprovements hereafter constructed on the Subject Property in accordance with the Agreement insured against loss by fire and such other hazards, casualties, and contingencies as may reasonably be required in writing from time to time by Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies. In no event shall the amounts of coverage be less than one- hundred percent of the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause with loss payable to Beneficiary and certificates thereof together with copies of original policies shall be deposited with Beneficiary;
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7. To pay, at least ten ( 10) days before delinquency, any taxes and assessments affecting the Property, to pay, when due, all encumbrances, charges and liens, with interest, on the Property or any part thereof which appear to be prior or superior hereto and to pay all costs, fees and expenses of this Deed of Trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so l ong as Trustor is contesting the legality thereof in good faith and by appropriate proceedings and Trustor has adequate funds immediately available to pay any liabilities contested pursuant to this Paragraph 7;

8. To keep the Property in good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings 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 a nd materials furnished therefor, to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon (subject to Trustor’s right to contest the validity or applicability of laws or regulations), not to commit or permit waste thereof, not to commit, suffer or permit any act upon the Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property and not to permit or suffer any m aterial alteration of or addition to the buildings or improvements hereafter constructed in or upon the Property without the consent of Beneficiary;

9. 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 reasonable attorneys’ fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear;

10. Should Trustor fail, after the giving of notice and the expiration of any applicable cure period, to make any payment or do any act as herein provided, then Beneficiary or 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 in such manner and to such extent as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, may 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, may pay nec essary expenses, employ counsel and pay its reasonable fees. Notwithstan ding the foregoing, in the event of default under this Deed of Trust, Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary shall specify in writing the particular records that must be maintained and the information or reports that must be submitted;

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11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by Beneficiary shall be added to the principal sum secured hereby;

12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Authority Note;

13. That the funds to be advanced hereunder are to be used in accordance with the Secured Obligations and upon the failure of Trustor, after the giving of notice and the expiration of any applicable cure period, to keep and perfor m all the covenants, conditions and agreements of said agreements, the principal sum and all arrears of interest, and other charges provided for in the Authority Note shall at the option of Beneficiary of this Deed of Trust become due and payable, anything contained herein to the contrary notwithstanding;

14. Trustor further covenants that it shall not voluntarily create, suffer or permit to be created against the property subject to this Deed of Trust any lien or liens except as permitted by the Secured Obligations or otherwise approv ed by Beneficiary, and further that it shall keep and maintain the Property free from the claims of all persons supplying labor or materials which shall enter into the construction of any and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting, provided that Trustor shall , at Beneficiary’s written request, within thirty (30) days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary first provide a written request, prior to foreclosure) record in the official records of Los Angeles County, California, a surety bond in an amount one -and-one-half times the amount of such claim item in order to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary;

15. That any and all I mprovements made or about to be made upon the premises covered by the Deed of Trust, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgated, now or hereafter, by lawful authority, and that the same shall upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office; and

16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of Beneficiary a reasonable charge for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2 Title 14, Division 3, of the California Civil Code.

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IT IS MUTUALLY AGREED THAT:

17. Should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, then Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage. A ll such compensation, awards, damages, rights of action and proceeds which are not used to reconstr uct, restore or otherwise improve the Property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting the Property, are hereby assigned to Beneficiary. After deducting therefrom all its expe nses, including attorney s’ fees, the balance of the proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, shall be applied to the amount due under the Authority Note secured hereby. No amount applied to the reduction of the principal shall relieve Trustor from making regular payments as required by the Authority Note;

18. Upon default by Trustor in making any payments provided for in the Authority Note secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the Secured Obligations, and if such default is not cured within the respective time provided therefor in this Deed of Trust, 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 the property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may fore close this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the Authority Note and all documents evidencing expenditures secured hereby;

19. Intentionally Omitted;

20. After the lapse of such time as may then be required by law following the recordation of a notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the 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 a ll or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by p ublic announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive Affordable Housing Agreement Agreement No. A-7950
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proof of the truthfulness thereof . Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. Trustee shall apply the proceeds of sale to pay ment of (i ) the expenses of such sale, together with the reasonable expenses of this Deed of Trust including therein reasonable Trustee’s fees or attorney s’ fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale, (ii) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee’s deed, (iii) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Authority Note, (iv) all other sums then secured hereby and (v) the remainder, if any, to the person or persons legally entitled thereto;

21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee;

22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law;

23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied or the terms have expired, as applicable, and upon surrender of this Deed of Trust and the Authority Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto”;

24. The trust created hereby is irrevocable by Trustor;

25. This Deed of Trust 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 include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Authority Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint and several;

26. Trustee accepts this Deed of Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law , Affordable Housing Agreement Agreement No. A-7950
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Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee . Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon Trustee herein and by applicable law;

27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this Deed of Trust;

28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such lea ses and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary;

29. Trustor agrees that the loan secured by this Deed of Trust is made expressly for the purpose of affordable housing as set forth in the Secured Obligations;

30. Trustor agrees that, except as otherwise provided in the Authority Note , upon sale or refinancing of the Property or any part thereof, the entire principal balance of the debt secured by this Deed of Trust , plus any accrued but unpaid interest thereon, shall at the option of Beneficiary be immediately due and payable;

31. Intentionally Omitted;

32. Intentionally Omitted;

33. If the rights and liens created by this Deed of Trust are held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations, then the unsecured portion of such obligations shall be completely performed and paid prior to the performance and payment of the remaining and secured portion of the obligations, and all performance and payments made by Trustor shall be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations;

34. (a) Failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under this Deed of Trust.

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(b) Beneficiary shall give written notice of default to Trustor, specifying the default complained of by Beneficiary. Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.

(c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

(d) If a monetary event of default occurs, then prior to exercising any remedies hereunder, Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of thirty (30) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary.

(e) If a non- monetary event of default occurs, then prior to exercising any remedies hereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty ( 30) days, then Trustor shall have such period to effect a cure prior to exercise of remedies by Beneficiary. If the default is such that it is not reasonably capable o f being cured within aid 30- day period, and Trustor (i) initiates corre ctive action within said period and (ii) diligently, continually and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. If Trustor fails to take corrective action or cure the default within a reasonable time, then Beneficiary shall give Trustor notice thereof, who shall effect a cure within a reasonable time thereafter in accordance with the foregoing provisions. In no event shall Beneficiary be precluded from exercising remedi es if its rights become or are about to become materially jeopardized by an y failure to cure a default or if the default is not cured within ninety (90) days after the first notice of default is given.

(f) Except as otherwise may be required in order to comply with the provisions of California Civil Code Section 2924 et seq., any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission, any notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S.

Postal Service), shall be deemed received on the documented date of receipt by Trustor and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof.

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35. This Deed of Trust may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year set forth above.

“TRUSTOR”

SOS CHILDREN’S VILLAGES CALIFORNIA, INC., a
nonprofit public benefit corporation

By: ___________________________________
Anna Levin
Secretary

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California )
County of _____________________ )

On ____________________, before me, ____________________________, a Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their 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 _____________________________

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EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALMDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 24, IN SECTION 30, TOWNSHIP 6 NORTH, RANGE 11 WEST, SAN BERNARDINO

BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY OF

SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT IN THE CITY OF

PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP

SHOWING A PORTION OF THE LANDS OF THE PALMDALE COLONY COMPANY, IN BOOK 52 PAGE(S) 71, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN/Parcel ID(s): 3018-026-001

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PROMISSORY NOTE

SECURED BY DEED OF TRUST

TO HOUSING AUTHORITY OF THE CITY OF PALMDALE
(A-7950)

0% Palmdale, California $1,200,000 _________, 2022

FOR VALUE RECEIVED, SOS CHILDREN’S VILLA GES CALIFORNIA, INC. , a nonprofit public benefit corporation (“Borrower”), hereby promises to pay to the HOUSING AUTHORITY OF THE CIT Y OF PALMDALE , a public body corporate and politic (“Authority”), or order, a principal amount of One Million Two Hundred Thousand Dollars ($1,200,000), or so much thereof as may be advanced by Authority to Borrower as the Authority Loan pursuant to the Affordable Housing Agreement dated as of July 13, 2022 (the “Agreement”) by and between Borrower (“Developer ” therein) and Authority, incorporated herein by this reference. Borrower shall pay interest at the rate, in the amount and at the time hereinafter provided.

Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Agreement. In addition, the following terms shall have the following meanings:

“Default Rate of Interest” means 1% over the Prime Rate announced by Bank of America.

“Note” means this promissory note evidencing the Authority Loan.

1. This Note evidences the obligation of Borrower to Authority for the repayment of the Authority Loan.

2. This Note is payable at the principal office of Authority , 38250 Sierra Highway, Palmdale, California 93550, or at such other place as the holder hereof may inform Borrower in writing, in lawful money of the United States.

3. This Note is secured by the Authority Deed of Trust.

4. This Note shall bear s imple interest at the rate of zero percent (0%) per annum except in the event of default under any of the Authority Loan Documents which has not been cured in the time provided in the applicable Authority Loan Document , in which case the Authority Loan sha ll bear simple interest at the Default Rate of Interest from the date of the expiration of the cure period for such default.

5. Until the Maturity Date, there are no scheduled payments and no payments shall be Affordable Housing Agreement Agreement No. A-7950
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due and payable under this Note. The principal balance of the Authority Loan and all accrued and unpaid interest shall be due and payable on the Maturity Date. “Maturity Date” means the earliest to occur of:

(a) ________, 2077 (55 years from the date of this Note);

(b) The date the Property, the Project, or any portion thereof or interest therein is sold, transferred, assigned, encumbered with a mortgage or deed of trust, or refinanced, without the prior written approval of the City;

(c) The date of a default by t he Borrower under the terms of this Note or any of the other Authority Loan Document which is not cured or waived within the respective time period provided herein or therein; or

(d) The termination of the Agreement.

6. Any cure periods under the Authority Loan Documents and this Note in the event a default shall run concurrently.

7. All payments to the Authority shall be applied first to interest, then to reduce the principal amount owed.

8. The Authority Loan is funded from the Authority’s Low and Moderate Income Housing Asset Fund. Accordingly, Borrower ag rees for itself, its successors and assigns that the use of the Property shall be subject to the restrictions on rent and occupancy set forth in the Agreement Containing Covenants.

9. Borrower waives presentment for payment, demand, protest and notices of dishonor and of protest, the benefits of all waivable exemptions and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower hereby agrees to pay all costs and expenses, including reasona ble attorneys’ fees, which may be incurred by the holder hereof, in the enforcement of this Note, the Authority Deed of Trust or any term or provision of either.

10. Failure or delay by Borrower to perform any material term or provision of this Note constitutes a default under this Note.

11. (a) Authority shall give written notice of default to Borrower, specifying the default complained of by Authority . Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.

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(b) Any failures or delays by Authority in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by Authority in asserting any of its rights and remedies shall not deprive Authority 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.

(c) If a monetary event of default occurs, prior to exercising any remedies hereunder, then Authority shall give Borrower written notice of such default. Borrower shall have a period of ten (10) calendar days after such notice is received or deemed received within which to cure the default prior to exercise of remedies by Authority.

(d) If a non- monetary event of default occurs, then prior to exercising any remedies hereunder, Authority shall give Borrower notice of such defaul t. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, then Borrower shall have such period to effect a cure prior to exercise of remedies by Authority. If the default is such that it is not reasonably capable of being cured within said 30-day period, and Borrower (i) initiates corre ctive action within said period and (ii ) diligently, continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Authority, but in no event shall such period exceed sixty (60) days from the date such notice is received or deemed received. In no event sh all Authority be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default.

(f) A notice of default shall be deemed given only if either (i) dispatched by first class mail, registered or certified, postage prepaid, return rec eipt requested, to the address specified for Borrower in Section 15 below or (ii) by personal delivery (including by means of professional messenger or courier service such as United Parcel Service or Federal Express) to the address specified for Borrower in Section 15 below. Receipt shall be deemed to have occurred on the earlier of (i) the date of successfully completed electronic facsimile transmission (if followed by delivery of a “hard” copy) or (ii) the date marked on a written postal service or messenger or courier service receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). If Borrower gives notice of a change of address in the manner specified in this paragraph, then all notices, demands and communications originated after receipt of the change of address (or the effective date specified in the notice of change of address, if later) shall be transmitted, delivered or sent to the new address.

12. If the rights created by this Note are held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, then the remaining obligations must be completely performed and paid.

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13. Borrower shall have the right to prepay the obligation evidenced by this Note, or any part thereof, without penalty, but any such repayment shall nor relieve the Property from the burden of the Agreement Containing Covenants or the Authority Deed of Trust.

14. Subject to the provisions and limitations of this Section 14, the obligation to repay the Authority Loan is a nonrecourse obligation of Borrower. Borrower shall not have any personal liability for repayment of the Authority Loan, except as provided in thi s Note. The sole recourse of Authority shall be the exercise of its rights against the Property and any related security for the Authority Loan; provided, however, that the foregoing shall not (i) constitute a waiver of any obligation evidenced by the Aut hority Note or the Authority Deed of Trust, (ii) limit the right of Authority to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under the Authority Note or the Authority Deed of Trust or any action or proceeding thereunder so long as no judgment in the nature of a deficiency judgment shall be asked for or taken against Borrower, (iii) release or impair the Authority Note or the Authority Deed of Trust, (iv) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, any other remedy against the mortgaged Property or any other instrument securing the Authority Note or as prescribed by law or in equity in case of default, (v) prevent or in any way hinder Authority from exercising, or constitute a defense, an affirmative defense, a counterclaim, or other basis for relief in respect of the exercise of, its remedies in respect of any deposits, insurance p roceeds, condemnation awards or other monies or other collateral or letters of credit securing the Authority Note, (vi) relieve Borrower of any of its obligations under any indemnity delivered by Borrower to Authority or (vii) affect in any way the validity of any guarantee or indemnity from any person of all or any of the obligations evidenced and secured by the Authority Note or the Authority Deed of Trust. Notwithstanding the first sentence of this paragraph, Authority may recover directly from Borrower or from any other party:

(a) any damages, costs and expenses incurred by Authority as a result of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or employee of Borrower, or of any member or general or limited partner of Borrower, or of any member or general or limited partner of such member or general or limited partner;

(b) any damages, costs and expenses incurred by Authority as a result of any misappropriation of funds provided for the acquisition of the Property, development and construction of the Project, rents and revenues from the operation of the Project or proceeds of insurance policies or condemnation proceeds;

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(c) any and all amounts owing by Borrower pursuant to the indemnification regarding Hazardous Subst ances given in the Environmental Indemnity; and

(d) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions.

15. The address of Borrower for purposes of receiving notices pursuant to this Note is as follows: 8484 Wilshire Boulevard, Suite 500, Beverly Hills, CA 90211-2404.

IN WITNESS WHEREOF , Borrower has executed this Note as of the day and year set forth above.

“BORROWER”

SOS CHILDREN’S VILLA GES CALIFORNIA,
INC., a nonprofit public benefit corporation

By: ___________________________________
Anna Levin
Secretary
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06.30.22 ENVIRONMENTAL INDEMNITY BY
SOS CHILDREN’S VILLAGES CALIFORNIA, INC. IN FAVOR OF HOUSING

AUTHORITY OF THE CITY OF PALMDALE
(A-7950)

THIS ENVIRONMENTAL INDEMNITY ( this “Indemnity”), dated as of _________, 2022, is made by SOS CHILDREN’S VILLAGES CALIFORNIA, INC., a nonprofit public benefit corporation (“Borrower”), whose address for purposes of giving notice is 8484 Wilshire Boulevard, Suite 500, Beverly Hills, CA 90211- 2404, Attn: Anna Levin, CPA, in favor of the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body corporate and politic (“Authority”), whose address for purposes of giving notice is 38250 Sierra Highway, Palmdale, California 93550-4611.

WITNESSETH

WHEREAS, Borrower is the owner of that certain real property in the City of Palmdale, as more particularly described on Exhibit A attached hereto and made a part hereof (the “Property”);

WHEREAS, the Parties entered into an Affordable Housing Agreement, dated as of July 13, 2022 (the “Agreement”), pursuant to which Authority agreed to make a loan to Borrower for the purpose of acquiring the Property and developing and constructing the Project on the Property; and

WHEREAS, Borrower has agreed to execute and deliver to Authority this Indemnity in order to induce Authority to make the Authority Loan.

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual agreements hereinafter set forth, Borrower hereby agrees as follows:

1. ADDITIONAL DEFINITIONS

For the purpose of this Indemnity, “ Hazardous Materials ” shall include, without limitation, substances defined as “extremely hazardous substances ”, “hazardous substances ”, “hazardous materials ”, “hazardous waste or “ toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.

Sections 9601-9675, the Federal Hazardous Materials Transportation Law, 49 U.S.C.

Sections 5101, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq. and those substances defined as “hazardous waste” in Section 25117 of the California Health and Safety Code, as “extremely hazardous waste ” in Section 25115 of the California Health and Safety Code or as “hazardous substances” in Section 25316 of the California Health and Safety Code or “hazardous materials” as defined in Section 353 of the California Vehicle Code, and in Affordable Housing Agreement Agreement No. A-7950
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06.30.22 the regulations adopted and publications promulgated pursuant to said laws. Other capitalized terms used in this Indemnity shall have the meanings ascribed to them in the Agreement.

2. COVENANTS AND INDEMNITY

The following covenants and indemnities are hereby given and made by Borrower:

2.1 Covenants.

(a) Borrower covenants that it shall comply with any and all laws, regulations, and/or orders which may be promulgated, from time to time, with respect to the discharge and/or removal of Hazardous Materials, to pay immediately when due the costs of the removal of, or any other action required by law with respect to, any such Hazardous Materials from the Property, and to keep the Property free of any lien imposed pursuant to any such laws, regulations or orders.

(b) Borrower covenants that the Property shall not be used for any activities involving, directly or indirectly, the use, generation, treatment, storage, release or disposal of any Hazardous Materials, except for de minimis quantities used at the Property in compliance with all applicable environmental laws and required in connection with the routine construction, operation and maintenance of the Property.

(c) Borrower further agrees that Borrower shall not release or dispose of any Hazardous Materials at the Property without the express written approval of Authority and that any such release or disposal shall be effected in strict compliance with all applicable laws and all conditions, if any, established by Authority.

(d) Authority shall have the right, at any time, to conduct an environmental audit (“Environmental Audit ”) of the Property at Authority ’s expense, unless Hazardous Materials are found, then at Borrower ’s sole cost and expense, and Borrower shall cooperate in the conduct of any such environmental audit. Other than in an emergency, such audit shall be conducted only after thirty (30) days prior written notice has been given to Borrower and only in the presence of a representative of Borrower. Borrower shall give Authority and its agents and employees access to the Property to remove, or otherwise to mitigate against the effects of, Hazardous Materials. The term Environment Audit as used herein shall mean and refer to a Phase I environmental site assessment or such other environmental audit or review as may be reasonably requested or required by the Authority.

(e) Borrower shall not install, or permit to be installed, on the Property friable asbestos or any substance containing asbestos and deemed hazardous by federal or state regulations respecting such material, and, with respect to any such material currently present at the Property, Borrower shall promptly either (i) remove or cause to be removed any material that such regulations deem hazardous and require to be removed or (ii) otherwise comply with such federal Affordable Housing Agreement Agreement No. A-7950
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06.30.22 and state regulations, at Borrower's sole cost and expense . If Borrower shall fail to so do within the cure period permitted under applicable law, regulation, or order, then Authority may do whatever is necessary to eliminate said substances from the premises or to otherwise comply with the applicable law, regulation or order, and the costs thereof shall be added to the Obligations of Borrower under this Section 2.

(f) Borrower shall immediately advise Authority in writing of any of the following: (i) any pending or threatened environmental claim against Borrower or otherwise related to the Property, (ii) any condition or occurrence on the Property that (A) results in noncom- pliance by Borrower with any applicable environmental law, (B) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any environmental law or (C) could reasonably be anticipated to form the basis of an envi ronmental claim against the Property or Borrower related to the Property.

2.2 Indemnity. Borrower shall indemnify, protect and hold Authority harmless from and against any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedi ngs, costs, disbursements or expenses (including, without limitation, attorneys’ and experts’ fees and disbursements) of any kind or of any nature whatsoever (collectively, the “ Obligations”) which may at any time be imposed upon, incurred by or asserted or awarded against Authority and arising from or out of:

(a) The presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or any surrounding areas;

(b) The breach of any covenant made by Borrower in Section 2.1 hereof; or

(c) The enforcement by Authority of any of the provisions of this Section 2.2 or the assertion by Borrower of any defense to its obligations here under. Subject to the qualifications set forth in Section 2.3 below, Borrower shall be liable for payment and performance of the Obligations to the full extent ( but only to the extent) of the P roperty and assets which constitute security for such Obligations. If default occurs in the timely and proper payment and performance of any such Obligations, then any judicial proceedings brought by Authority against Borrower shall be limited to the protection and preservation of the Property, the preservation, enforcement and foreclosure of the liens, mortgages, assignments, rights and security interests securing such Obligations and enforcement and collection of such Obligations for which Borrower remains directly liable. If there is a foreclosure of any such liens, mortgages, assignments, rights and security interests by power of sale or otherwise, then no personal judgment for any deficiency thereon shall be sought or obtained by Authority against Borrower, or its officers, directors, agents, attorneys, servants or employees.

2.3 Exceptions to Non-Recourse Liability. Notwithstanding the foregoing:

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06.30.22 (a) Authority may proceed against any other person or entity whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or similar rights to payment or performance; and

(b) Authority may recover personally from any person or entity:

(1) any damages, costs and expenses incurred by Authority as a result of the negligence of such person or entity, involving, directly or indirectly, the use, generati on, treatment, storage, release or disposal of any Hazardous Materials by such person or entity or by others; provided, however, that neither Borrower nor any officer, director, agent, attorney, servant or employee of Borrower shall have any personal liability if the act or omission complained of was performed in good faith and was not reckless, wanton, intentional or grossly negligent;

(2) any damages, costs and expenses incurred by Authority as a result of fraud or any criminal act or acts of Borrower or any partner, shareholder, officer, director or employee of Borrower, or of any general partner of Borrower relating to the use, generati on, treatment, storage, release or disposal of any Hazardous Materials; and

(3) all court costs and attorneys ’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions.

3. BORROWER’S UNCONDITIONAL OBLIGATIONS

3.1 Unconditional Obligations. Borrower hereby agrees that the Obligations shall be paid and performed strictly in accordance with the terms of this Indemnity, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of the Authority Loan Documents or affecting any of the rights of Authority with respect thereto. The obligations of Borrower hereunder shall be absolute and unconditional irrespective of:

(a) The validity, regularity, or enforceability of the Authority Loan Documents or any other instrument or document executed or delivered in connection therewith;

(b) Any alteration, amendment, mod ification, release, termination or cancellation of any of the Authority Loan Documents, or any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the obligations of Borrower contained in any of the Authority Loan Documents;

(c) Any extension of the maturity of the Authority Loan or any waiver of, or consent to any departure from, any provision contained in any of the Authority Loan Documents; Affordable Housing Agreement Agreement No. A-7950
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06.30.22 (d) Any exculpatory provision in any of the Authority Loan Documents limiting Authority’s recourse to property encumbered by the Authority Deed of Trust, or to any other security, or limiting Authority’s rights to a deficiency judgment against Borrower;

(e) Any exchange, addition, subordination, or release of, or nonperfection of any lien on or security interest in, any collateral for the Authority Loan, or any release, amendment, waiver of, or consent to any departure from any provision of, any other Borrowe r or guarantee given in respect of the Authority Loan;

(f) The insolvency or bankruptcy of Borrower or of any indemnitor or guarantor under any other indemnity or guarantee given in respect of the Authority Loan; or

(g) Any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower or any other indemnitor or guarantor with respect to the Authority Loan or any or all of the Obligations.

3.2 Continuation. This Indemnity (i) is a continuing indemnity and shall remain in full force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Authority Loan, the release or other extinguishment of the Authority Loan or any security for the Authority Loan) and (ii) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by Authority upon the insolvency, bankruptc y or reorganization of Borrower, or otherwise, all as though such payment had not been made.

3.3 Termination. Notwithstanding the payment (and performance) in full of all of the Obligations and the payment (or performa nce) in full of all of Borrower’s obligations under the Authority Loan Documents, this Indemnity shall not terminate if any of the following shall have occurred:

(a) Authority has at any time or in any manner participated in the management or control of, taken possession of (whether personally, by agent or by appointment of a rec eiver), or taken title to the Property or any portion thereof, whether by foreclosure, deed in lieu of foreclosure, sale under power of sale or otherwise; or

(b) There has been a change, between the date hereof and the date on which all of the Obligations are paid and performed in full, in any Hazardous Materials laws, the effect of which may be to make a lender or mortgagee liable in respect of any of the Obligations, notwithstanding the fact that no event, circumstance or condition of the nature describe d in paragraph (a) above ever occurred.

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06.30.22 4. WAIVER

Borrower hereby waives the following:

(a) Promptness and diligence;

(b) Notice of acceptance and notice of the incurrence of any obligation by Borrower;

(c) Notice of any action taken by Authority, Borrower, or any other interested party under any Authority Loan Document or under any other agreement or instrument relating thereto;

(d) All other notices, demands, and protests, and all other formalities of every kind, in connection with the enforcement of the Obligations, the omission of or delay in which, but for the provisions of this Section 4, might constitute grounds for relieving Borrower of its Obligations hereunder;

(e) The right to a trial by jury with respect to any dispute arising under, or relating to, this Indemnity;

(f) Any requirement that Authority protect, secure, perfect or insure any security interest or lien in or on any property subject thereto;

(g) Any requirement that Authority exhaust any right or take any action against Borrower or any other person or collateral; and

(h) Any defense that may arise by reason of:

(1) The incapacity, lack of authority, death or disability of, or revocation hereof by, any person or persons;

(2) The failure of Authority to file or enforce any claim against th e estate (in probate, bankruptcy or any other proceedings) of any person or persons; or

(3) Any defense based upon an election of remedies by Authority, including, without limitation, an election to proceed by nonjudicial foreclosure or which destroys or otherwise impairs the subrogation rights of Borrower or any other right of Authority to proceed against Borrower.

5. NOTICES
Any notice, demand, statement, request or consent made hereunder shall be in writing and shall be personally served, mailed by first-class registered or certified mail, postage prepaid, return Affordable Housing Agreement Agreement No. A-7950
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06.30.22 receipt requested, to the address set forth in the first paragraph of this Indemnity , above, of the Party to whom such notice is to be given (or to such other address as the Parties, shall designate in writing):

Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard ” copy, shall be deemed delivered upon its transmission, any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof.

6. MISCELLANEOUS

6.1 Borrower shall make any payment required to be made hereunder in lawful money of the United States of America, and in same day funds, to Authority at its address specified in the first paragraph hereof.

6.2 No amendment of any provision of this Indemnity shall be effective unless it is in writing and signed by the Parties, and no waiver of any provision of this Indemnity, and no consent to any departure by Borrower from any provision of this Indemnity, shall be effective unless it is in writing and signed by Authority, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

6.3 No failure on the part of Authority to exercise, and no delay in exercising, any right hereunder or under any other Authority Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of Authority provided herein and in the other Authority Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of Authority under any Authority Loan Document against any party thereto are not conditional or contingent on any attempt by Authority to exercise any of its rights under any other Authority Loan Document against such party or against any other person or collateral.

6.4 Any provision of this Indemnity that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction.

6.5 This Indemnity shall (i) be binding upon Borrower and Borrower’s successors and assigns and (ii) inure, together with all rights and remedies of Authority hereunder, to the benefit of Authority, its directors, officers, employees and agents, any successors to Authority ’s interest in the Property, any other person who acquires any portion of the Property at a foreclosure sale or Affordable Housing Agreement Agreement No. A-7950
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06.30.22 otherwise through the exercise of Authority ’s rights and remedies under the Authority Loan Documents, any successors to any such person, and all directors, o fficers, employees and agents of all of the aforementioned parties . Without limiting the generality of clause (ii ) of the immediately preceding sentence, Authority may, subject to, and in accordance with, the provisions of the Authority Loan Documents, assign or otherwise transfer all or any portion of its rights and obligations under any other Authority Loan Document, to any other person, and such other person shall thereupon become vested with all of t he rights and obligations in respect thereof that were granted to Authority herein or otherwise. None of the rights or obligations of Borrower hereunder may be assigned or otherwise transferred without the prior written consent of Authority.

6.6 Borrower hereby (i ) irrevocably submits to the jurisdiction of any California or federal court sitting, in each instance, in Los Angeles County in any action or proceeding arising out of or relating to this Indemnity, (ii) waives any defense based on doctrines of venue or forum non conveniens or similar rules or doctrines and (iii) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such California or federal court.

Borrower irrevocably consents to the ser vice of any and all process which may be required or permitted in any such action or proceeding to the address specified in the first paragraph of this Indemnity, above. Borrower agrees that a final judgment in any such action or proceeding, subject to Borrower’s right to appeal, shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law.

6.7 The title of this Indemnity and the captions used herein are inserted only as a matter of convenience and for reference and shall in no way define, limit or describe the scope or the intent of this Indemnity or any of the provisions hereof.

6.8 This Indemnity shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California applicable to contracts made and to be performed therein, except to the extent that the laws of the United States preempt the laws of the State of California.

6.9 This Indemnity contains all of the agreements and understanding of the Parties concerning the subject matter hereof. Furthermore, this Indemnity supersedes and revokes all previous communications, negotiations, and agreements, whether oral or written, between the Parties with respect to the subject matter of this Indemnity. No addition, modification, or deletion of or to this Indemnity or any waiver of any of its provisions shall be binding on either Party unless made in writing and executed by the Parties.

6.10 This Indemnity may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute but one and the same instrument.

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IN WITNESS WHEREOF, the Parties have executed this Indemnity as of the date first set forth above.

“AUTHORITY”

HOUSING AUTHORITY OF THE CITY OF
PALMDALE, a public body, corporate and
politic

By:__________________________________
Ronda Perez
Executive Director

ATTEST:

By: _________________________________
Shanae Smith
Authority Secretary

APPROVED AS TO FORM:

By:_________________________________
Scott E. Porter
Acting Authority Counsel

KANE, BALLMER & BERKMAN
Authority Special Counsel

By: ________________________________

“BORROWER”

SOS CHILDREN’S VILLAGES
CALIFORNIA, INC.,
a nonprofit public benefit
corporation

By: ___________________________________
Anna Levin
Secretary

Affordable Housing Agreement Agreement No. A-7950
SOS Children’s Villages California, Inc. APN: 3018-026-001 Attachment No. 8 Environmental Indemnity Exhibit A – Legal Description

EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALMDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 24, IN SECTION 30, TOWNSHIP 6 NORTH, RANGE 11 WEST, SAN BERNARDINO

BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY OF

SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT IN THE CITY OF

PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP

SHOWING A PORTION OF THE LANDS OF THE PALMDALE COLONY COMPANY, IN BOOK 52 PAGE(S) 71, OF MISCELLANEOUS RECOR DS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN/Parcel ID(s): 3018-026-001

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Recording Requested by
and When Recorded Return to:

City Clerk, City of Palmdale
38300 Sierra Highway, Suite C
Palmdale, California 93550-4611

SPACE ABOVE THIS LINE FOR RECORDER’S USE

GOVERNMENT BUSINESS
Free Recording
(Cal. Govt. Code §27383)

SOS Children’s Villages California, Inc. Agreement No. A-7950 APN: 3008-013-903

Notice of Affordability Restrictions on Transfer of Property

NOTICE IS HEREBY GIVEN that pursuant to California Health and Safety Code Section 33334.3(f), the Housing Authority of the City of Palmdale , a public body corporate and politic, is recording this Notice of Affordability Restrictions on Transfer of Property (this “Notice”) with regard to the property located at 30th Street East and adjacent to McAdam Park in the City of Palmdale, California and more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”).

The Property is subject to the Agreement Containing Covenants (the “Covenants”) recorded concurrently herewith, which restricts the use of the Property as follows:

Exclusively to develop, construct, and operate the Project which shall include the following: (i) twelve (12) 3 -bedroom residential units as affordable housing for foster care youth with up to 6 foster youth s in each such three-bedroom unit (except that at any time one unit may have one child of a resource caregiver and up to 5 foster youths) , with one (1) such residential unit to be made affordable to a Low Income Affordable Housing Agreement Agreement No. A-7950
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household at an Affordable Rent and eleven (11) such residential units to be made affordable to Extremely Low Income households at an Affordable Rent, and (ii) two (2) units of transitional housing used to support the overall foster care program on the Property with both of the transitional units to be made affordable to Very Low Income households at an Affordable Rent, all as provided in the Covenants.

Each of the 12 foster youth units shall have an adjacent reso urce caregiver unit used by a resource caregiver providing support and caregiving 24 hours a day/7 days a week to the foster youth living in the adjacent foster youth unit.

The income and affordability levels of the fourteen (14) affordable units shall be allocated as follows:

i. One (1) 3 -bedroom foster youth residential unit shall be made available as transitional housing exclusively to Low Income foster youth at an Affordable Rent as provided in California Health and Safety Code Section 50053 (an
“Affordable Rent”);

ii. Eleven (11) 3-bedroom foster youth residential units shall be made available as transitional housing exclusively to Extremely Low Income foster youth at an Affordable
Rent; and

iii. Two (2) residential units which support the overall foster care program on the Property shall be made available as transitional housing exclusively to Very Low Income
households at an Affordable Rent.

The affordability restrictions imposed on the Property by the Covenants are scheduled to expire on the date that is 55 years after the recordation of this Notice. This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Covenants. This Notice may be executed in any Affordable Housing Agreement Agreement No. A-7950
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number of counterparts, each of which, when so executed and delivered, will be an original, but all of which together shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank; Signatures on Following Pages]

Affordable Housing Agreement Agreement No. A-7950
SOS Children’s Villages California, Inc. APN: 3018-026-001 Attachment No. 9 – Notice of Affordability Restrictions Page S-1

80501-00001/4406422.5

HOUSING AUTHORITY OF THE CITY OF
PALMDALE, a public body, corporate and politic

By: __________________________________
Ronda Perez
Executive Director

ATTEST:

By: _________________________________
Shanae Smith
Authority Secretary

APPROVED AS TO FORM:

By: _________________________________
Scott E. Porter
Acting Authority Counsel

KANE, BALLMER & BERKMAN
Authority Special Counsel

By: ________________________________
Affordable Housing Agreement Agreement No. A-7950
SOS Children’s Villages California, Inc. APN: 3018-026-001 Attachment No. 9 – Notice of Affordability Restrictions Page S-2

80501-00001/4406422.5

CONSENT TO RECORDATION
The undersigned, owner of the real property legally described in Exhibit A , hereby consents to the recordation of this Notice against the Property.

SOS CHILDREN’S VILLA GES
CALIFORNIA, INC., a nonprofit public
benefit corporation

By: ________________________________
Anna Levin
Secretary

Affordable Housing Agreement Agreement No. A-7950
SOS Children’s Villages California, Inc. Notice of Affordability Restrictions APN: 3018-026-001 Exhibit A – Legal Description

80501-00001/4406422.5

EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALMDALE,

COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 24, IN SECTION 30, TOWNSHIP 6 NORTH, RANGE 11 WEST, SAN BERNARDINO

BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT OF THE SURVEY OF

SAID LAND ON FILE IN THE BUREAU OF LAND MANAGEMENT IN THE CITY OF

PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP

SHOWING A PORTION OF THE LANDS OF THE PALMDALE COLONY COMPANY, IN BOOK 52 PAGE(S) 71, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN/Parcel ID(s): 3018-026-001

Affordable Housing Agreement Agreement No. A-7950
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06.30.22 80501-00001/4406299.4

SCHEDULE OF PERFORMANCE

1. Submittal - Basic Concept/Schematic
Drawings. The Developer will submit to the
Authority for approval the Basic
Concept/Schematic Drawings and related
documents (site plans, elevations and
preliminary floor plans).

Upon the e arlier to occur of the
following: (a) within 60 days after the
effective date of a zoning change to
permit development of the Project; or (b)
upon submittal of an application for City
approval of a Planned Development (PD)
document for the Property.

2. Approval - Basic Concept/Schematic
Drawings. The Authority will approve or
disapprove the Basic Concept/Schematic
Drawings and related documents.

Within thirty days after submittal by
Developer to the Authority.

3. Submittal - Management Plan, Maint enance
Plan and Maintenance Budget, and Operating
Budget. Developer will submit to the
Authority for approval the proposed
Management Plan, Maintenance Plan and
Maintenance Budget, and Operating Budget.

Not later than 45 days before the
commencement of construction of the
Project.

4. Execution of Affordable Housing Agreement
by the Authority. The Authority will consider
the Affordable Housing Agreement, and
authorize the Executive Director to execute
and deliver the Affordable Housing
Agreement to the Developer.

As soon as feasible after submission of
executed Agreement by Developer or
July 20, 2022.

5. Submittal – Final Construction Drawings and
Specifications. The Developer will prepare
and submit to the Authority for approval the
Final Constructio n Drawings and
Specifications suitable to submit for a
building permit application.

Not later than 180 days after the final
City approval of the Project Site Plan and
Planned Development (PD) document for
the Property.

6. Approval - Final Construction Dr awings and
Specifications. The Authority will approve or
disapprove the Final Construction Drawings
and Specifications.

Within fifteen (15) business days after
submittal to the Authority.

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7. Submittal - Evidence of Finan cing. The
Developer will submit to the Authority the
Evidence of Financing set forth in the Method
of Financing.

Within eighteen months after the date of
the Closing of the acquisition of the
Property.

8. Commencement of Construction . The
Developer will commence construction of the
Project on the Property.

Not later than the later to occur of the
following: (a) 6 months after the issuance
of the building permit for the Project; or
(b) 6 months after securing enforceable
pledges for 90% of the total private funds
for the Project, but in no event later than
May 1, 2024.

9. Completion of Construction . The Developer
will complete construction of the Project on
the Property.

Not later than 30 months after
commencement of construction.

10. Completion. Completion in accordance with
the definition on page 3 of the Affordable
Housing Agreement shall have occurred.

Not later than 36 months after
commencement of construction.

11. DCFS. The Developer will have received
agreements from the Los County Department
of Children and Family Servic es for all foster
youth residents.

Not later than 9 months after Completion.

NOTES:

1. Deadlines set forth in this Schedule of Performance are subject to the enforced delay provisions of Section 604 of the Agreement.

2. Extensions may be approved in writing pursuant to Section 309 of the Agreement.

3. Descriptions of items of performance and deadlines in this Schedule of Performance are not intended to supersede more complete descriptions in the text of the Agreement; and in the event of any conflict between the text of the Agreement and this Schedule, the text of the Agreement will govern.

Affordable Housing Agreement Agreement No. A-7950
SOS Children’s Villages California, Inc. APN: 3018-026-001 Attachment No. 11 – Method of Financing Page 1

06.30.22 80501-00001/4406300.3

METHOD OF FINANCING

This is the Method of Financing attached to the Affordable Housing Agreement (the “Agreement”) dated as of July 13, 2022, by and between the HOUSING AUTHORITY OF THE CITY OF PALMDALE , a public body corporate and politic (“Authority”), and SOS CHILDREN’S VILLAGES CALIFORNIA, INC., a nonpr ofit public benefit corporation (“Developer”).

The Project shall be financed by a combination of the Authority Loan (which shall consist of the Authority Acquisition Loan and the Authority Pre-Development Loan), the LACDA Loan, which is hereby approved by Authority subject to the delivery of the Subordination Agreement, and private funds donated to the Developer for the Project. Developer may utilize other financing sources approved in writing by the Authority Executive Director, so long as such alternative financing does not result in increased costs, risk, or liability to Authority.

The Authority Loan in the total principal amount of $1,200,000 consists of the following:
(i) the Authority Acquisition Loan in an original principal amount of $462,000 and (ii) the Authority Pre-Development Loan in an original principal amount of $737,500. The sum of the Authority Acquisition Loan and the Authority Pre-Development Loan shall not exceed $1,200,000 in the aggregate. The Authority Loan shall be repaid according to the terms and conditions of the Authority Note.

1. Definitions. Any capitalized term not otherwise defined herein has t he meaning ascribed to such term in the Agreement.

2. Total Costs. The P arties estimate that the total Project costs, including, without limitation, acquisition and development and construction, shall be approximately $19,010,000.

Developer shall be responsible to provide funds if and as needed to pay for cost overruns and contingencies not funded by the Authority Loan, the LACDA Loan , or private donations to Developer.

3. Project Budget. The Parties anticipate that all Project costs shall be as set forth in the Project Budget. The Project Budget shall be subject to change from time to time, subject to the prior written approval of the Authority Executive Director or designee (which approval shall not be unreasonably withheld) and subject to and conditioned on such further review and approval by the Authority Board as is needed to satisfy applicable law and Authority policies and procedures, upon which approval the Project Budget shall be replaced by the approved revised Project Budget. Developer shall demonstrate, to the satisfaction of the Authority Executive Director, that all Developer funds shall be available for payment of Project c osts when and as required by this Method of Financing.

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4. Authority Loan.

(a) In accordance with and subject to the terms and conditions of the Agreement and this Method of Financing, Authority agrees to make the Authority Loan of $1,200,000 to Developer, and Developer agrees to borrow such funds for the payment of Project costs.

(c) The Authority Loan shall be used exclusively to pay a portion of the acquisition cost for the Property and pre -development costs for the Project as identified in the Project Budget.

(e) At the Closing, the Parties shall execute and deliver such ins truments and documents as may be necessary to evidence and secure the Authority Loan consistent with the terms of the Agreement and this Method of Financing, and in a form that is acceptable to the Authority Executive Director or designee, including the following instruments:

(1) the Agreement Containing Covenants;

(2) the Notice of Affordability Restrictions;

(3) the Authority Note;

(4) the Authority Deed of Trust;

(5) the Assignment of Agreements;

(6) the Environmental Indemnity;

(7) the UCC1 Financing Statement (both recordable and to be filed with the Secretary of State); and

(8) A Subordination Agreement acceptable to the Authority in form and content subordinating the LACDA Loan and related LACDA Loan documents.
(f) Within the time set forth therefor in the Sch edule of Performance, Developer shall submit to the Authority, for the Authority Executive Director’s review and approval, evidence demonstrating to the satisfaction of the Authority Executive Director or designee the availability of sufficient funds to pay all Project costs (“Evidence of Financing”).

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5. Recordation. Upon the Closing , the Title Company shall record the Authority Loan Documents in accordance with instructions provided by Authority and shall be prepared to issue to Authority an ALTA lender ’s policy of title insurance, at Developer’s cost, insuring the priority of the Authority Deed of Trust as a first priority lien on the Property, in the amount of the Authority Loan and with endorsements as Authority may determine is appropriate.

6. Disbursement of Authority Loan.

(a) The Authority Acquisition Loan shall be deemed disbursed at the Closing to pay or reimburse a portion of the acquisition costs for the Property.

(b) The Authority Pre-Development Loan shall be disbursed based on invoices for actual third party costs, fees, or expenses incurred or paid . The Authority Pre-Development Loan may be disbursed from time to time, including at the Closing, to pay or reimburse a portion of the pre -development costs. Requests for payment must be submitted on forms specified by Authority, with adequate and proper documentation of eligible costs incurred. The Authority Pre- Development Loan shall be disbursed based upon Authority’s receipt of contractor invoices and other information and docum entation ( e.g., lien releases) requested or required by Authority .

Authority shall have the right to condition any disbursement upon receipt and approval of such documentation, evidence or information that it may request, including, without limitation, vouchers and invoices.

(c) Authority shall have the right in its sole discretion to make disbursements of funds directly to third parties entitled to such payment.

(d) Authority shall have the right to review and audit all records of Developer pertaining to any payment by Authority. Said records must be mai ntained for a period of five years after Completion.

7. Repayment Terms. The repayment terms of the Authority Loan are set forth in the form of Authority Note.

8. Conditions Precedent to Closing.

(a) The Closing is conditioned upon each of the following occurring to the satisfaction of the Authority Executive Director prior to the time for the Closing set forth in the Schedule of Performance:

(i) Developer submits to the Authority the Project Budget, current as of the Closing;
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(ii) Developer submits to the Authority evidence of the insurance policies and endorsements required by the Agreement;

(iii) Title Company is prepared to issue the Title Insurance Policies;

(iv) Developer duly executes and delivers to Authority or into escrow the Authority Loan Documents; and

(v) The Authority Executive Director determines that Developer is not in default of its obligations to Authority under the Agreement.

Notwithstanding the foregoing, Authority, in the sole discretion of the Authority Executive Director, may waive any of the foregoing conditions precedent to the Closing. A waiver of any of the foregoing conditions shall not operate in any way as a waiver, or estoppel with respect to, any subsequent or other failure to comply with such condition, or any other condition contained in this Method of Financing, the Agreement or any of the Authority Loan Documents.

Affordable Housing Agreement Agreement No. A-7950
SOS Children’s Villages California, Inc. APN: 3018-026-001 Attachment No. 12 – Project Budget Page 1

06.30.22 80501-00001/4406301.4
ATTACHMENT NO. 12

PROJECT BUDGET

Sources

Authority Loan ($1,200,000)
- Acquisition Loan $ 462,5001
- Pre-Development Loan $ 737,5001
LACDA Loan $ 500,000
Private Financing $17,301,000

Total $19,001,000

Uses

Property Acquisition $ 875,000
Direct Construction Costs $16,000,000
General Conditions, Contingency $ 745,000
Contractor Profit, Insurance and Bonds $ 61,000
Indirect Construction Costs $ 855,000
Financing and Legal Costs $ 465,000
Reserves $ 0

Total $19,001,000

No payment shall be issued to Developer by the Authority for acquisition or pre - development costs prior to Authority’s approval of Developer’s submittal of a request for payment. All requests for payment s hall have supporting documentation as requested by the Authority.

1 The final amount to be determined at the closing of the acquisition of the Property.

05 18 2022 Minutes CC/SA/HA/IDA/PAA/PCA/PFA 1

MINUTES

CITY COUNCIL/SA/HA/IDA/PAA/PCA/PFA

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
MAY 18, 2022

www.cityofpalmdale.org

5:00 P.M.
1) MAYOR TO CALL MEETINGS TO ORDER
Mayor Hofbauer called the meeting to order at 5:00 p.m.

2) ROLL CALL MAYOR HOFBAUER, MAYOR PRO TEM LOA, COUNCILMEMBERS

CARRILLO, BISHOP, BETTENCOURT
PRESENT: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

ABSENT: None.
3) PUBLIC COMMENTS
Dave Bowman expressed concerns regarding the use of Measure AV funds and the Los Angeles County Sheriff's Department contract.

4) PRESENTATION BY CITY ATTORNEY
City Attorney Beck confirmed the items would be heard as listed.

4.1) CONFERENCE WITH LABOR NEGOTIATORS
City representatives: Councilmembers Carrillo and Bishop Unrepresented employee: Christopher Beck, City Attorney

This Closed Session is being held pursuant to the authority of California Government Code Section 54957.6.

4.2) This Closed Session is being held pursuant to California Government Code 54957.

APPOINTMENT OF PUBLIC EMPLOYEE

Position: Acting/Interim City Attorney

4.3) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Patricia Nevarez
City Claim No.: 2022-005
Date Filed: 1/27/22
Date of Loss: Various

05 18 2022 Minutes CC/SA/HA/IDA/PAA/PCA/PFA 2

4.4) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Michael Behen
City Claim No.: 2022-008
Date Filed: 02/09/22
Date of Loss: Various

4.5) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Shanae Smith
City Claim No.: 2022-005
Date Filed: 1/10/22
Date of Loss: Various

4.6) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: One.

A point has been reached where, in the opinion of the City on the advice of the City Attorney, based on existing facts and circumstances, there is a significant exposure to litigation against the City. The City believes that the facts and circumstances that might result in litigation against the City are not yet known to a potential plaintiff or plaintiffs.

City Attorney's Office

4.7) CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION Ricci v.

City of Palmdale, et al. Los Angeles County Superior Court Case No. 22STCV01269
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.8) CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section 54956.9 of the California Government Code. Number of Cases: One. 5) ANNOUNCEMENT BY CITY ATTORNEY
All Councilmembers were present and able to participate in all items.

Item 4.1 Conference with Labor Negotiators and Item 4.2 Appointment of Interim City Attorney; the City attorney having previously submitted his res ignation and entered into a separation agreement with the City, the City Council has on a 4 -1 vote with Councilmember Carrillo dissenting, agreed to appoint Scott Porter Acting City Attorney when the position becomes vacant.

Item 4.3 Conference with Legal Counsel – Anticipated Litigation: Council was provided an update on this matter and provided unanimous direction to staff. There was no further reportable action.

05 18 2022 Minutes CC/SA/HA/IDA/PAA/PCA/PFA 3

Item 4.4 Conference with Legal Counsel – Anticipated Litigation: Council was provided an update on this matter and provided unanimous direction to staff. There was no further reportable action.

Item 4.5 Conference with Legal Counsel – Anticipated Litiga tion: Council was provided an update on this matter and provided unanimous direction to staff. There was no further reportable action.

Item 4.6 Conference with Legal Counsel – Anticipated Litigation: Council was provided an update on this matter. There was no further reportable action.

Item 4.7 Conference with Legal Counsel – Existing Litigation: Ricci v. City of Palmdale – Council was provided an update on this matter. There was no further reportable action.

Item 4.8 Conference with Legal Counsel – Anticipated Litigation/Initiation: Council was provided an update on this matter. There was no further reportable action.

6) ADJOURN CLOSED SESSION MEETING
Mayor Hofbauer adjourned the meeting at 6:59 p.m.

7:00 P.M.

Mayor Hofbauer called the meeting to order at 7:04 p.m.

7) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE IN HONOR OF OUR TROOPS
8) ROLL CALL MAYOR/CHAIR HOFBAUER, MAYOR PRO TEM/VICE CHAIR/CHAIR

PRO TEM LOA, COUNCILMEMBERS/DIRECTORS/COMMISSIONERS/

MEMBERS CARRILLO, BISHOP, BETTENCOURT COMMISSIONERS FRAGA-

SAENZ, DENNY
PRESENT: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt, Christina Fraga-Saenz, Phil Denny.

ABSENT: None.
9) WAIVER OF FULL READING OF RESOLUTION(S) and ORDINANCE(S) Motion: Move to waive full reading of the Resolution (s) and/or Ordinance(s) to be considered and voted on at this meeting.

Moved by Richard J Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

10) PUBLIC COMMENTS
Michelle Benitez expressed concerns over a citation received for the lack of proper landscaping and the enforcement of water restrictions by water companies. Mayor Hofbauer directed her to Community Compliance Supervisor Gallagher.

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11) CONSENT CALENDAR

11.1) Approve Agreement with Garden State Fireworks, Inc. to provide pyrotechnic services at the Palmdale Amphitheater, in an amount not to exceed $125,630 for a three (3) year term with two (2) one -year options. (Staff reference: Director of Parks and Recreation Smith)
Mayor Pro Tem Loa pulled this item for discussion and questioned the fifty percent penalty in the contract for cancelling the event. Deputy D irector of Parks and Recreation Dombrowski stated it is standard contract language to protect the vendor.

Motion: Approve Agreement with Garden State Fireworks, Inc. to provide pyrotechnic services at the Palmdale Amphitheater.

Moved by Richard J Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

11.2) Approve appropriation of $66,500 from Measure AV unappropriated fund balance for portable handheld radios to be u sed by Community Compliance Division, comprised of Code Enforcement, Neighborhood Compliance, and Community Service Officers. (Staff Reference: Director of Neighborhood Services Miller - Presented by Community Compliance Coordinator Villa) Councilmember Bettencourt pulled this item and recused herself. Mayor Hofbauer asked if the handheld radios were for city staff to communicate with the Sheriff's Department and Community Compliance Manager Gallagher confirmed the radios are compatible and will be used by Community Compliance Officers with the Sheriff's Department.

Motion: Approve appropriation of $66,500 from Measure AV unappropriated fund balance for portable handheld radios to be used by Community Compliance Division, comprised of Code E nforcement, Neighborhood Compliance, and Community Service Officers.

Moved by Richard J Loa, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop. 12) JOINT BUDGET WORKSHOP PRESENTATION CC/SA/HA/IDA/PAA/PCA/PFA

12.1) Presentation of City of Palmdale Proposed Budget for Fiscal Year 2022-23. (Staff Reference: Director of Finance Samson)
Director of Finance Samson, Interim City Manager Perez, and Director of Neighborhood Services Miller provided a detailed overview of the budget.

Mayor Pro Tem Loa directed staff to provide budget books early for Council's review.

Some of the topics discussed were:

• City fund reserves of 30%
• Potential decrease in property values and increase of interest rates for real estate

05 18 2022 Minutes CC/SA/HA/IDA/PAA/PCA/PFA 5
• Cost of living adjustments for city staff and personnel enhancements • Capital improvement and transportation projects funded through special revenue funds
• American Rescue Plan Act (ARPA) funds and qualifying uses • Allocation of Measure AV funds
13) ADJOURN HOUSING AUTHORITY
Mayor Hofbauer adjourned the Housing Authority at 9:08 p.m.

Mayor called for a recess from 9:08 p.m. - 9:18 p.m.
14) WORKSHOP PRESENTATION

14.1) Presentation by NBS regarding Community Facilities District formation. (Staff Reference: Director of Public Works Heffernan)
Director of Public Works Heffernan introduced Director Sara Mares of NBS who provided a PowerPoint presentation on forming a Community Facilities District.

Mayor Hofbauer asked the difference between a CFD and a Landscape Maintenance District (LMD ). Mr. Heffernan stated with the CFD you have the ability to bring in different services and apply it to different projects and the landscape lighting act districts have restrictions for use and a two -thirds vote is required of all the people who live in the district.

Councilmember Carrillo asked if the existing LMD's will remain as LMD's.

Director of Public Works Heffernan stated for now, but ultimately, they would like to bring the LMD's down to an imaginable number or bring them into the current Community Facility District (CFD). Councilmember Carrillo asked if it was possible for the property owners of an existing LMD to remain on the LMD and Director of Public Works Heffernan stated it would go to a vote.

There was additional discussion regarding the allocation of LMD funds.

15) APPOINTMENTS

15.1) Approve Reappointments of General Plan Advisory Committee Members. (Staff Reference: City Clerk Smith)
Motion: Approve Reappointments of General Plan Advisory Committee Members. (Staff Reference: City Clerk Smith)
Moved by Richard J Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

16) PUBLIC HEARING

16.1) Public Hearing and Review of Proposed Resolution No. CC 2022-059 for adoption. (Staff Reference: Director of Economic and Community Development Garibay - Presented by Associate Planner Sauder)

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Senior Planner Magana read the title of Resolution No. CC 2022-059 and provided a PowerPoint presentation.

RESOLUTION NO. CC 2022-059, A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF PALMDALE APPROVING DENSITY BONUS
AGREEMENT 22 -002 (A -7912); A REQUEST FOR A DENSITY BONUS AGREEMENT FOR MINOR SITE PLAN REVIEW 22 -002; A REQUEST TO

CONSTRUCT A MULITPLE -FAMILY RESIDENTIAL DE VELOPMENT
LOCATED EAST OF 9TH STREET EAST APPROXIMATELY 100 FEET
SOUTH OF EAST AVENUE Q (APN: 3008-040-012)

Mayor Hofbauer opened the Public Hearing.

Jason Zink expressed concerns regarding the project being piecemealed and the lack of sidewalks.

A motion was made and carried unanimously to close the Public Hearing.

Motion: Adopt Resolution No. CC 2022-059.

Moved by Juan Carrillo, seconded by Austin Bishop.

Vote: Motion carried (4-1)
Yes: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop.

No: Laura Bettencourt.

16.2) Public Hearing to hear public comments on the Draft 2022 -2023 Action Plan and proposed expenditure of Consolidated Plan funds; Review and approve the 2022-2023 Action Plan; and Authorize the City Manager or their designee to make necessary changes and submit the 2022 -2023 Action Plan, execute documents related to the submission of the Action Plan and agreements for Sub-Recipients and the Fair Housing Provider. (Staff Refer ence: Director of Neighborhood Services Miller- Presented by Housing Manager Reyes)

Housing Manager Reyes provided a detailed overview of the staff report.

Mayor Hofbauer opened the Public Hearing.

The following individuals provided public comments:

Jason Zink voiced his support for senior assistance.

Dave Bowman encouraged Council to listen to the constituents and support the seniors.

A motion was made and carried unanimously to close the Public Hearing.

Motion: Approve the recommendations and findings as listed in the staff report.

Moved by Richard J Loa, seconded by Juan Carrillo.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

05 18 2022 Minutes CC/SA/HA/IDA/PAA/PCA/PFA 7

16.3) Public Hearing to hear public c omments on the Draft HOME -ARP Allocation Plan and the proposed expenditure of HOME Investment Partnerships Program American Rescue Plan (HOME -ARP) funds; Review and approve the HOME -ARP Allocation Plan; and Authorize the City Manager or their designee to make necessary changes and submit the HOME -ARP Allocation Plan, execute documents related to the submission of the HOME -ARP Allocation Plan. (Staff Reference: Director of Neighborhood Services Miller - Presented by Housing Manager Reyes)

Housing Manager Reyes provided a detailed overview of the staff report.

Mayor Hofbauer opened the Public Hearing.

Jason Zink requested that Council survey the seniors to find out their needs.

A motion was made and carried unanimously to close the Public Hearing.

Motion: A pprove the recommendations and findings as listed in the staff report. Moved by Juan Carrillo, seconded by Richard J Loa.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Mayor Pro Tem Loa stated on May 7th in the Los Angeles Times Steve Lopez columnist quoted Congresswoman Karen Bass saying that the solution to the Los Angeles homeless problem was to build a homeless village in the City of Palmdale.

Mr. Loa directed Interim City Manager Perez to provide a response on behalf of the city.

17) ADJOURN

Mayor Hofbauer adjourned the meeting at 10:09 p.m. in honor of Sam Spinallo.

PASSED, APPROVED, and ADOPTED this 13th day of July 2022

Steven D. Hofbauer, Mayor

ATTEST:

Shanae S. Smith, City Clerk

06/01/2022 Minutes CC/SA/HA/PCA/PFA 1

MINUTES

CITY COUNCIL/SA/HA/PCA/PFA CITY HALL

COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
JUNE 1, 2022

www.cityofpalmdale.org

5:00 P.M.
1) MAYOR TO CALL MEETINGS TO ORDER
Mayor Pro Tem Loa called the meeting to order at 5:00 p.m.

2) ROLL CALL

MAYOR/CHAIR HOFBAUER, MAYOR PRO TEM/VICE CHAIR LOA,

COUNCILMEMBERS/COMMISSIONERS CARRILLO, BISHOP, BETTENCOURT,

FRAGA-SAENZ, DENNY

PRESENT: Richard J Loa, Juan Carrillo, Laura Bettencourt, Christina Fraga-Saenz.

ABSENT: Steven Hofbauer, Austin Bishop, Phil Denny.

Motion: Excuse the absence of Steven D. Hofbauer, Austin Bishop, Phil Denny.

Moved by Christina Fraga-Saenz, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Laura Bettencourt, Christina Fraga-Saenz.

Absent: Steven Hofbauer, Austin Bishop, Phil Denny.

3) PUBLIC COMMENTS
None.

Acting City Attorney Porter and City Clerk Smith provided clarification to Councilmember Bettencourt regardi ng Zoom public comments and remote attendance for Council.

4) PRESENTATION BY CITY ATTORNEY
Acting City Attorney Porter confirmed all items would be heard as listed.

4.1) CONFERENCE WITH LEGAL COUNSEL —EXISTING LITIGATION Ricci v.

City of Palmdale, et al. Los Angeles County Superior Court Case No. 22STCV01269
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.2) CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATIONCV Communities v. AVEK, et al. Los Angeles County Superior Court Case No. 20STCV10953
This closed session is being held pursuant to the authority of California

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Government Code Section 54956.9(d)(1).

4.3) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that const itute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Shanae Smith
City Claim No.: 2022-005
Date Filed: 1/10/22
Date of Loss: Various

4.4) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Patricia Nevarez
City Claim No.: 2022-005
Date Filed: 1/27/22
Date of Loss: Various

4.5) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Michael Behen
City Claim No.: 2022-008
Date Filed: 02/09/22
Date of Loss: Various

4.6) CONFERENCE WITH LEGAL COUNSEL—EXISTING
LITIGATION Community Development Associates et al. v. City of Palmdale, et al. Los Angeles County Superior Court Case No. 18STCV06968 This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.7) CONFERENCE WITH REAL PROPERTY NEGOTIATORS The reason for holding a closed session is for the purpose of obtaining authorization and direction from the City Council regarding the possible acquisition of property interests in the following property, generally located near Avenue M and 10th Street West:

Property Owner: Successor Agency to the Community Redevelopment Agency of the City of Palmdale Property: APN 3128-015-900 & 902City Negotiator: Luis Garibay This closed session is being held pursuant to the authority of California Government Code Section 54956.8. Closed session is recommended because the City Council will be instructing the negotiator regarding terms and conditions, including price, for the possible purchase of the real property identified above.
5) ANNOUNCEMENT BY CITY ATTORNEY
Acting City Attorney Porter confirmed all members were in attendance with the exception of Mayor Hofbauer.

There was no reportable action taken.

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6) ADJOURN CLOSED SESSION MEETING
Mayor Pro Tem Loa adjourned the meeting at 6:59 p.m.

7:00 P.M.

Mayor Pro Tem Loa called the meeting to order at 7:00 p.m.

7) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE IN HONOR OF OUR TROOPS
8) ROLL CALL MAYOR/CHAIR HOFBAUER, MAYOR PRO TEM/VICE CHAIR LOA,

COUNCILMEMBERS/DIRECTORS/COMMISSIONERS CARRILLO, BISHOP,

BETTENCOURT, FRAGA-SAENZ, DENNY

PRESENT: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt, Christina Fraga-Saenz.

ABSENT: Steven Hofbauer, Phil Denny.

Mayor Pro Tem Loa introduced Acting City Attorney Porter.

9) PRESENTATIONS

9.1) Mayor Pro Tem Loa presented a cute critter a vailable for adoption at the Palmdale Animal Care Center.

9.2) Mayor Pro Tem Loa presented Certificates of Recognition to the 2022 Rancho Vista Queens.

Miss Rancho Vista 2022 Lyn ‘ Aya Gipson
Teen Miss Rancho Vista 2022 Kaylee Crumlish
Jr Miss Rancho Vista 2022 Nichole Wilson
Young Miss Rancho vista 2022 Elexia Jimenez
Little Miss Rancho Vista 2022 Aurora Aguilar
Tiny Miss Rancho Vista 2022 Penelope Avila

9.3) Mayor Pro Tem Loa presented a Proclamation t o Chair Jung of the City of Palmdale Human Rights Advisory Committee declaring June as LGBTQ Pride Month in the City of Palmdale.

9.4) Mayor Pro Tem Loa presented a Proclamation to Captain Shaffer declaring June 14th as Flag Day in the City of Palmdale.

9.5) Mayor P ro Tem Loa presented a Proclamation to Edly Atherley, Palmdale Regional Hospital, declaring June 13th – 19th International Men’s Health Week in the City of Palmdale.

9.6) Mayor Pro Tem Loa presented a Proclamation to Fred Thompson declaring June19th as Juneteenth in the City of Palmdale.

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10) WAIVER OF FULL READING OF RESOLUTION(S) and ORDINANCE(S) Motion: Move to waive full reading of the Resolution (s) and/or Ordinance(s) to be considered and voted on at this meeting.

Moved by Juan Carrillo, seconded by Laura Bettencourt.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

11) PUBLIC COMMENTS
The following individuals provided public input:

Eugene Hernandez commented on the Uvalde, Texas mass shooting and encouraged repair of McAdam park.

Marisela Gomez provided comments regarding support of all citizens.

Chieyka Twinn and Roschell Cole encouraged city support of funding for the DHF program.

Claudia Taborda, Marcos Alvarez, Ruth Sanchez, Dean Brown, Xavier Flores, Erika Schwerdt, Felix Menendez, Victor Segura, Eduardo, Jorge Perez, Oscar Iraheta, Vladimir Gomez, Melanie Palahnoh, Brenda Avadian, Arthur Calloway, and Alenna Schofield, Basilio Hernandez, and John Parsmyan commented on the distribution of Measure AV funds.

12) HOUSING AUTHORITY CONSENT CALENDAR
12 . 1) Adopt Resolution No. HA 2022 -003, a resolution of the Housing Auth ority of the City of Palmdale, approving the amendment of agreement 07 -IIG-4212 with the State of California Department of Housing and Community Development for the Proposition 1-C Infill Infrastructure Grant Program. (Staff Reference: Director Neighborhoo d Services Miller - Presented by Housing Manager Reyes)
12 . 2) Receive and File the Annual Financial Report for the year ended June 30th, 2021 for The Housing Authority of the City of Palmdale. (Staff Reference:

Director of Finance Samson)
12 . 3) Approve the minutes fro m previous meetings. (Staff Reference: Authority Secretary Smith)

HA - March 16, 2022
HA - April 6, 2022

Motion: Approve all items listed on the Consent Calendar.

Moved by Christina Fraga-Saenz, seconded by Juan Carrillo.

Vote: Motion carried (5-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt, Christina Fraga-Saenz.

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Absent: Steven Hofbauer, Phil Denny

Mayor Pro Tem/Vice Chair Loa adjourned the Housing Authority at this time. 13) CONSENT CALENDAR

13.1) Receive and File the Monthly Investment activity reports for April 2022. (Staff Reference: Director of Finance Samson)

13.2) Approve agreement with Turner Consulting and Actuarial, LLC., to provide actuarial services in an amount not to exceed $ 111,000.00 for a three (3) year term with the option to extend for two (2) additional years. (Staff Reference: Director of Finance Samson)

13.3) Receive and File the Annual Financial Reports for the year ended June 30th, 2021 for the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation. (Staff Reference: Director of Finance Samson)

13.4) Approve the City of Palmdale’s 2022 Five-Year Capital Improvement Plan. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

13.5) Adopt Resolution No. CC 2022 -039, a Resolution of the City Council of the City of Palmdale of intention to continue assessments for Fiscal Year 2022/2023, preliminarily approving the annual Engineer’s Report and providing for Notice of Hearing for the City of Palmdale Drainage Benefit Assessment Districts No. 1 and No. 2006 -02. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

13.6) Adopt Resolution No. CC 2022 -040, a Resolution of the City Council of the City of Palmdale of intention to continue assessments for Fiscal Year 2022/2023, preliminarily approving the annual Engineer’s Reports and providing for Notice of Hearing for the City of Palmdale Landscape Maintenance Assessment Districts and Annexations, Park Maintenance and Recreation Improvement District, and Streetlight Maintenance Assessment Districts and Annexations. (Staff Reference: Director of Public Works Heffernan)

13.7) Adopt Resolution No. CC 2022 -060, a Resolution of the City Council of the City of Palmdale declaring it’s intention to establish a community facilities district and to authorize the levy of special tax therein for citywide maintenance and services. (Staff Reference: Director of Public Works Heffernan)

13.8) Notice of Completion - Accept Publ ic Improvements for Palmdale Senior Living located at West Rancho Vista Boulevard & Town Center Drive. (Staff Reference: Director of Public Works Heffernan)
Mayor Pro Tem Loa pulled this item for discussion. Director of Public Works Heffernan provided a brief overview of the Palmdale Senior Living project.

Motion: Accept Public Improvements for Palmdale Senior Living located at West Rancho Vista Boulevard & Town Center Drive.

Moved by Richard J Loa, seconded by Austin Bishop.

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Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

13.9) Authorize Purchase Order No. 20220479 with Generac Power Systems, Inc. for PN 804, Emergency Generator, in the amount of $109,904. (Staff Reference: Direct or of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

13.10) Approve Amendment No. 2 for PN 826, the Palmdale Regional Recreation Complex, with Barker Rinker Seacat Architecture in the amount of $20,280. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

13.11) Award construction agreement with Manhole Adjusting Inc. for PN 847, 2022 Local Street & Minor Arterial Resurfacing Project, in the amount of $6,937,785.50 for a term of 60 working days from the date of the Notice to Proceed. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)
Mayor Pro Tem Loa pulled this item for discussion of expenses. Director of Public Works Heffernan, Deputy Director of Public Works Glidden, and the Contractor provided clarification on expenses.

Motion: Award construction agreement with Manhole Adjusting Inc. for PN 847, 2022 Local Street & Minor Arterial Resurfacing Project.

Moved by Austin Bishop, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

13.12) Adopt Resolution No. CC 2022-054, a Resolution of the City Council of the City of Palmdale to adopt a list of projects for Fiscal Year 2022-2023 to be funded by SB 1: The Road Repair and Accountability Act of 2017. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

13.13) Adopt Resolution No. CC 2022 -068, a Resolution of the City Council of the City of Palmdale declaring its intention to conduct a public hearing to consider the vacation of a segment of 6th Street East (100 Feet South of Sierra Highway to 220 Feet North of Avenue P -14) and the reservation of the utility easements therein. (Staff Reference: Director of Public Works Heffernan)
Mayor Pro Tem Loa pulled this item for discussion on the electrical charging station. Councilmember Bishop recused himself and left the dais. Director of Public Works Heffernan stated this project is a street vacation to accommodate the installation.

Motion: Adopt Resolution No. CC 2022-068.

Moved by Juan Carrillo, seconded by Laura Bettencourt.

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Vote: Motion carried (3-0)
Yes: Richard J Loa, Juan Carrillo, Laura Bettencourt.

Absent: Steven Hofbauer.

Mayor Pro Tem Loa recessed the meeting at 8:50 p.m. - 9:00 p.m.

13.14) Approve 32 fireworks booth permits for non -profit organizations. (Staff Reference: Director of Economic and Community Development Garibay)

13.15) Approve Cost -Sharing Agreement between the City of Palmdale and the Antelope Valley Mall, LLC/CBRE and Harris AVM, LLC for a reimbursement amount of $120,000 for the three (3) year term of the agreement. (Staff Reference: Director of Neighborhood Services Miller - Presented by Neighborhood Services Specialist Nichols)

13.16) Approve the minutes from the previous meetings. (St aff Reference: City Clerk/Agency Secretary Smith)

CC - April 20, 2022
CC/SA - May 4, 2022

Motion: Approve the items listed on the Consent Calendar except for 13.8, 13.11, and 13.13.

Moved by Austin Bishop, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

14) PUBLIC HEARING

14.1) Public Hearing to hear public comments and review proposal to amend the 2019-2020 Action Plan to reprogram Community Developme nt Block Grant COVID (CDBG -CV) funds in the amount of $207,510 from the Economic Opportunity Program CV and $23,990 from the Mortgage Assistance CDBG CV to SAVES CV in the amount of $231,500. (Staff Reference: Director of Neighborhood Services Miller - Presented by Housing Manager Reyes) Director of Neighborhood Services Miller provided a detailed overview of this item and reported $24,000 was provided for mortgage assistance . Staff to provide available fund amounts to City Council in July 2022.

Mayor Pro Tem Loa opened the Public Hearing.

Public Comments: None.

A motion was made and carried unanimously to close the Public Hearing.

Motion: Approve the recommendations and findings as listed in the staff report. Moved by Juan Carrillo, seconded by Laura Bettencourt.

Vote: Motion carried (4-0)

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Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

15) APPOINTMENTS

15.1) Approve Reappointment to the Board of Library Trustees. (Staff Reference:

City Clerk Smith)
Motion: Approve Reappointment to the Board of Library Trustees.

Moved by Laura Bettencourt, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

15.2) Approve Reappointments of Planning Commissioners to the Planning Commission. (Staff Reference: City Clerk Smith)
Table item to the 6/15/2022 City Council meeting.

Motion: Table this item to the 6/15/22 City Council Meeting.

Moved by Juan Carrillo, seconded by Laura Bettencourt.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

15.3) Approve Reappointments to the Mobile Home Park Rental Review Board. (Staff Reference: City Clerk Smith)
Motion: Approve Reappointments to the Mobile Home Park Rental Review Board.

Moved by Laura Bettencourt, seconded by Austin Bishop.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

16) NEW BUSINESS

16.1) Award Measure AV Grant Program Funding, totaling $1,306,810, to grantees in Exhibit A and authorize Interim City Manager to enter into agreements ranging from $2,000 to $250,000. (Staff Reference: Interim City Manager Perez, Deputy Director of Parks and Recreation Dombrowski and Management Analyst Kelley)
This item was tabled to the 6/15/2022 City Council meeting.

16.2) Discuss potential amendment to Palmdale Municipal Code Section 2.08.040 regarding regular meetings, including meeting times, public comment periods, and meeting organization.

Motion: Table this item to the June 15, 2022 meeting. Direct staff to conduct an online survey to run for sixty days, providing residents with an opportunity to offer feedback regarding day/time of City Council meetings.

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Moved by Laura Bettencourt, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

16.3) Adopt Resolution Nos. CC 2022 -056, CC 2022 -057, and CC 2022 -058 Initiating the Tuesday, November 8, 2022 City of Palmdale City Council General Municipal Election. (Staff Reference: City Clerk Smith) City Clerk Smith provided a brief overview of the staff report.

Motion: Adopt Resolution Nos. CC 2022 -056, CC 2022 -057, and CC 2022 - 058. Moved by Laura Bettencourt, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

17) INFORMATIONAL REPORT FROM MAYOR AND / OR COUNCILMEMBERS ON

THEIR VARIOUS COMMITTEE MEMBERSHIPS AND MEETINGS ATTENDED AT

PUBLIC EXPENSE

17.1) COMMITTEE MEMBERSHIPS.
• ANTELOPE VALLEY AIR QUALITY MANAGEMENT DISTRICT -
Councilmember Bishop announced the AVAQMD is providing money to businesses and local organizations that have older vehicles or equipment that is polluting the air.
• CALIFORNIA CONTRACT CITIES ASSOCIATION - Councilmember Carrillo attended the meeting and stated housing policies were discussed. • LOS ANGELES COUNTY SANITATION DISTRICT - Mayor Pro Tem Loa attended the meeting.
• SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS
REGIONAL COUNCIL - Councilmember Carrillo reported attending the annual conference.

Councilmember Bishop attended Fire Service Day, ribbon cutting on Juice It Up, city townhall meeting, Sheriff Boosters Casino Night, ribbon cutting for Silver Depot, International Conference of Shopping Centers (ICSC) convention, AV Edge event, Visit Palmdale Board meeting, and Healing and Honor Field event.

Mayor Pro Tem Loa attended the Healing and Honor Field event, Palmdale Sheriff Boosters meeting, Homes 4 Families event, lunch meeting with the hospital, Deputy Hammack remembrance event, Sheriff Boosters Casino Night, and International Conference Shopping Center (ICSC), AV Edge Economic Summit, Press Conference regarding fireworks, and the radio talk show

Councilmember Bettencourt encouraged people to vote.

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17.2) MEETINGS ATTENDED AT PUBLIC EXPENSE
18) CITY MANAGER’S REPORT
Interim City Manager Perez reported the following:

• The Healing and Honor Field was a great effort by staff and received tremendous turn out from the community
• The opening day of Dry Town took place this weekend and there was a good attendance from the community
• There is a strong line up for the amphitheater, kicking off with the U.S. Airforce Band on June 25th
• The City ’s Communication Department will be working with Palmdale Water District and Los Angeles County Waterworks as the requirement for preserving water is rolled out
• The city is stepping up the graffiti abatement campaign • Announced the retirement of John Mlynar, PIO/Communications Manager

Councilmember Bettencourt stated a conversation is needed in a future meeting addressing city ordinances related to landscaping and watering restrictions. Interim City Manager Perez stated part of the effort will be to make sure citizens are not being improperly sited.

19) CITY COUNCIL REQUESTS FOR NEW AGENDA ITEMS
Councilmember Carrillo requested clarification on the voting for items where two councilmembers must recuse themselves. Acting City Attorney Porter stated he would provide a memo to Council.

20) Adjournment.

Mayor Pro Tem Loa adjourned the meeting at 10:05 p.m. to June 15, 2022 at 7:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

PASSED, APPROVED, and ADOPTED this 13th day of July 2022.

Steven D. Hofbauer, Mayor

ATTEST:

Shanae S. Smith, City Clerk
City Council Staff Report
DATE: JULY 13, 2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER’S OFFICE – FINANCE DIVISION
DISTRICT: ALL
SUBJECT: RECEIVE AND FILE THE MONTHLY INVESTMENT ACTIVITY REPORTS FOR MAY 2022.

ISSUE
Receive and file the monthly investment activity reports for May 2022.

RECOMMENDATION
Staff recommends that the City Council accept the monthly investment activity report for City of Palmdale and Successor Agency for May 2022.

BACKGROUND
Pursuant to Section 16 of the City of Palmdale and Successor Agency Investment Policy, the City Treasurer shall prepare and present monthly and quarterly reports on investments to the City Manager/Executive Director and the City Council/Directors.

The reports shall detail the type of investment, name of the issuer, purchase date, date of maturity, amount of deposit, and rate of interest. This information shall be provided for all City and Successor Agency pooled investments, as well as for Certificates of Participation, Revenue Bonds, Tax Allocation Bonds, Assessment Districts and Community Facilities District accounts which are managed by outside Fiscal Agents.

The monthly and quarterly reports provide a synopsis of the investment activity for the City of Palmdale and Successor Agency. The report s provide information on assets, allocations, average maturities, yields, and book valuations.

The interest rates present ed are the most current rates available as of the date of this report.

The market values presented for pooled City and Successor Agency investments are based on closing prices for the related investment as of the date of this report. This information was o btained from the Wall Street Journal, Bloomberg Financial Markets, Capital Market Finances, or other reliable source of market prices.

Report to Mayor and City Council
Re: Monthly Report on Investments
July 13, 2022