Palmdale City Council
August 21, 2024

Section 603 Conflict of Interest
a. No member, official, or employee of City will have any personal interest, direct or indirect, in this Agreement, nor will any such member, official, or employee participate in any decision relating to the 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. Owner warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement.

Section 604 Nonliability of City Officials and Employees No member, official, agent, legal counsel or employee of City will be personally liable to Owner, or any successor in interest in the event of any default or breach by City or for any amount which may become due to Owner or successor or on any obligation under the terms of this Agreement.

Section 605 Inspection of Books and Records
Subject to and without limiting Article VIII hereof:
a. Owner will maintain complete, accurate, and current records pertaining to the performance of this Agreement and to the Property for a period of five (5) years after the creation of such records, and will permit any duly authorized representative of the City to inspect and copy records, during regular business hours upon reasonable advance notice. Records must be kept accurate and current.
b. The City reserves the right to inspect, monitor, and observe work and services performed by Owner at any and all reasonable times.
c. The City reserves the right to audit the records of Owner any time during the performance of this Agreement and for a period of five years after final payment is made under this Agreement.

Section 606 Approvals
a. Except as otherwise expressly provided in this Agreement, approvals required of City or Owner in this Agreement, including the attachments to this Agreement, will not be unreasonably withheld or delayed. All approvals will be in writing. Failure by either party to approve a matter within the time provided for approval of the matter will not be deemed a disapproval, and failure by either party to disapprove a matter within the time provided for approval of the matter will not be deemed an approval.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904

b. Except as otherwise expressly provided in this Agreement, approvals required of the City will be deemed granted by the written approval of the City Manager or designee. City agrees to provide notice to Owner of the name of any designee of the City Manager on a timely basis and to provide updates from time to time. Notwithstanding the foregoing, the City Manager may, in his or her sole discretion, refer to the City Council any item requiring City approval; otherwise, “City approval” means and refers to approval by the City Manager or designee.

Section 607 Real Estate Commissions
Neither Owner nor City will be liable for any real estate commissions or brokerage fees which may arise from this Agreement. Owner and City each represents that it has engaged no broker, agent or finder in connection with this Agreement.

Section 608 Construction and Interpretation of Agreement a. The language in all parts of this Agreement will in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party. The parties hereto acknowledge and agree that this Agreement has been prepared jointly by the parties and has been the subject of arm’s length and careful negotiation over a considerable 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 will not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction will 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 any party hereunder, will be held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement will not be affected thereby and each other term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. It is the intention of the parties hereto 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 illegal, 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.
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 incorporat ed 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) means , refer to, and PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904

include the covenants, obligations, and undertakings existing pursuant to this instrument and 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 includes the plural and vice versa, and the masculine gender includes the feminine and vice versa.

Section 609 Time of Essence
Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement.

Section 610 No Partnership
Nothing contained in this Agreement will be deemed or construed to create a partnership, joint venture, or any other similar relationship between the parties hereto or cause City to be responsible in any way for the debts or obligations of Owner or any other Person.

Section 611 Compliance with Law
Owner 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 Project. The judgment of any court of competent jurisdiction, or the admission of Owner or any lessee or permittee in any action or proceeding against them, or any of them, whether City be a party thereto or not, that Owner , lessee or permittee has violated any such ordinance or statute in the development and use of the Property will be conclusive of that fact as between City and Owner.

Section 612 Binding Effect
This Agreement, together with the agreements, covenants and warranties contained herein, will be binding on and will inure to the benefit of the parties hereto and all of their respective successors and assigns, whether voluntary or involuntary or by agreement or operation of law.

Section 613 No Third Party Beneficiaries
The parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of City and Owner , and not for the benefit, directly or indirectly, of any other person or entity, except as otherwise expressly provided herein.

Section 614 Authority to Sign
Owner hereby represents that the persons executing this Agreement on behalf of Owner have full authority to do so and to bind Owner to perform pursuant to the terms and conditions of this Agreement.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904

Section 615 Incorporation by Reference
Each of the attachments and exhibits attached hereto is incorporated herein by this reference.

Section 616 Counterparts
This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined, will constitute one single instrument.

Section 617 Severability
If any provision of this Agreement will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions of this Agreement will not be affected thereby, but this Agreement will be construed as if such invalid, illegal or unenforceable provisions had not been contained herein, and the remainder of this Agreement will be construed as if the invalid, illegal, or unenforceable provision had never been contained in it.

ARTICLE VII ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
a. This Agreement may be executed in duplicate originals, each of which is deemed to be an original. This Agreement, including all of the Attachments appended to this Agreement, constitutes the entire understanding and agreement of the parties. b. This Agreement integrates all of the terms and conditions mentioned herein or incidental to this Agreement, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. c. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City or Owner, and all amendments to this Agreement must be in writing and signed by the appropriate authorities of City and Owner.

ARTICLE VIII PLHA REQUIREMENTS
The following provisions are required by use of the PHLA Funds and Owner agrees that all of the following apply to the Project and the Property and further agrees to comply with all of the following with respect to the Project and the Property:
a. Housing First To the extent applicable, Owner must provide eligible activities in a manner consistent with the housing first practices described in California Code of Regulations, title 25, section 8409(b)(1)-(6) and if funds are approved to provide permanent housing, the Project shall incorporate the core components of Housing First as provided in Section 8255(b) of the Welfare and Institutions Code.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904

b. Monitoring Activities
(1) Onsite monitoring visits by City and HCD shall occur whenever determined necessary by City or HCD, but at least once during the term of the PLHA Loan. (2) City and HCD may monitor Owner’s performance based on a risk assessment according to the terms of the Standard Agreement. (3) City may be required to submit to HCD all PLHA monitoring documentation necessary to ensure Owner is in continued compliance with PLHA requirements.

Owner agrees to provide such documentation requested by City by the date specified in City’s request.
c. Reporting and Audits
(1) If requested by City, Owner shall submit an annual report to City by July 10 of each year that reports all activities from the previous fiscal year (7/1 – 6/30), on forms prepared by HCD.
(a) The annual report shall include, at a minimum:
(i) Amounts of the PLHA Loan disbursed and activities PLHA Loan funds were applied to.
(ii) Income levels of households assisted with PLHA Loan funds and affordability level for the Affordable Units.
(iii) Close out report once all PLHA Loan funds have been disbursed and all activities funded during the fiscal year. (iv) Any additional information requested by the City or HCD. (2) City and HCD each reserve the right to perform or cause to be performed a financial audit at Owner’s expense.
(3) If a financial audit is required by the City or HCD, the audit shall be performed by an independent certified public accountant. Selection of an independent audit firm shall be consistent with procurement standards contained in 24 CFR 85.36. (4) Owner shall notify City and HCD of the auditor ’s name and address immediately after the selection has been made. The contract for the audit shall allow access by the City and HCD to the independent auditor’s working papers. (5) Owner is responsible for the completion of audits and all costs of preparing audits.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904

(6) If there are audit findings, Owner must submit a detailed response acceptable to City and HCD for each audit finding within ninety (90) days from the date of the audit finding report.
d. Retention and Inspection of Records
(1) Owner is responsible for maintaining records, which fully disclose the activities funded by the PLHA Loan. Adequate documentation of each transaction s hall be maintained to permit the determination, through an audit if requested by City or HCD, of the accuracy of the records and the allowability of expenditures charged to PLHA Loan funds. (2) Owner agrees that City and HCD or their s designees shall each have the right to review, obtain, and copy all records and supporting documentation pertaining to performance of this Agreement. Owner agrees to provide City and HCD or their designees with any relevant information requested. Owner agrees to permit City and HCD or their designees access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with the PLHA s tatutes and PLHA Guidelines, the Standard Agreement, and this Agreement. (3) Owner agrees to retain all records for a period of five (5) years after the end of the term of this Agreement:
(a) If any litigation, claim, negotiation, audit, monitoring, inspection or other action has been started before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues, which arise from it.
(b) Owner also agrees to include in any contract that it enters into in an amount exceeding $10,000, City and HCD’s independent right to audit the contractor’s records and interview their employees. Owner shall comply with the caveats and be aware of the penalties for violation of fraud and for obstruction of investigation as set forth in California Public Code Section 10115.10.

4. The determination by City and/or HCD of the eligibility of any expenditure shall be final. If the eligibility of any expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and City or HCD shall determine the reimbursement method for the amount disallowed.

5. Owner shall retain all books and records relevant to this Agreement for a minimum of five years after the end of the term of this Agreement. Records relating to any and all audits or litigation relevant to this Agreement shall be retained for five years after the conclusion or resolution of the matter.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904

e. Relocation Owner shall comply with all requirements of applicable California Relocation Laws. Any relocation plan for the Project shall be subject to the review and approval by City and HCD.
f. C ompliance with L aw Owner agrees to comply with all State and Federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the PLHA Loan and PLHA Loan activities.
g. G ood Standing Owner certifies that it is qualified to do business and is in good standing with the California Secretary of State and the California Franchise Tax Board. h. C ompliance with Conditions Owner agrees to comply with all conditions of this Agreement. Failure to comply with conditions may result in cancellation of this Agreement. [Remainder of Page Intentionally Left Blank; Signatures on Following Page] PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Page S-1

IN WITNESS WHEREOF , the City and Owner have signed this Agreement as of the date first written above.
“CITY”

THE CITY OF PALMDALE, CALIFORNIA

By: ________________________________
Ronda Perez
City Manager

ATTEST:

By: ________________________________
Roxanne Faber
City Clerk

APPROVED AS TO FORM:

By: ________________________________
William P. Curley, III
City Attorney

KANE, BALLMER & BERKMAN

By: ________________________________
Susan Apy
City Special Counsel
“OWNER”

ADVANCING COMMUNITIES TOGETHER,
a California nonprofit public benefit corporation

By:____________________________________
Rossie D. Cherry
Chief Executive Officer

By:____________________________________
Olivia Cherry
Executive Director

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 1 – Site Map

ATTACHMENT NO. 1

SITE MAP

(behind this page)
17(17
12990±SF
16 (28
15 (904
14(14
13(1312 (12
11 (11
10 (10
N 88°54'40"E 91.919
(9
8 (8
7(7
6 (26
5 (5
4 (4
3 (3
2 163.31
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1 156.80(1
9100±SF
18 (18
7040±SF
19(19 20(906
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23(23N 7°29'40"W

39.47R=25

23.56R=15
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6 0
5 TH
6 0
70 70
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13 TRACT
PBK
3006
17085 17086
AVE Q
PG
11AVE Q-1
AVE Q-2
NO
15912
124.96

35.20 59.59 58.36
58 9283 SF
9660 SF
169.82
10038 SF
176.33
" "

58.37 58.36

58.37 10416 SF
182.85
" 58

58.36 10794 SF
189.36
105
60 105.40
R=15

23.56 4

24.89 19.24
6880±SF

35.50 9980±SF
10 143.92
135.91

32.99 8830±SF
R=40
R=40
100

36.11 145.91
12220±SF
8320±SF

41.91 120
144.68
105.40
105
6880±SF
60 32.37

19.24 24.89R=40
450M B 426 13 14
- -
129.36
6910±SF
105
112.93
R=15

23.564.62 20.90

20.21 7040±SF
70 108.45
R=90

17.93 29.79

34.59 11200±SF
109.71
75 38.40
R=40
9540±SF
146.83
70 126.54
124.47
108.45

35.39 17.93

29.79 20.21

20.90R=90

23.56R=15

4.62 70
112.93
60 105
6910±SF50 7750±SF
65 105
R=15

23.56 50
120
" 65
6565
120

59.47 118.09

28.40 41.37
3 R=370
20 20
PG
9 7920±SF
SHEET
P. A.
996-10
TRA
17085
17086

REVISED
10-24-62
710302

OFFICE OF THE ASSESSOR

COUNTY OF LOS ANGELES
COPYRIGHT © 2002

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ALL 900 SERIES PARCELS ON THIS PAGE ARE ASSESSED

TO THE HOUSING AUTHORITY OF THE CITY OF
PALMDALE, UNLESS OTHERWISE NOTED.

Date Saved: 7/21/2022 12:42:17 PM
Date Printed: 4/30/2015 11:26:44 AM
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PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 2 – Legal Description

ATTACHMENT NO. 2

LEGAL DESCRIPTION

(behind this page)

Attachment 2- Legal Description

LEGAL DESCRIPTION OF PROPERTY

REAL PROPERTY IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

THE PARCEL OF LAND IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AS SHOWN AS LOT 20 15 OF TRACT NO. 15912 RECORDED IN BOOK 426 PAGES 13 AND 14 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY

APN 3008-010-904
PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 3 – Project Budget

ATTACHMENT NO. 3

PROJECT BUDGET

(behind this page)
Palmdale Dream Center
Project Name: 0
Developer: Advancing Communities Together Green Cells are User Input Address: Palmdale , Ca 93350 White Cells are Automatically Calculated Values Uses
Acquisition Costs:

Acquisition: Land 80,000$
Escrow/Title 5,000$
Total Acquisition: 85,000$
Construction:

Contract with GC (incl profit, OH, gen conditions) 30,000$ Bond Premium -$
Construction Contingency 10% 3,000$
Total Construction: 33,000$
Costs:

Building Permit, License & Fees $82,500.00
Architect or Rehab Specialist - Specs/Estimates $16,000.00 Foundation/Grading $90,579.41
Plumbing $75,000.00
Electrical $50,000.00
Framing $88,750.00
Insulation $9,117.00
Stucco $28,477.40
Roofing $19,690.00
HVAC $20,000.00
Windows $13,750.00
Doors/ Exteriors/Garage $4,998.17
Drywall $23,750.00
Furniture Fixtures & Equipment $61,250.00
Interior Finished $14,750.00
Cabinets $26,250.00
Flooring $9,875.00
Concrete Flat work $27,000.00
Landscaping $41,250.00
contingency $1,998.00
Soft Cost Contingency 8% $55,998.96
PDC Q2-Family Rental Development Budget
Palmdale Dream Center
Developer Fee
Total Soft Costs: $793,983.94
Total Development Cost: $911,983.94
Sources
Supportable Debt (see Operating Budget) -$
Additional Sources of Funds:

Housing Authority Loan 80,000$
Owner/Investor Equity 10,000$
PLHA Loan/Grant 821,984$
Total Development Sources: 911,984$
Gap/(Or Excess Sources): (0)$
PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 4 – PLHA Note

ATTACHMENT NO. 4

PLHA NOTE

(behind this page)

PROMISSORY NOTE

SECURED BY DEED OF TRUST

TO THE CITY OF PALMDALE, CALIFORNIA
(A-8909)

0% Palmdale, California
$821,985.94 _________________, 2024

FOR VALUE RECEIVED, ADVANCING COMMUNITIES TOGETHER, a California nonprofit public benefit corporation (“Borrower”), hereby promises to pay to THE CITY OF PALMDALE, a municipal corporation of the S tate of California (“ City”), or order, a principal amount of Eight Hundred Twenty-One Thousand Nine Hundred Eighty-Five Dollars and Ninety- Four Cents ($821,985.94), or so much thereof as may be advanced by the City to the Borrower as the PLHA Loan pursuant to the Permanent Local Housing Allocation Funds Loan Agreement dated as of _______________, 2024, (the “ PLHA Loan Agreement”) between Borro wer (“Owner” therein) and the City , incorporated herein by this reference. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the PLHA Loan Agreement. Borrower shall pay interest at the rate, in the amount and at the time hereinafter provided.

1. This Promissory Note (“Note”) evidences the obligation of the Borrower to the City for the repayment of the PLHA Loan. This Promissory Note is made pursuant to the PLHA Loan Agreement. This Note is subject to the terms of the Regulatory Agreement, which will encumber the Property to secure performance of the covenants of the PLHA Loan Documents.

2. This Note is payable at the principal office of City, 38300 Sierra Highway, Palmdale, California 93550, or at such other place as the holder hereof may inform the Borrower in writing, in lawful money of the United States.

3. This Note shall be secured by the PLHA Deed of Trust.

4. This Note shall accrue simple interest at the rate of zero percent (0%) per annum on the principal amount outstanding, from the date of disbursement.

5. The entire unpaid principal balance of this Note and any accrued but unpaid interest shall be due and payable upon the date that is fifty -five (55) years from the date of this Note (“Maturity Date”) or upon the earlier occurrence of any of the following:

(a) the date the Property or any improvements thereon or any portion thereof or interest therein is sold, transferred, assigned or refinanced, without the prior written approval of the City, except as permitted by the provisions of the PLHA Loan Agreement; or PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 4 – PLHA Note Page 2

(b) the date on which there is a default by the Borrower under the terms of this Note, the PLHA Loan Agreement, the PLHA Deed of Trust, the Regulatory Agreement, or any deed of trust or other instrument securing a loan on the Property or any improvements thereon or any portion thereof or interest therein, which is not cured or waived within the respective time period provided herein and therein; or

(c) the date on which Borrower enters into or executes any loan, deed of trust, mortgage, financing, or refinancing the Property or any improvements thereon or any portion thereof or interest therein without the prior written approval of the City.

6. Except in the event of a default or event described in Section 5 hereof, no payments will be due and payable under this Note p rior to the Maturity Date . Upon the occurrence of an event of a default described in Section 5 hereof, the outstanding portion of the principal shall bear interest at the rate of the lesser of ten percent (10%), compounded annually, and the highest rate permitted by law.

7. Borrower may prepay this Note, or any part hereof, without penalty.

8. Prohibition Against Transfer.

(a) Prior to the repayment in full of the PLHA Loan, the Borrower will not assign or attempt to assign the PLHA Loan Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the improvements thereon, or any portion thereof or interest therein (referred to hereinafter as a “Transfer”), without prior written approval of the C ity, except as otherwise permitted in this Note or the PLHA Loan Agreement. Consent to one such transaction wi ll not be deemed to be a waiver of the right to require consent to future or successive transactions. If consent should be given, any such transfer will be subject to this Section 8, and any such transferee must assume all obligations hereunder and agree to be bound by all provisions contained herein.

(b) Any such proposed transferee must have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the C ity, to fulfill the obligations undertaken by Borrower in the PLHA Loan Agreement, the Regulatory Agreement, and this Note. Any such proposed transferee, by instrument in writing satisfactory to the City and in form recordable among the official records of Los Angeles County, for itself and its successors and assigns, and for the benefit of the C ity must expressly assume all of the obligations of the Borrower under the PLHA Loan Agreement, the Regulatory Agreement, and this Note, and agree to be subject to all conditions and restrictions applicable to the Borrower in the PLHA Loan Agreement, the Regulatory Agreement, and this Note. There will be submitted to the City for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the City its approval will be indicated to the Borrower in writing.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 4 – PLHA Note Page 3

(c) In the absence of specific written agreement by the C ity, no Transfer, or approval thereof by the City, will be deemed to relieve the Borrower or any other party from any obligations under the PLHA Loan Agreement, the PLHA Deed of Trust, the Regulatory Agreement, or this Note.
(d) In the event of a Transfer prior to the time the PLHA Loan is paid in full without the prior written consent of the City , the remaining principal balance of the PLHA Loan and all accrued but unpaid interest will be immediately due and payable. (i) As used herein, “Transfer” includes the sale, transfer or conveyance of the Property, any improvements thereon, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, or any agreement to do so; the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or the improvements; or the lease of all or substantially all of the Property or i mprovements, except the lease for occupancy of all or any part of the improvements on the Property in accordance with the PLHA Loan Agreement.
(ii) “Transfer” will also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Borrower, or any conversion of Borrower to an entity form other than that of Borrower at the time of execution of this Note, except for the following: (A) a cumulative change in the ownership interests of any individual limited liability company member of forty -nine percent or less will not be deemed a “Transfer” for purposes of this Note; and (B) a transfer of a portion or a majority of stock of any corporation to a trust formed in connection with a qualified employee ownership plan will not, by itself, be deemed to constitute a change in ownership for purposes of this Note. (iii) Notwithstanding paragraphs (i) and (ii), “Transfer” wi ll not include any Permitted Transfers, as defined in the PLHA Loan Agreement. (e) The City will not unreasonably withhold, condition or delay its approval of any matter for which its approval is required hereunder. D isapprovals will be in writing and contain the City’s reasons for disapproval.

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 und er 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 reasonable attorney’s fees, which may be incurred by the holder hereof, in the enforcement of this Note, the PLHA Deed of Trust or any term or provision of either.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 4 – PLHA Note Page 4

10. Upon the failure of Borrower to perform or observe any term or provision of this Note, or upon the occurrence of any event of default under the terms of the PLHA Loan Agreement or the Regulatory Agreement or the PLHA Deed of Trust, the holder may exercise its rights or remedies hereunder or thereunder.

11. Failure or delay by Borrower to perform any material term or provision of this Note, the PLHA Loan Agreement, the Regulatory Agreement, or the PLHA Deed of Trust constitutes a default under this Note.

(a) For defaults under this Note, the City shall give written notice of default to Borrower, specifying the default complained of by the City. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.

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

Delays by City in asserting any of its rights and remedies shall not deprive the City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.

(c) If a monetary event of default occurs under this Note , prior to exercising any remedies hereunder, the City shall give the Borrower written notice of such default. The Borrower shall have a period of ten (10) days after such notice is given within which to cure the default prior to exercise of remedies by the City.

(d) If a non -monetary event of default occurs under this Note , prior to exercising any remedies hereunder, the City shall give Borrower notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Borrower shall have such period to effect a cure prior to exercise of remedies by the City. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Borrower (i) initiates corrective 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 the City provided however in no event shall such additional time exceed ninety (90) days.

(f) A notice of default shall be deemed given only if either (i ) dispatched by first class mail, registered or certified, postage prepaid, return receipt requested, to the addresses specified for the Borrower in this Note, or (ii) by electronic facsimile transmission to the facsimile numbers specified for the Borrower in this Note, followed by delivery by the method described in clause (i), or (iii) by personal delivery (including by means of professional messenger or courier service such as United Parcel Service or Federal Express) to the addresses specified for the Borrower in this Note. Receipt shall be deemed to have occurred on the earlier of (i) the date of successfully completed electronic facsimile transmission or (ii) the date marked on a written postal PLHA Loan Agreement Agreement No. A-8909
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service or messenger or courier service receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). If either party gives notice of a change of address in the manner specified in this paragraph, 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.

(g) Cure periods hereunder shall not change, modify, or increase any cure periods under the PLHA Loan Agreement, the Regulatory Agreement, or the PLHA Deed of Trust.

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, the remaining obligations shall be completely performed and paid.

13. (a) The obligation to repay the PLHA Loan is a nonrecourse obligation of the Borrower and its partners. Neither the Borrower nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the loan. The sole recourse of the City with respe ct to repayment of the PLHA Loan shall be the exercise of its rights against the Property and the improvements and any related security for the PLHA Loan. Notwithstanding the foregoing, the City may:

(i) obtain a judgment or order (including, without limitation, an injunction) requiring Borrower or any other party to perform (or refrain from) specified acts other than repayment of the PLHA Loan; and

(ii) recover directly from Borrower or any other party:

(A) all damages, costs and expenses incurred by the City 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 or of any member of a general partner of Borrower;

(B) all damages, costs and expenses incurred by the City as a result of misappropriation of funds provided for the construction of the Improvements, as described in the PLHA Loan Agreement, rents and revenues from the operation of the Project , or proceeds of insurance policies or condemnation proceeds;

(C) all amounts owing by Borrower pursuant to Borrower ’s indemnification regarding Hazardous Materials provided to the City in connection with the PLHA Loan Agreement; and

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

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Attachment No. 4 – PLHA Note Page 6

14. (a) The address of Borrower for purposes of receiving notices pursuant to this Note is as follows: 38626 9th Street East, Palmdale, CA 93550.

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

“BORROWER”

ADVANCING COMMUNITIES TOGETHER,
a California nonprofit public benefit corporation

By:____________________________________
Rossie D. Cherry
Chief Executive Officer

By:____________________________________
Olivia Cherry
Executive Director

PLHA Loan Agreement Agreement No. A-8909
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Attachment No. 5 - PLHA Deed of Trust

ATTACHMENT NO. 5

PLHA DEED OF TRUST

(behind this page)

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 Requested
(Govt. Code §27383)

Advancing Communities Together Agreement No. A-8909
APN: 3008-010-904

DEED OF TRUST, SECURITY AGREEMENT, AND FIXTURE FILING (WITH

ASSIGNMENT OF RENTS) BY ADVANCING COMMUNITIES TOGETHER

FOR THE BENEFIT OF THE CITY OF PALMDALE
(PLHA LOAN)

This Deed of Trust, Security Agreement, and Fixture Filing (With Assignment of Rents) is given by ADVANCING COMMUNITIES TOGETHER, a California nonprofit public benefit corporation (hereinafter referred to as “ Trustor”) (whose address is 38626 9th Street East, Palmdale, California, 93550) , to _________________________, (hereinafter called “Trustee”), for the benefit of THE CITY OF PALMDALE, a municipal corporation of the state of California (hereinafter called “Beneficiary”), whose address is 38300 Sierra Highway, Palmdale, California 93550.

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 all present and future right, title and interest of Trustor in and to the following property (the “Trust Estate”):

(a) T hat 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”);

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(c) all tenements, hereditaments, appurtenances, privileges, franchises and other rights 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”);

(e) subject to the terms of the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management, operation leasi ng or occupancy of the Trust Estate, including those past due and unpaid (the “Rents”);

(f) 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

(g) all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or result ing from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and main tenance agreements, purchase and sale agreements and PLHA Loan Agreement Agreement No. A-8909
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purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow procee ds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types on 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 S ections 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 $821,985.94 executed by Trustor (“Borrower” therein) of approximately even date herewith (the “Promissory Note”);

(b) the Permanent Local Housing Allocation Funds Loan Agreement dated as of _______________, 2024 (the “Loan Agreement”), between Trustor and the Beneficiary;

(c) the Regulatory Agreement a nd Declaration of Restrictive Covenants between Trustor and Beneficiary, recorded concurrently herewith (“Regulatory Agreement”); and

(2) payment of indebtedness of the Trustor to the Beneficiary in the principal sum of $821,985.94 or so much thereof as shall be advanced, evidenced by the Promissory Note , with interest, according to the terms of the Promissory Note.

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Attachment No. 5 – PLHA Deed of Trust Page 4

The Loan Agreement , including all Attachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including the Regulatory Agreement , the Promissory Note , the Assignment of Rents, the Assignment of Agreements, and the UCC -1 financing statements, all as described in the Loan Agreement (collectively referred to as the “Secured Obligations ”) and all of their terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances evidenced by any note reciting that it is secured hereby. Any capitalized term that is not otherwise defined in this Deed of Trust shall have the meaning ascribed to such term in the Loan Agreement.

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

1. That Trustor shall pay the Promissory Note at the time and in the manner provided therein, and perform the obligations of the Developer 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 Regulatory Agreement;

3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable.

4. That, subject to the prior rights, if any, of a lender whose lien is senior to this Deed of Trust (each a “Senior Lender”), all rents, profits and income from the Trust Estate are hereby assigned to the 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 Loan 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;

6. That Trustor will keep the improvements hereafter constructed on the Subject Property in accordance with the Loan 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 the Beneficiary, and all such insurance shall be evidenced by standard fire and extended PLHA Loan Agreement Agreement No. A-8909
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Attachment No. 5 – PLHA Deed of Trust Page 5

coverage insurance policy or policies. In no event shall the amounts of coverage be less than 100 percent of the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies shall be deposited with the Beneficiary;

7. To pay, at least 10 days before delinquency, all 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 Trust. N otwithstanding 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 long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 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 and 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; not to permit or suffer any material alteration of or addition to the buildings or improvements hereafter constructed in or upon the Property without the consent of the 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 attorney’s 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 necessary expenses, employ counsel, and pay his reasona ble fees. Notwithstanding the foregoing, in the event of default under this Deed of Trust, the Beneficiary may also require Trustor PLHA Loan Agreement Agreement No. A-8909
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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;

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 the 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 of the lesser of ten percent (10%), compounded annually, and the highest rate permitted by law;

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 perform all the covenants, conditions, and agreements of said agreements, the principal sum and all arrears of interest, and other charges provided for in the Promissory Note shall at the option of the Beneficiary of this Deed of Trust become due and payable, anything contained herein to the contrary notwithstanding;

14. Trustor further covenants that it will 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 approved by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will 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 must first provide a written request, prior to foreclosure) record in the Office of the Recorder of Los Angeles County, a surety bond in an amount one -and-one-half (12) times the amount of such claim item to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary;

15. That any and all improvements 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 promul gated, now or hereafter, by lawful authority, and that the same will 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;

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16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of the 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.

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, subject to the rights of any Senior Lender , if any, 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.

Subject to the rights of any Senior Lender, if any, all such compensation, awards, damages, rights of action and proceeds which are not used to reconstruct, 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 expenses, including attorneys ’ 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 Promissory Note secured hereby. No amount applied to the reduction of the principal shall relieve the Trustor from making regular payments as required by the Promissory Note, if any;

18. Upon default by Trustor in making any payments provided for in the Promissory 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 Section 34 of this Deed of Trust, below, 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 defaul t and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed, the Note and all documents evidencing expenditures secured hereby;

19. a. Prior to the full reconveyance of this Deed of Trust and expiration of the term of the Regulatory Agreement , the Trustor shall not assign or attempt to assign the Loan Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Project thereon, or any portion thereof or interest therein (referred to hereinafter as a “Transfer”), without prior written approval of the Beneficiary, except as otherwise permitted in the Loan Agreement. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive PLHA Loan Agreement Agreement No. A-8909
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transactions. If consent should be given, any such transfer shall be subject to this Section 19, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein, subject to the provisions of paragraph e(3) of this Section 19.

b. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Beneficiary, to fulfill the obligations undertaken by Trustor in the Loan Agreement and the PLHA Loan Documents. Any such proposed transferee, by instrument in writing satisfactory to the Beneficiary and in form recordable among the land records of Los Angeles County, for itself and its successors and assigns, and for the benefit of the Beneficiary shall expressly assume all of the obligations of the Trustor under the Loan Agreement and the PLHA Loan Documents, and agree to be subject to all conditions and restrictions applicable to the Trustor in the PLHA Loan Documents , subject to the provisions of para graph e(3) of this Section 19. There shall be submitted to the Beneficiary for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Beneficiary its approval shall be indicated to the Trustor in writing.

c. In the absence of specific written agreement by the Beneficiary, no unauthorized Transfer, or approval thereof by the Beneficiary, shall be deemed to relieve the Trustor or any other party from any obligations under the Loan Agreement or any other PLHA Loan Document.

d. In the event of a Transfer prior to the full reconveyance of this Deed of Trust and expiration of the term of the Regulatory Agreement and without the prior written consent of the Beneficiary, the net proceeds (after repayment in full of any loan from a Senior Lender, if any, and the reconveyance of any and all deeds of trust from any Senior Lender, if any), shall be paid to the Beneficiary to the extent necessary to pay in full the accrued interest, if any, current interest and remaining principal balance of the PLHA Loan.

e. (1) As used herein, “Transfer” includes the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land 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, except as provided in subparagraph e(3) of this Section 19, below.

(2) “Transfer” shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor to an entity form other than that of Trustor at the time of execution of the Loan Agreement, except that a cumulative change in ownership interest of any general partner of forty-nine percent (49%) or less shall not be deemed a “Transfer” for purposes of this Deed of Trust.

PLHA Loan Agreement Agreement No. A-8909
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(3) Notwithstanding paragraphs (1) and (2), above, “Transfer” shall not include a Permitted Transfer to the extent permitted under the Loan Agreement or the conveyance of a security interest to the beneficiary of a deed of trust securing a loan approved by the City to be prior in right to the PLHA Loan, or the conveyance of title to the Property or Project in connection with a foreclosure, a deed in lieu of foreclosure or similar conversion of such senior loan;

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 all 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 public 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 f acts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reason able expenses of this 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; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee’s deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Promissory Note; (4) all other sums then secured hereby; and (5) 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 Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all t itle, 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, w hich, 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;

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23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied and after the expiration of the term of the Regulatory Agreement, and upon surrender of this Deed of Trust and the Promissory 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 Promissory 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 Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed o f 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 the 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 leases 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 financing the construction of improvements on the Property, including 2 dwelling units PLHA Loan Agreement Agreement No. A-8909
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of affordable housing for L ow Income households, and such dwelling units shall be occupied exclusively by such persons as set forth in the Secured Obligations.

30. Trustor agrees that upon sale or refinancing of the Project and/or P roperty or any interest therein 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. The obligation to repay the PLHA Loan is a nonrecourse obligation of the Trustor and its partners. Neither Trustor nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the loan. The sole recourse of Beneficiary shall be the exercise of its rights against the Property and any related security for the PLHA Loan.

Notwithstanding the foregoing, Beneficiary may recover directly from Trustor or from any other party:

(a) all damages, costs and expenses incurred by Beneficiary as a result of fraud or any criminal act or acts of Trustor or any partner, shareholder, officer, director or employee of Trustor, or of any general partner of Trustor , or of any member of a general partner of Trustor;

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

(c) any and all amounts owing by Trustor pursuant to the indemnification regarding Hazardous Materials pursuant to the Environmental Indemnity; and

(d) all court costs and attorneys’ fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions (provided that Beneficiary shall pay Trustor’s reasonable court costs and attorneys’ fees if Trustor is the prevailing party in such enforcement or collection action).

32. Notwithstanding specific provisions of this Deed of Trust, non -monetary performance hereunder shall not be deemed to be in default where delays or defaults are proximately caused by any of the following f orce majeure events, provided such event actually delays and interferes with the timely performance of the matter, and, despite the exercise of diligence and good business practices, such event is beyond the reasonable control of Trustor:

War; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 5 – PLHA Deed of Trust Page 12

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 party; acts or failure to act of any g overnmental authority (except acts or failure to act of the Beneficiary in its capacity as lender shall not excuse performance by the Beneficiary); the imposition of any applicable moratorium 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 party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a force majeure event unless and until Trustor delivers to Beneficiary written notice describing the event, its cause, when and how Trustor obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Trustor shall deliver such written notice within ten (10) business days after it obtains actual knowledge of the event.

33. If the rights and liens created by this Deed of Trust shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations, the unsecured portion of such obligations shall be completely performed a nd 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) Subject to the extensions of time set forth in Section 32, and subject to the further provisions of this Section 34, failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or this De ed of Trust constitutes a default under this Deed of Trust.

(b) Beneficiary shall give written notice of default to Trustor, specifying the default complained of by the 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 it s 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, prior to exercising any remedies hereunder, Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of ten (10) 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, prior to exercising any remedies hereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably PLHA Loan Agreement Agreement No. A-8909
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Attachment No. 5 – PLHA Deed of Trust Page 13

capable of being cured within thirty (30) days, 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 of being cured within thirty (30) days, and Trustor (i) initiates corrective 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. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days afte r the first notice of default is given.

(f) Except as otherwise required to comply with the provisions of California Civil Code Section 2924 et seq. that are applicable thereto, 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.

35. In the event of a default or breach by Trustor of a security instrument securing a deed of trust securing any loan from any Senior Lender, if any, Beneficiary shall have the right to cure the default prior to completion of any foreclosure. In such event, Beneficiary shall be entitled to reimbursement by Trustor of all costs and expenses incurred by Beneficiary in curing the default.

The amount of all such disbursements shall be a lien against the Property and added to the obligation secured by this Deed of Trust until repaid, with interest at the highest rate permitted by law.

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PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 5 – PLHA Deed of Trust Page S-1

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

“TRUSTOR”

ADVANCING COMMUNITIES TOGETHER,
a California nonprofit public benefit corporation

By:____________________________________
Rossie D. Cherry
Chief Executive Officer

By:____________________________________
Olivia Cherry
Executive Director
PLHA Loan Agreement Agreement No. A-_____
Advancing Communities Together APN: 3008-010-904
Attachment No. 5 – PLHA Deed of Trust Exhibit A – Legal Description

Exhibit A

LEGAL DESCRIPTION

REAL PROPERTY IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

THE PARCEL OF LAND IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AS SHOWN AS LOT 20 15 OF TRACT NO. 15912 RECORDED IN BOOK 426 PAGES 13 AND 14 OF MAPS, IN T HE OFFICE OF THE COUNTY RECORDER

OF SAID COUNTY

APN: 3008-010-904

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 6 – Assignment of Agreements

ATTACHMENT NO. 6

ASSIGNMENT OF AGREEMENTS

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ASSIGNMENT OF AGREEMENTS, PLANS,

SPECIFICATIONS AND ENTITLEMENTS
(Agreement No. A-8909)

FOR VALUE RECEIVED, the undersigned, ADVANCING COMMUNITIES TOGETHER, a California nonprofit public benefit corporation (“Owner”), pursuant to that certain Permanent Local Housing Allocation Funds Loan Agreement between Owner and THE CITY OF PALMDALE, a municipal corporation (“City”), dated as of __________________, 2024, as it may be amended or modified from time to time (“ PLHA Loan Agreement ”), hereby assigns to the City all of Owner’s rights and interest, but not its obligations, in, under and to the following, as they relate to the Project (defined in the PLHA Loan Agreement), as of _________________, 2024 (“Effective Date”):

1. All architectural, design, engineering, or development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, “Architectural or Engineering Agreements”) heretofore or hereafter entered into or prepared by any Architect/Engineer, engineer or other person or entity (collectively “Architect/Engineer(s)”), for or on behalf of Owner in connection with the development of the Project;

2. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively “ Plans and Specifications”) heretofore or hereafter prepared by any architect, engineer or other person or entity (collectively “Architect/Engineer(s)”), for or on behalf of Owner in connection with the construction and rehabilitation of the Project; and

3. All governmental permits, approvals and entitlements (collectively “Entitlements”) relating to the development and operation of the Project heretofore or hereafter granted by the City of Palmdale or any other governmental authority having jurisdiction over the Property (as defined in the PLHA Loan Agreement).

The Architectural or Engineering Agreements, Plans and Specifications and Entitlements consist of those which Owner has heretofore entered into, received or obtained and shall include but not be limited to those described in the Schedule of Architectural a nd Engineering Agreements, Plans and Specifications and Entitlements attached to this Assignment as Exhibit A.

This ASSIGNMENT OF AGREEMENTS, PLANS AND SPECIFICATIONS AND ENTITLEMENTS (“Assignment”) constitutes a present and absolute assignment to City as of the Effective Date. Owner represents and warrants to City , as of the Effective Date, that, to the actual knowledge of Owner: (a) all Architectural or Engineering Agreements entered into by Owner are in full force and effect and are enforceable in accordance with their terms and no default, or event which would c onstitute a default after notice or the passage of time, or both, exists with respect to said Architectural or Engineering Agreements; (b) all copies of the Architectural or Engineering Agreements and Plans and Specifications delivered to City are complete and correct copies; and (c) Owner has not assigned any of its rights under the Architectural and Engineering Agreements or with respect to the Plans and Specifications, except as previously disclosed in writing and approved by City.

This Assignment shall be governed by the laws of the State of California, except to the extent that federal laws preempt the laws of the State of California, and Owner 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.

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Attachment No. 6 – Assignment of Agreements

This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors in interest of Owner and City.

The attached Consent, Schedule 1, and Exhibit A are incorporated by reference.

“OWNER”

ADVANCING COMMUNITIES TOGETHER,
a California nonprofit public benefit corporation

By:____________________________________
Rossie D. Cherry
Chief Executive Officer

By:____________________________________
Olivia Cherry
Executive Director

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 6 – Assignment of Agreements
Consent

CONSENT

[TO BE ADDED FOR EACH ARCHITECT, LANDSCAPE ARCHITECT AND ENGINEER PREPARING PLANS FOR THE PROJECT]

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

Architect/Engineer agrees that if City shall become the owner of said Property and elects to undertake or the construction of the Project on any portion of the Property, in accordance with the Plans and Specifications, and gives Architect/Engineer written notice of such election; THEN, so long as Architect/Engineer has received, receives or continues to receive the compensation called for under the Architectural or Engineering Agreements, City may, at its option, use and rely on the Plans and Specifications for the purposes for which they were prepared, and Architect/Engineer will continue to perform its obligations under the Architectural or Engineering Agreements for the benefit and account of City in the same manner as if performed for the benefit or account of Owner in the absence of the Assignment.

Architect/Engineer warrants and represents that they have no knowledge of any prior assignment(s) of any interest in either the Plans and Specifications and/or the Architectural or Engineering Agreements except to the City of Palmdale on or about the date hereof. Except as otherwise defined herein, the terms used herein shall have the meanings given them in the Assignment.

Executed on ______________, 2024.

ARCHITECT/ENGINEER:

By: _______________________

Architect/Engineer’s Address: ____________________
____________________
____________________

City’s Address:

CITY OF PALMDALE
Attn: City Manager
38300 Sierra Highway
Palmdale, California 93550
PLHA Loan Agreement Agreement No: A-8909
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Attachment No. 6 – Assignment of Agreements
Schedule 1 – Schedule of Unpaid Claims

SCHEDULE 1 TO ASSIGNMENT

SCHEDULE OF UNPAID CLAIMS

Schedule 1 to Assignment of Agreements, Plans and Specifications and Entitlements dated as of , 2024 by and between ADVANCING COMMUNITIES TOGETHER as “Owner”, and THE CITY OF PALMDALE, as “City”.

PLHA Loan Agreement Agreement No: A-8908
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Attachment No. 6 – Assignment of Agreements
Exhibit A – List of Agreements, Plans, and Entitlements

EXHIBIT A

LIST OF ARCHITECTURAL OR ENGINEERING AGREEMENTS, PLANS AND

SPECIFICATIONS AND ENTITLEMENTS

[to be inserted]
PLHA Loan Agreement Agreement No. A8909
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Attachment No. 7 – Environmental Indemnity

ATTACHMENT NO. 7

ENVIRONMENTAL INDEMNITY

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ENVIRONMENTAL INDEMNITY BY ADVANCING COMMUNITIES TOGETHER

IN FAVOR OF THE CITY OF PALMDALE
(A-8909)

THIS ENVIRONMENTAL INDEMNITY ( “Indemnity”), dated as of ________________, 2024, is made by ADVANCING COMMUNITIES TOGETHER, a California nonprofit public benefit corporation (“Borrower”), whose address for purposes of giving notice is 38626 9th Street East, Palmdale, California, 93550, in favor of THE CITY OF PALMDALE (the “City”), whose address for purposes of giving notice is 38300 Sierra Highway, Palmdale, California 93550.

WITNESSETH

WHEREAS, Borrower is the owner of the real property in the City of Palmdale described on Exhibit A attached hereto and made a part hereof, and the real property improvements thereon (collectively referred to as the “Property”);

WHEREAS, Borrower and the City entered into that certain Permanent Local Housing Allocation Funds Loan Agreement , dated as of ____________________, 2024, as it may be amended from time to time (“PLHA Loan Agreement”), pursuant to which City agreed to loan funds to Borrower to construct the Project on the Property (the “Loan ”) (the PLHA Loan Agreement and the documents and instruments referred to therein which are being executed by Borrower concurrently herewith are referred to collectively as the “City Documents”); and

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

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

1. DEFINITIONS

For the purpose of this Indemnity, “Hazardous Materials” or “Hazardous Substances” shall include, but not be limited to, 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 11001-11050; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, 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 “infectious waste” in Section 25117.5 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 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 PLHA Loan Agreement with the same force and effect as if set forth in full below.

PLHA Loan Agreement Agreement No: A-8909
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Attachment No. 7 – Environmental Indemnity

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, 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 City and that any such release or disposal shall be effected in strict compliance with all applicable laws and all conditions, if any, established by City.

(d) City shall have the right, at any time, to conduct an environmental audit of the Property at City’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 prior notice has been given to Borrower and only in the presence of a representative of Borrower. Borrower shall give City and its agents and employees access to the Property to remove, or otherwise to mitigate against the effects of, Hazardous Materials.

(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 in the Pr operty, 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 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, City 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 (as hereinafter defined) of Borrower under this Section 2.

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Attachment No. 7 – Environmental Indemnity

(f) Borrower shall immediately advise City in writing of any of the following:
(i) any pending or threatened environmental claim against Borrower or 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 reaso nably be anticipated to form the basis of an envi ron- mental claim against the Property or Borrower.

2.2 Indemnity. Borrower shall indemnify, protect, and hold City and its employees, officers, agents and consultants harmless from and against any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, 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 City or its employees, officers, agents and consultants, or any of them, 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 City or its employees, officers, agents and consultants, or any of them, of any of the provisions of this Section 2.2 or the assertion by Borrower of any defense to its obligations hereunder.

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 City Documents or affecting any of the rights of City with respect thereto. The obligations of Borrower hereunder shall be absolute and unconditional irrespective of:

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

(b) Any alteration, amendment, modification, release, termination, or cancellation of any of the City Documents, or any change in the time, manner, or place of payment or performance of, or in any other term in respect of, all or any of the obligations of Borrower contained in any of the City Documents;
PLHA Loan Agreement Agreement No: A-8909
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Attachment No. 7 – Environmental Indemnity

(c) Any extension of the maturity of the Loan or any waiver of, or consent to any departure from, any provision contained in any of the City Documents;

(d) Any exculpatory provision in any of the City Documents limiting City ’s recourse to property encumbered by the Deed of Trust securing the Loan, or to any other security, or limiting City’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 Loan, or any release, amendment, waiver of, or consent to any departure from any provision of, any other Borrower or guarantee given in respect of the Loan;

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

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

3.2 Continuation. This Indemnity (a) 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 Loan or the release or other extinguishment of the City Deed of Trust securing the Borrower’s obligations under the City Documents; and (b) 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 City upon the insolvency, bankruptcy, or reorganization of Borrower, 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 City Documents, this Indemnity shall not terminate if any of the following shall have occurred:

(a) City has at any time or in any manner substantially participated in the management or control of, taken possession of (whether personally, by agent or by appointment of a receiver), 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 Obli gations, notwithstanding the fact that no event, circumstance, or condition of the nature described in paragraph (a) above ever occurred.

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Attachment No. 7 – Environmental Indemnity

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 City , Borrower, or any other interested party under any 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 relievi ng 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 City protect, secure, perfect, or insure any security interest or lien in or on any property subject thereto;

(g) Any requirement that City 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 City to file or enforce any claim against the estate (in probate, bankruptcy, or any other proceedings) of any person or persons; or

(3) Any defense based upon an election of remedies by City, 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 Borrower to proceed against Borrower.

5. NOTICES
Any notice, demand, statement, request, or consent made hereunder shall be in writing and shall be personally served or mailed by first -class certified mail, return receipt requested, to the address set forth in the first paragraph of this Indemnity, above, of the party to whom such notice PLHA Loan Agreement Agreement No: A-8909
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Attachment No. 7 – Environmental Indemnity

is to be given (or to such other address as the parties hereto shall designate in writing). 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 first-class certified mail, return receipt requested 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 City 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 Borrower and City , 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 City , 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 City to exercise, and no delay in exercising, any right hereunder or under any other 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 City provided herein and in the other City Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.

The rights of City under any Loan Document against any party thereto are not conditional or contingent on any attempt by City to exercise any of its rights under any other 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 (a) be binding upon Borrower, and Borrower’s successors and assigns; and (b) inure, together with all rights and remedies of City hereunder, to the benefit of City, their respective directors, officers, employees, and agents, any successors to City ’s interest in the Property, any other person who acquires any portion of the Property at a foreclosure sale or otherwise through the exercise of City ’s rights and remedies under the City Documents, any successors to any such person, and all directors, officers, employees, and agents of all of the aforementioned parties. Without limiting the generality of clause (b) of the immediately preceding sentence, City may, subject to, and in accordance with, the provisions of the City Documents, assign or otherwise transfer all or any portion of its rights and obligations under any other Loan Document, to any other person, and such other person shall thereupon become vested with all of the rights and obligations in respect thereof that were granted to City herein or otherwise. None of PLHA Loan Agreement Agreement No: A-8909
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the rights or obligations of Borrower hereunder may be assigned or otherwise transferred without the prior written consent of City.

6.6 Borrower hereby (a) 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, (b) waives any defense based on doctrines of venue or forum non conveniens or similar rules or doctrines, and (c) 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 t o the service 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 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 document 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 Except to the extent that the laws of the United States preempt the laws of the State of California, t his 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, without reference to the legal principles governing conflicts of law.

6.9 This Indemnity may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one agreement.

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Attachment No. 7 – Environmental Indemnity

S-1
IN WITNESS WHEREOF, Borrower has duly executed this Indemnity as of the date first set forth above.

“BORROWER”

ADVANCING COMMUNITIES TOGETHER,
a California nonprofit public benefit corporation

By:____________________________________
Rossie D. Cherry
Chief Executive Officer

By:____________________________________
Olivia Cherry
Executive Director

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 7 – Environmental Indemnity
Exhibit A – Legal Description

EXHIBIT A

LEGAL DESCRIPTION

REAL PROPERTY IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

THE PARCEL OF LAND IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AS SHOWN AS LOT 20 15 OF TRACT NO. 15912 RECORDED IN BOOK 426 PAGES 13 AND 14 OF MAPS, IN THE OFFICE OF THE COUNTY

RECORDER OF SAID COUNTY

Assessor’s Parcel No: 3008-010-904

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

ATTACHMENT NO. 8

ASSIGNMENT OF RENTS

(behind this page)

OFFICIAL BUSINESS
Document entitled to free
recording per Government
Code Section 27383

Recording Requested by
And When Recorded Mail to:

CITY OF PALMDALE
38300 Sierra Highway
Palmdale, California 93550

SPACE ABOVE THIS LINE FOR RECORDER’S USE

APN 3008-010-904 Agreement No. A-8909

ASSIGNMENT OF RENTS AND LEASES
THIS ASSIGNMENT OF RENTS AND LEASES (“Assignment”) is made as of , 2024 by ADVANCING COMMUNITIES TOGETHER, a California nonprofit public benefit corporation (“ Owner”), in favor of the CITY OF PALMDALE, a municipal corporation, its successors, and assigns (collectively, the “City”).

RECITALS
A. Owner is the owner of a fee interest in and to the real property described in Exhibit A attached hereto, and the owner of all of the personalty, fixtures, and improvements now or hereafter located thereon or attached thereto now existing or to be constructed thereon. Said real property, personalty, fixtures, and the improvements are herein referred to collectively as the “Premises”.

B. City has agreed to loan funds to Owner pursuant to the terms of that certa in Permanent Local Housing Allocation Funds Loan Agreement by and between the City and Owner dated ________, 2024, as it may be amended or modified from time to time (the “PLHA Loan Agreement”). In accordance with the PLHA Loan Agreement, the Owner agreed to record against the Premises that certain Regulatory Agreement and Declaration of Restrictive Covenants dated on or about the date hereof by and between the Owner and the City (“Regulatory Agreement”).

The performance obligations by the Owner under the PLHA Loan Agreement , including the Regulatory Agreement and the PLHA Note (collectively, the “Secured Obligations”) are secured by that certain Deed of Trust, Security Agreement and Fixture Filing, of even date herewith, executed by Owner, as Trustor, for the benefit of City, as Beneficiary (the “Deed of Trust”).

C. In order to induce City to loan funds to Owner and enter into the PLHA Loan Agreement, Owner has agreed to execute this Assignment.

NOW, THEREFORE, with reference to the foregoing and in reliance thereon and for good and valuable consideration, the receipt of which is hereby acknowledged, Owner agrees as follows:

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

AGREEMENT

1. All initially capitalized terms used herein, unless otherwise defined or required by context, shall have the meaning ascribed to them in the PLHA Loan Agreement.

2. Subject to the prior rights, if any, of a lender whose lien is senior to the Deed of Trust held by Assignee, if any (“Senior Lender”), Owner hereby absolutely grants, sells, assigns, transfers, and sets over to City, by this Assignment, all of Owner’s interests, whether now existing or hereafter acquired, in all leases and other occupancy agreements of any nature, now or hereafter covering all or any part of the Premises, together with all extensions, renewals, modifications, or replacements of said leases and occupancy agreement s, and together with any and all guarantees of the obligations of the lessees and occupants (“ Lessees”) thereunder, whether now existing or hereafter executed, and all extensions and renewals of said guarantees. (Said leases and occupancy agreements, together with any and all guarantees, modifications, extensions and renewals thereof, are hereinafter referred to collectively as the “Leases” and individually as a “Lease”.)

3. Owner’s purpose in making this Assignment is to relinquish to City its right to collect and enjoy the rents, royalties, issues, profits, income, and other benefits at any time accruing by virtue of the Leases (hereinafter called “Rents and Profits”).

4. The parties intend that this Assignment shall be a present, absolute and unconditional assignment, and shall, immediately upon execution, give the City the right to collect the Rents and Profits and to apply them in payment of the principal and interest and all other sums payable on the obligations under the Secured Obligations, as well as all other sums payable under the Deed of Trust or any other instrument given as security for the Secured Obligations. However, the City hereby grants to Owner a license t o collect and use, subject to the provisions set forth below, the Rents and Profits as they respectively become due and to enforce the Leases, so long as there is no default by Owner in performance of the terms, covenants, or provisions of the Deed of Trus t, the PLHA Loan Agreement , the PLHA Note, the Regulatory Agreement , or this Assignment, after the expiration of any applicable notice and cure periods. Nothing contained herein, nor any collection of Rents and Profits by City or by a receiver, shall be construed to make City a “mortgagee in possession” of the Premises so long as City has not entered into actual possession of the Premises.

5. Upon the occurrence of any default under the terms and conditions of this Assignment, the Deed of Trust, or the Secured Obligations , after the expiration of any applicable notice and cure periods, this Assignment shall constitute a direction and full authority to each Lessee under any Lease and each guarantor of any Lease to pay all Rents and Profits to City without proof of the default relied upon. Owner hereby irrevocably authorizes each Lessee and guarantor to rely upon and comply with any notice or dema nd by City for the payment to City of any Rents and Profits due or to become due.

6. Owner represents and warrants as to each Lease now or hereafter covering all or any portion of the Premises, unless City has been otherwise advised in writing by Owner:
a. That each Lease is in full force and effect;
PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

b. That no material default exists on the part of the Lessee thereunder or Owner;
c. That no rent in excess of one month’s rent has been collected in advance; d. That no Lease or any interest therein has been previously assigned or pledged, except to the extent required by the maker of a Senior Loan; e. That no Lessee under any Lease has any defense, setoff or counterclaim against Owner; and
f. That all rent due to date under each Lease has been collected and no concession has been granted to any Lessee in the form of a waiver, release, reduction, discount, or other alteration of rent due or to become due except as previously disclosed to Owner in writing.

7. Owner agrees with respect to each Lease:
a. If any Lease provides for a security deposit paid by the Lessee to Owner, and subject to the prior rights, if any, of a Senior Lender, this Assignment, subject to any prior assignment to any Senior Lender, transfers to City all of Owner’s right, title, and interest in and to each such security deposit; provided, however, that Owner shall have the right to retain said security deposit so long as Owner is not in default, after the expiration of any applicable notice and cure periods, under this Assignment, the Deed of Trust, or the Secured Obligations ; and provided further that City shall have no obligation to the Lessee with respect to such security deposit unless and until City comes into actual possession and control of said security deposit. b. If any Lease provides for the abatement of rent during repair of the leased premises by reason of fire or other casualty, Owner shall furnish rental insurance to City , the policies to be with companies and in form, content, policy limits, and terms as are customary in the case of entities owning similar property or assets similarly situated. c. Each Lease shall remain in full force and effect despite any merger of the interest of Owner and any Lessee thereunder. Owner shall not terminate any Lease (except pursuant to the terms of the Lease upon a default by any Lessee thereunder), or materially modify or amend any Lease or any of the terms thereof, or grant any concessions in connection therewith or accept a surrender thereof, without the prior written consent of City, which consent shall not be unreasonably withheld.
d. Owner shall not hereafter execute any Lease, the terms and conditions of which have not been previously approved in writing by City , which approval shall not be unreasonably withheld or delayed.
e. Owner shall not collect any Rents and Profits more than thirty (30) days in advance of the date on which they become due under the terms of any Lease. f. Owner shall not discount any future accruing Rents and Profits.

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

g. Owner shall not consent to any assignment of any Lease, or any subletting thereunder, whether or not in accordance with its terms, on any terms less favorable than those that would reflect an arm’s length transaction in light of prevailing market conditions (subject to the rent restrictions applicable to the Premises), without the prior written consent of City. h. Owner shall not execute any further assignment of any of the Rents and Profits or any interest therein or suffer or permit any such assignment to occur by operation of law, except to any Senior Lender.
i. Owner shall not request, consent to, agree to, or accept a subordination of any Lease to any mortgage, deed of trust or other encumbrance, or any other lease, now or hereafter affecting the Premises or any part thereof, or suffer or permit conversion of any Lease to a sublease, without City’s prior written consent.
j. Owner shall faithfully perform and discharge all obligations of the lessor under each Lease, and shall give prompt written notice to City of any notice of Owner’s default received from any Lessee or any other person and furnish City with a complete copy of said notice.

Owner shall appear in and defend, at no cost to City, any action or proceeding arising under or in any manner connected with any Lease. If requested by City , Owner shall enforce each Lease and all remedies available to Owner against the Lesse e in the case of default under the Lease by the Lessee.
k. Any Lease of a part of the Premises shall, upon written notice from City to Owner, be deemed included in this Assignment as though originally listed herein. l. At City’s option, Owner shall not hire, retain, or contract with any third party for property management services with respect to the Premises, without the prior written approval of City of such party and the terms of its contract for management services. m. Nothing herein shall be construed to impose any liability or obligation on City under or with respect to any Lease. Owner shall indemnify, defend, and hold City and its officers, directors, agents, employees, and representatives (collectively, the “ Indemnitees” and individually an “ Indemnitee”) harmless from and against any and all liabilities, losses, and damages that any Indemnitee may incur under any Lease or by reason of this Assignment, and of and from any and all claims and demands whatsoever that may be asserted against any Indemnitee by reason of any alleged obligations to be performed or discharged by City under any Lease or this Assignment, unless any of the foregoing arises from or results from the gross negligence or willful misconduct of any Indemnitee. Should any Indemnitee incur any liability, loss, or damage under any Lease or by reason of this Assignment and such liability, loss, or damage falls within the foregoing indemnification, Owner shall immediately upon demand reimburse such Indemnitee for the amount thereof together with all costs and expenses and reasonable attorneys’ fees) and court costs incurred by such Indemnitee. All of the foregoing sums shall bear interest at the maximum rate permitted by law from demand by Indemnitee until paid. Any Rents and Profits collected by City may be applied by City, in its discretion, in satisfaction of any such liability, loss, damage, claim, demand, cost, expense, or fees.

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

8. Owner hereby grants to City the following rights, subject to any prior assignment to any Senior Lender:
a. Upon the occurrence of any default under the terms and conditions of this Assignment, the Deed of Trust, or the Secured Obligations , after the expiration of any applicable notice and cure periods, City shall be deemed to be the creditor of each Lessee in respect of any assignments for the benefit of creditors and any bankruptcy, arrangement, reorganization, insolvency, dissolution, receivership, or other debtor relief proceedings affecting such Lessee, without obligation on the part of City , however, to fil e timely claims in such proceedings or otherwise pursue creditor’s rights therein.
b. City shall have the right to assign Owner’s right, title, and interest in the Leases to any subsequent holder of the Deed of Trust or any participating interest therein or to any person acquiring title to all or any part of the Premises through foreclosure or otherwise. Any subsequent City shall have all the rights and powers herein provided to City. c. City shall have the right (but not the obligation), upon the occurrence of any default under the terms and conditions of this Assignment, the Deed of Trust, or the Secured Obligations, after the expiration of any applicable notice and cure periods, to take any action as City may deem necessary or appropriate to protect its security, including but not limited to appearing in any action or proceeding and performing any obligations of the lessor under any Lease; and Owner agrees to pay, on demand, all costs and expenses, including without limitation reasonable attorneys’ fees and court costs incurred by City in connection therewith, together with interest thereon at the rate of ten percent (10%) per annum. d. Upon the occurrence of any default under the terms and conditions of this Assignment, the Deed of Trust, or the Secured Obligations , after the expiration of any applicable notice and cure periods, and without notice to or consent of Owner, City shall have the following rights (none of which shall be construed to be obligations of City):
e. City shall have the right under this Assignment to use and possess, without rental or charge, the fixtures, equipment, and personal property of the Owner located in or on the Premises and used in the operation or occupancy thereof. City shall have the right to apply any of the Rents and Profits to pay installments due for personal property rented or purchased on credit, insurance premiums on personal property, or other charges relating to personal property in or on the Premises. However, this Assignment sha ll not make City responsible for the control, care, management, or repair of the Premises or any personal property or for the carrying out of any of the terms or provisions of any Lease.
f. City shall have the right to apply the Rents and Profits and any sums recovered by City hereunder to the outstanding obligations under the Secured Obligations, as well as to charges for taxes, insurance, improvements, maintenance, and other items relating to the operation of the Premises.
g. City shall have the right to take possession of the Premises, manage and operate the Premises and Owner’s business thereon, and to take possession of and use all books of PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

account and financial records of Owner and its property managers or representatives relating to the Premises.
h. City shall have the right to execute new Leases of any part of the Premises, including Leases that extend beyond the term of the Deed of Trust. i. City shall have the right to cancel or alter any existing Leases. ii. City shall have the irrevocable authority, as Owner’s attorney -in- fact, such authority being coupled with an interest, to sign the name of Owner and to bind Owner on all papers and documents relating to the operation, leasing and maintenance of the Premises. i. All of the foregoing rights and remedies of City are cumulative, and City shall also have upon the occurrence of any such default all other rights and remedies provided under this Assignment, the Secured Obligations , the Deed of Trust, or other agreement between Owner and City, or otherwise available at law or in equity or by statute. Failure of City to avail itself of any terms, covenants, or conditions of this Assignment for any period of time or for any reason shall not constitute a waiver thereof.

9. Notwithstanding any future modification of the terms of the Deed of Trust, the Secured Obligations, or this Assignment and the rights and benefits hereby assigned and granted shall continue in favor of City in accordance with the terms of this Assignment.

10. This Assignment shall be binding upon and inure to the benefit of the respective heirs, legal representatives, successors, and assigns of the parties hereto (including without limitation in the case of City , any third parties now or hereafter acquiring any interest in the Secured Obligations or other obligations of Owner under the Deed of Trust or a part thereof, whether by virtue of assignment, participation, or otherwise). The words Owner, City, and Lessee, wherever used herein, shall include the persons and entities named herein or in any Lease and designated as such and their respective heirs, legal representatives, successors and assigns, provided that any action taken by the named City or any successor, designated as such by an instrument recorded in the Official Records of Los Angeles County, California, referring to this Assignment, shall be sufficient for all purposes notwithstanding that City may have theretofore assigned or participated any interest in the obligation to a third party. All words and phrases shall be taken to include the singular or plural number, and the masculine, feminine, or neuter gender, as may fit the case.

11. Any change, amendment, modification, abridgment, cancellation, or discharge of this Assignment or any term or provision hereof shall be invalid without the written consent of City.

12. Upon satisfaction of the obligations secured hereby and Deed of Trust, as evidenced by a recorded satisfaction or release of the Deed of Trust, this Assignment shall be void and of no further effect.

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

13. All notices, demands, approvals, and other communications provided for in this Assignment shall be in writing and be delivered by personal delivery or certified U.S. mail with return receipt requested to the appropriate party at its address as follows:

If to Owner: Advancing Communities Together
38626 9th Street East
Palmdale, California 93550

If to City: City of Palmdale
38300 Sierra Highway
Palmdale, California 93550
Attn: City Manager
Addresses for notice may be changed from time to time by written notice to all other parties. 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 first -class certified mail, return receipt requested shall be deemed received on the date of receipt thereof.

14. This Assignment shall be recorded in the Official Records of Los Angeles County, California, and Owner shall pay all fees, charges, costs, and expenses of such recording.

15. If any provision hereof is determined to be illegal or unenforceable for any reason, the remaining provisions hereof shall not be affected thereby.

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

17. If City should bring any action to enforce its rights hereunder at law or at equity, Owner shall reimburse City for all attorneys’ fees and costs expended in connection therewith. [Remainder of Page Intentionally Left Blank; Signatures on Following Page]

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents

S-1

IN WITNESS WHEREOF, the undersigned Owner has executed this Assignment as of the date first above written.

“BORROWER”

ADVANCING COMMUNITIES TOGETHER,
a California nonprofit public benefit corporation

By:____________________________________
Rossie D. Cherry
Chief Executive Officer

By:____________________________________
Olivia Cherry
Executive Director

PLHA Loan Agreement Agreement No: A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 8 – Assignment of Rents
Exhibit A – Legal Description

EXHIBIT A

LEGAL DESCRIPTION

REAL PROPERTY IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

THE PARCEL OF LAND IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AS SHOWN AS LOT 20 15 OF TRACT NO. 15912 RECORDED IN BOOK 426 PAGES 13 AND 14 OF MAPS, IN THE OFFICE OF THE COUNTY

RECORDER OF SAID COUNTY

Assessor’s Parcel No: 3008-010-904

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 9 – Regulatory Agreement

ATTACHMENT NO. 9

REGULATORY AGREEMENT

(behind this page)

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 Requested
(Govt. Code §27383)

Advancing Communities Together Agreement No. A-8909
APN: 3008-010-904

REGULATORY AGREEMENT AND DECLARATION

OF RESTRICTIVE COVENANTS
Permanent Local Housing Allocation Funds Loan

THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (“Agreement”) is entered into as of ______________________, 2024 by and between THE CITY OF PALMDALE, a municipal corporation (“ City”), and ADVANCING COMMUNITIES TOGETHER, a California nonprofit public benefit corporation (“Owner”), as follows:

RECITALS

A. Owner is the fee owner of that certain vacant property located at a cul-de-sac on E Avenue Q-2 between Avenue Q and E Avenue Q3 and east of 5th Street E, in the City of Palmdale, California (the “Property ”), which is legally described in Exhibit “A” attached hereto and incorporated herein by reference.

B. Owner is required to develop on the Property an affordable residential rental development for hereinafter defined Low Income H ouseholds, consisting of a duplex rental apartment with two (2) two-story units (3 bedrooms/ 2 bath per unit) (“Project”). For the purpose of development of rental housing that is affordable to Low Income Households (as defined herein), City has provided financial assistance for the development of the Project from funds (the “PLHA Funds”) received from the California Department of H ousing and Community Development (“HCD”) from the Permanent Local Housing Allocation (“PLHA”) program.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 9 – Regulatory Agreement Page 2

C. In accordance with the Permanent Local Housing Allocation Program Guidelines adopted by HCD with regard to the use of the PLHA Funds, City and Owner enter into this Agreement which imposes income and affordability requirements.

D. The City has agreed to make the PLHA Funds available for the Project on the condition that the Property be maintained and operated in accordance with Health and Safety Code Section 50470 and guidelines promulgated thereunder, and in accordance with restrictions concerning affordability, operation, and maintenance of the Property, as specified in this Agreement.

E. In consideration of receipt of the financial assistance of the PLHA Funds to the Project, Owner has further agreed to observe all the terms and conditions set forth below.

F. Owner is willing to impose the conditions, covenants, restrictions and agreements set forth in this Agreement upon the ownership and operation of the Property and the Project that will bind the Property, the Project, Owner and Owner’s successors and assigns.

THEREFORE, the City and the Owner hereby agree as follows.

ARTICLE 1 DEFINITIONS

1.1 Definitions

When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Article 1.

(a) “Affordable Rent” shall comply with the PLHA Guidelines and shall mean gross monthly Rent that does not exceed the maximum monthly rent for an individual or household with a household income equal to or less than sixty percent (60%) of the then current Area Median Income adjusted for family size appropriate for the unit, as published by from time to time by TCAC.

(b) “Area Median Income ” or “AMI ” means the median gross income for Los Angeles County as determined by the Secretary of the Treasury of the United States for purposes of Section 42 of the Internal Revenue Code of 1986, and any related regulations published from time to time by TCAC.

(c) “City Assisted Unit” (in the aggregate, referred to herein as “City Assisted Units”) means each of the two (2) two- story units (3 bedrooms/ 2 bath per unit) in the duplex rental apartment to be constructed on the Property and rented exclusively to and occupied by Low Income Households at Affordable Rent which are restricted herein.

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 9 – Regulatory Agreement Page 3

(d) “Deed of Trust” means the deed of trust to the City recorded against the Property concurrently herewith which secures the Promissory Note evidencing the PLHA Loan and the performance of the PLHA Loan Agreement and this Agreement, as the same may be amended or modified from time to time.

(e) “Low Income Household” means an individual or household with a household income equal to or less than sixty percent (60%) of the then current Area Median Income, including Utilities Allowance, adjusted for family size appropriate for the unit, as published from time to time by TCAC.

(f) “Low Income Rent” means the maximum allowable rent for each City Assisted Unit pursuant to Section 2.2, below.

(g) “MHP Guidelines ” means the Multifamily Housing Program Final Guidelines effective June 19, 2019, as the same may be amended or modified from time to time.

(h) “PLHA Guidelines ” means the Permanent Local Housing Allocation Final Guidelines dated October 2019, as the same may be amended or modified from time to time.

(i) “PLHA Loan” means all funds loaned to the Owner by the City pursuant to the PLHA Loan Agreement from PLHA Funds.

(j) “PLHA Loan Agreement” means the PLHA Loan Agreement entered into by and between the City and the Owner, dated as of __________________, 2024, as the same may be amended or modified from time to time.

(k) “Rent” means the same as “gross Rent,” as defined in the Internal Revenue Code (26 USC 42(g)(2)(B). It includes all mandatory charges, other than deposits, paid by the tenant for the use and occupancy of a City Assisted Unit, plus a utility allowance established in accordance with TCAC Regulations. For City Assisted Unit assisted under the U.S. Department of Housing and Urban Development (HUD) Section 8 or similar rental subsidy program, Rent includes only the tenant contribution portion of the contract rent.

(l) “Standard Agreement ” means Standard Agreement No. 20- PLHA-15629 (A - 7538) by and between HCD and the City signed by HCD on August 5, 2021, as amended by that Amendment to Standard Agreement by and between HCD and the City signed by HCD on July 29, 2022, as the same may be amended or modified PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 9 – Regulatory Agreement Page 4

from time to time.

(m) “TCAC” means the California Tax Credit Allocation Committee, established by Revenue and Taxation Code Section 18410.2.

(n) “Tenant” means a household occupying a City Assisted Unit.

(o) “Term” means the term of this Agreement, which shall commence on the date of this Agreement and shall continue for 55 years after the issuance of a certificate of occupancy for the Project or , 20 . These deed restrictions and covenants running with the land shall remain in force, without regard to the term of any mortgage or the transfer of ownership by the Owner or any subsequent Owner, commencing on the date of this Agreement.

(p) “Utilities Allowance” means an allowance for utilities services costs as established from time to time by the City.

ARTICLE 2

AFFORDABILITY AND OCCUPANCY COVENANTS

2.1 Occupancy Requirements.

Each of the two (2) City Assisted Units shall be rented to and occupied by or, if vacant, available for occupancy by Low Income Households and shall be provided in a manner that complies with the PLHA Guidelines.

2.2 Affordable Rent

(a) Affordability Requirements. Rent for each the two (2) City Assisted Units shall meet affordability requirements in a manner that complies with the PLHA Guidelines and shall be gross monthly Rent that does not exceed the maximum monthly rent for an individual or household with a household income equal to or less than thirty percent (30%) of the then current Area Median Income adjusted for family size appropriate for the unit, as published by from time to time by TCAC.

(b) Rent for each City Assisted Unit must comply with the MHP Guidelines Section 7312 and the MHP Guidelines Section 7301 definition of “Affordable Rent”.

(c) Initial rent for each City Assisted Unit shall be approved by the City prior to occupancy. Rent for each City Assisted Unit may be increased only once in any twelve (12) month period, based on changes in Area Median Income, or changes in the income level of the PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 9 – Regulatory Agreement Page 5

household occupying the City Assisted Unit as set forth herein; provided that the rent for each City Assisted Unit shall never exceed the Allowable Rent for the household occupying the City Assisted Unit.

(d) The Project shall comply with the following mix of units in accordance with all of the terms and conditions of this Agreement:

Income
Restriction
(% of AMI)
# of
Bedrooms
(Studio units
are “0”
bedroom)
PLHA-
Funded
Income
Restricted
Units
Non-PLHA
Income
Restricted
Units
Unrestricted
Units
Total Units
Manager Unit 0 0 0 0 0

Mod (80%-
120% AMI)
0 0 0 0 0
ELI (up to
30% AMI)
0 0 0 0 0
LI (30%-80%
AMI) – 60%
of AMI
6 (3 bedrooms
in each unit)
2 0 0 2
Above Mod
(120+%)
0 0 0 0 0
Not
Restricted
0 0 0 0 0

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 9 – Regulatory Agreement Page 6

2.3 Tenant Lease Requirements

Each Tenant lease shall contain a provision to the effect that Owner has relied on the income certification and supporting information supplied by the Tenant in determining qualification for occupancy of a City Assisted Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease.

In addition, each Tenant lease shall contain a provision that if, at any time, the Owner determines that a Low Income Household’s income has increased and exceeds the limit for a Low Income Household and exceeds the qualifying limit for a “lower income” household as set forth in California Health and Safety Code section 50079.5, which is a maximum of 80 percent (80%) of AMI, then such Tenant shall vacate such City Assisted Unit on or prior to the expiration of the 6- month period following the notice from Owner pursuant to Section 2.5(b), below.

2.4 Tenant Protections

The Project is subject to just c ause for eviction. For a termination to qualify as “f or cause,” the Owner shall demonstrate any of the following circumstances with respect to a termination of tenancy. Nothing in this S ection shall abrogate the protections afforded to survivors of violence consistent with the California Code of Civil Procedure Section 1161.3, as amended, and the Violence Against Women Act, Public Law 102-322, as amended.

(a) Failure to Pay Rent. Tenant failed to pay rent within three days of receiving written notice from the Landlord demanding payment as provided in subsection 2 of California Code of Civil Procedure section 1161.

(b) Breach of Rental Contract. Tenant violated a material term of the rental agreement as provided in subsection 3 of California Code of Civil Procedure section 1161.

(c) Tenant Illegal Activities . Tenant has been convicted for using the City Assisted Unit for an illegal purpose as provided in subsection 4 of California Code of Civil Procedure section 1161, including but not limited to the unlawful distribution of a controlled substance as contemplated by California Civil Code section 3486, the unlawful use, manufacture, or possession of weapons and ammunition as contemplated by California Civil Code section 3485, or for of a serious crime or violent felony as defined by applicable law, which occurred during the tenancy and within 1,000 feet of the City Assisted Unit. For purposes of this subsection, tenant household, after receiving a written notice, may cure the violation by removing, and demonstrating such removal, of the offending Tenant.

(d) Threat of Violent Crime. Any statement made by a Tenant, or at his or her request, by his or her agent to any person who is on the property that includes the City Assisted Unit or to the landlord, or his or her agent, threatening the commission of a crime which will result PLHA Loan Agreement Agreement No. A-8909
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Attachment No. 9 – Regulatory Agreement Page 7

in death or great bodily injury to another person, with the specific intent that the statement is to be taken as a threat, even if there is no intent of actually carrying it out, when on its face and under the circumstances in which it is made, it is so unequivocal, immediate and specific as to convey to the person threatened, a gravity of purpose and an immediate prospect of execution of the threat, and thereby causes that person reasonably to be in sustained fear for his or her own safety or for his or her immediate family’s safety.

(e) Nuisance Behavior. The Tenant, after written notice to cease and the passage of a reasonable period of time to abate or cure, continues to be so disorderly or to cause such a nuisance as to destroy the peace, quiet, comfort, or safety of the landlord or other Tenants of the structure or rental complex containing the City Assisted Unit. Such nuisance or disorderly conduct includes violations of state and federal criminal law that destroy the peace, quiet, comfort, or safety of the l andlord or other Tenants of the structure or rental complex containing the City Assisted Unit, or the creation or maintenance of a dangerous or unsanitary condition in violation of applicable local, state, and f ederal law, and may be further defined in the regulations adopted by the City.

(f) Notwithstanding the limitations of California Code of Civil Procedure Section 1161.3, as amended, act or acts constituting domestic violence or sexual assault or stalking against the Tenant or a member of Tenant ’s household cannot form the substantial basis of a f or cause reason to terminate the tenancy of the victim of such acts. A member of a Tenant household may raise such facts as an affirmative defense to an action terminating the tenancy.

2.5 Increased Income of Tenant Households.

(a) Increase from Low Income to at or below “Lower Income”. If upon recertification of income for a T enant of a City Assisted Unit , the Owner determines that Tenant’s income has increased and exceeds the qualifying income for a Low Income Household (but does not exceed the qualifying limit for a “lower income” household as set forth in California Health and Safety Code section 50079.5, which is a maximum of 80 percent (80%) of AMI), the Tenant shall continue to be deemed a Low Income Household for purposes of this Agreement until such time as such Tenant’s income exceed the qualifying limit for a “lower i ncome” household as set forth in California H ealth and S afety Code s ection 50079.5, which is a maximum of 80 percent (80%) of AMI, at which time subsection (b) shall apply.

(b) Non-Qualifying Household. If, at any time, the Owner determines that a Low Income Household’s income has increased and exceeds the limit for a Low Income Household and exceeds the qualifying limit for a “lower income” household as set forth in California Health and Safety Code section 50079.5, which is a maximum of 80 percent (80%) of AMI, then such Tenant shall be given six (6) months’ notice to vacate the City Assisted Unit and shall thereafter be required to vacate on or prior to the expiration of said 6-month period.

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2.6 Tax Credit Rules.

If the Project is subject to federal low-income housing tax credit requirements, the provisions of those requirements regarding continued occupancy by households whose incomes exceed the eligible income limitations may apply in place of the provisions set forth in Section 2.5.

ARTICLE 3

INCOME CERTIFICATION AND REPORTING

3.1 Income Certification.

(a) Owner will obtain and maintain on file an income computation and certification form from any prospective tenant dated immediately prior to the date of initial occupancy. Owner will verify that the income information provided by an applicant is accurate by following all applicable City policies and procedures and by taking one or more of the following steps as a part of the verification process: (i) obtain two (2) pay stubs from the most recent pay periods; (ii) obtain a written verification of income and employment from applicant’s current employer; (iii) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant’s income as is reasonably satisfactory; or (v) obtain such other information as may be reasonably required.

(b) Owner will update income records annually and provide copies of updated Tenant eligibility records and monthly rental records to the City for review. Upon review of such records, the City may at its option perform an independent audit of the tenant eligibility records in order to verify compliance with the income and affordability requirements set forth herein. Owner will retain the records described in this Section for a period of not less than five (5) years after the date each record was created.

3.2 Annual Report to City.

The Owner shall submit to the City (a) not later than July 1st of each calendar year, a statistical report, including income and rent data for each of the City Assisted Unit and racial and ethnicity data of all households, setting forth the information called for therein, use of PLHA Funds, or such other data as may be reasonably requested by the City, and (b) within fifteen (15) days after receipt of a written request, any other information or completed forms requested by the City in order to comply with reporting requirements of HCD.

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Attachment No. 9 – Regulatory Agreement Page 9

3.3 Additional Information.

The Owner shall provide any additional information reasonably requested by the City . The City shall have the right to examine and make copies of all books, records or other documents of the Owner which pertain to the Project.

3.4 Records.

The Owner shall maintain complete, accurate and current records pertaining to the Project, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of Tenants. All Tenant lists, applications and waiting lists relating to the Project shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained in a reasonable condition for proper audit and subject to examination during business hours by representatives of the City. The Owner shall retain copies of all materials obtained or produced with respect to occupancy of the City Assisted Units for a period of at least five (5) years.

3.5 Other Records.

Owner acknowledges that the PLHA Loan it received from the City comes from the PLHA Program. Owner agrees to comply with requests of the City for information for information necessary for the City’s reporting obligations to HCD and all agrees to provide all information and records required under the PLHA Loan Agreement , the PLHA Guidelines, and the Standard Agreement.

ARTICLE 4 OPERATION OF THE PROJECT

4.1 Affordable Residential Rental Use.

Owner shall only use the Property and operate the Project as permanent affordable rental housing in accordance with the PLHA Loan Agreement and to the extent applicable to the Project and Property, the PLHA Guidelines and the Standard Agreement.

4.2 Compliance with PLHA Loan Agreement, Standard Agreement, and PLHA Guidelines.

Owner shall comply with all the terms and provisions of the PLHA Loan Agreement and to the extent applicable to the Project and Property, the PLHA Guidelines and the Standard Agreement.

4.3 Taxes and Assessments.

Owner shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or PLHA Loan Agreement Agreement No. A-8909
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payable by it, at such times and in such manner as to prevent any penalty from accruing, or any line or charge from attaching to the Property; provided, however, that Owner shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Owner exercises its right to contest any tax, assessment, or charge against it, Owner , on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.

4.4 Condominium Conversion.

The Owner shall not convert any City Assisted Unit in the Project to condominium or cooperative ownership or sell condominium or cooperative conversion rights in the Project or the Property during the Term of this Agreement.

ARTICLE 5

PROPERTY MANAGEMENT AND MAINTENANCE

5.1 Management Responsibilities.

The Owner is responsible for all management functions with respect to the Property, including without limitation the selection of tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility over management of the Project and/or the Property. The Owner shall retain a professional property management company approved by the City in its reasonable discretion to perform its management duties hereunder. If Owner becomes qualified as a professional property management company, this could be approved by the City in lieu of an outside management company.

5.2 Management Agent; Periodic Reports.

The Property shall at all times be managed by an experienced management agent reasonably acceptable to the City, with demonstrated ability to operate residential facilities like the Property in a manner that will provide decent, safe, and sanitary housing (as approved, the “ Management Agent”). The Owner shall submit for the City’s prior written approval the identity of any proposed Management Agent. The Owner shall also submit such additional information about the background, experience and financial condit ion of any proposed Management Agent as is reasonably necessary for the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above.

PLHA Loan Agreement Agreement No. A-8909
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5.3 Approval of Management Policies.

The Owner shall submit its written management policies with respect to the Project to the City for its review and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement.

5.4 Property Maintenance.

The Owner agrees, for the entire Term of this Agreement, to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, City , municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials.

5.5 Replacement of Management Agent.

If the City determines in its reasonable judgment that the Project is not being operated and managed in accordance with the requirements and standards of this Agreement, the City shall deliver notice to the Owner of its intention to cause replacement of the Management Agent and the reasons for such intention. Within fifteen (15) days of receipt by the Owner of such written notice, City and Owner shall meet in god faith to consider methods for improving the financial and operating status of the Project, including, without limitation, replacement of the Management Agent. If, after such meeting, the City elects to proceed with the replacement of the Management Agent, the City shall so notify the Owner in writing within fifteen (15) days following the meeting. Thereupon, Owner shall promptly dismiss the Management Agent and appoint as the new Management Agent a person or entity approved by the City pursuant to Section 5.2, above. Any contract for the Management Agent entered into by Owner shall be approved in advance by the City and shall provide that the contract can be terminated, as set forth above. Owner’s failure to dismiss the Management Agent in accordance with this Section shall constitute a default under the Agreement, and the City may enforce this provision through any legal remedy available to it.

5.6 Insurance Coverage.

The Owner shall cause to have in full force and effect during the Term of this Agreement insurance coverage as required by the PLHA Loan Agreement.

ARTICLE 6 MISCELLANEOUS

6.1 Lease Provisions.

The form of Tenant lease utilized by Owner shall be submitted to the City for review and approval and shall comply with all requirements of this Agreement and the PLHA Loan Agreement, the PLHA Guidelines and the Standard Agreement, and shall, among other matters provide for PLHA Loan Agreement Agreement No. A-8909
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termination of the lease and consent by the Tenant to immediate eviction for only for just cause, as defined in Section 2.4 and shall provide the provisions required by Section 2.3.

6.2 Nondiscrimination.

Owner covenants, by and for itself and all persons claiming under or through Owner, that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of section 12955 of the Government Code, as those bases are defined in sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of section 12955, and section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Property or the Project, nor shall Owner or any person claiming under or through Owner 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 Property or the Project .

Owner shall market City Assisted Unit in accordance with the HUD -approved affirmative fair housing marketing plan and all Federal, State, or local fair housing and equal opportunity requirements.

6.3 Section 8 Certificate Holders.

The Owner will accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. The Owner shall not apply selection criteria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective Tenants, nor shall the Owner apply or permit the application of management policies or lease provisions with respect to the Project which have the effect of precluding occupancy of City Assisted Unit by such prospective Tenants.

6.4 Term.

The provisions of this Agreement shall apply to the Property for the entire Term. This Agreement shall bind any successor, heir or assign of the Owner , whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by the City. The earlier expiration or termination of the PLHA Loan Agreement or earlier repayment of the PLHA Loan shall not terminate this Agreement. The City makes the PLHA Loan on the condition, and in consideration of, this provision, and would not do so otherwise.

6.5 Transfer and Encumbrance of Property.

Except as otherwise provided herein or the PLHA Loan Agreement, the Owner shall not make or permit any sale, assignment, conveyance, lease (other than the rental of the City Assisted Unit to eligible tenant occupants), or transfer of the Property or any part thereof, without the prior written consent of the City during the Term of this Agreement.

PLHA Loan Agreement Agreement No. A-8909
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6.6 Compliance with PLHA Loan Agreement, PLHA Guidelines, and Standard Agreement.

Owner’s actions with respect to the Property shall at all times be in full conformity with all requirements of the PLHA Loan Agreement, and to the extent applicable to the Project and Property, the PLHA Guidelines and the Standard Agreement.

6.7 Covenants to Run With the Land.

The City and the Owner hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall run with the land, and shall bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, shall be held conclusively to have been executed, delivered and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the City expressly releases such conveyed portion of the Property from the requirements of this Agreement.

6.8 Enforcement by the City.

If the Owner fails to perform any obligation under this Agreement, and fails to cure the default within thirty (30) days after the City has notified the Owner in writing of the default or, if the default cannot be cured within thirty (30) days, failed to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, and shall notice the City of its efforts, and these efforts must be to the satisfaction of the City, the City shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law:

(a) Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel the Owner’ s performance of its obligations under this Agreement, and/or for damages.

(b) Remedies Provided Under PLHA Loan Agreement. The City may exercise any other remedy provided under the PLHA Loan Agreement.

6.9 Attorneys Fees and Costs.

In any action brought to enforce this Agreement, the prevailing party shall be entitled to all costs and expenses of suit, including attorneys ’ fees. This section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.

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6.10 Non-Liability of Officials, Employees and Agents.

The City shall not be personally liable to the Owner for any obligation created under the terms of this Agreement except in the case of actual fraud, willful misconduct or sole gross negligence by such person.

6.11 Indemnity.

Notwithstanding the insurance coverage required herein, the Owner shall indemnify and hold the City free and harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including without limitation attorneys ’ fees) which the City may incur as a direct or indirect consequence of (a) the Owner’s negligent or willful failure to perform any obligations as and when required by this Agreement; (b) any failure of any of the Owner’s representations or warranties to be true and complete; or (c) any negligent or willful act or omission by the Owner or any contractor, subcontractor, management agent, or supplier with respect to the Project or the Property, except where such losses are caused by the sole gross negligence, or willful misconduct of the City . The Owner shall pay immediately upon the City’s demand any amounts owing under this indemnity. The duty of the Owner to indemnify includes the duty to defend the City in any court action, administrative action, or other proceeding brought by any third party arising from the Project or the Property. The Owner’s duty to indemnify the City for acts, failures to act, or misrepresentations occurring during the Term shall survive the Term of this Agreement.

6.12 Recording and Filing.

The City and the Owner shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records of the County of Los Angeles.

6.13 Governing Law.

This Agreement shall be governed by the laws of the State of California.

6.14 Waiver of Requirements.

Certain requirements of this Agreement may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Agreement shall, or shall be deemed to, extend to or affect any other provision of this Agreement.

6.15 Amendments.

This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of the County of Los Angeles.

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6.16 Notices.

Any notice requirement set forth herein shall be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows:

Owner: Advancing Communities Together
Attn: _________________
38626 9
th Street East
Palmdale, California, 93550

City: City of Palmdale,
Attn: City Manager
38300 Sierra Highway
Palmdale, California 93550

Such addresses may be changed by notice to the other party given in the same manner as provided above.

6.17 Regulatory Agreement Controls

In the event that any provisions of the Agreement and other agreements on the Property conflict, the terms of the most restrictive agreement shall control and/or regulate the Property.

6.18 Severability.

If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby.

6.19 Consent and Approvals.

Any consent or approval by the City or the Owner required under this Agreement shall not be unreasonably delayed or withheld, unless otherwise provided in this Agreement. Any approval required under this Agreement shall be in writing and executed by an authorized representative of the party granting the approval.

6.20 City Actions.

Except where approval by the City Council is expressly required in this Agreement, all references in this Agreement to City action (including approvals, consents or extensions of time) shall mean action by the City Manager of the City or the City Manager’s designee.

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6.21 Multiple Originals; Counterparts.

This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.

[remainder of page left intentionally blank]
[signatures on following page]

PLHA Loan Agreement Agreement No. A-_____
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Attachment No. 9 – Regulatory Agreement Page S-1

IN WITNESS WHEREOF, the City and the Owner have executed this Agreement by duly authorized representatives, all on the date first written above.

CITY

THE CITY OF PALMDALE,

CALIFORNIA,
a municipal corporation

By:____________________
Ronda Perez
City Manager

ATTEST:

By: __________________________
Roxanne Faber
City Clerk

APPROVED AS TO FORM:

By:___________________________
William P. Curley, III
City Attorney

KANE, BALLMER & BERKMAN

By:
________________________________
Susan Apy
City Special Counsel

OWNER

ADVANCING COMMUNITIES

TOGETHER,
a California nonprofit public benefit
corporation

By:_________________________________
Rossie D. Cherry
Chief Executive Officer

By:_________________________________
Olivia Cherry
Executive Director

PLHA Loan Agreement Agreement No. A-8909
Advancing Communities Together APN: 3008-010-904
Attachment No. 9 – Regulatory Agreement Exhibit A – Legal Description

Exhibit A

LEGAL DESCRIPTION

REAL PROPERTY IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

THE PARCEL OF LAND IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AS SHOWN AS LOT 20 15 OF TRACT NO. 15912 RECORDED IN BOOK 426 PAGES 13 AND 14 OF MAPS, IN THE OFFICE OF THE COUNTY

RECORDER OF SAID COUNTY

APN: 3008-010-904

AFF

ORDABLE HOUSING AGREEMENT
by
and between
HOUS

ING AUTHORITY OF THE CITY OF PALMDALE
and

ADVANCING

COMMUNITIES TOGETHER
AGRE
EMENT NO. A-8908
August 21, 2024
Affordable Housing Agreement Agreement No. A-8908
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Page i

TABLE OF CONTENTS
Page
PART 1. SUBJECT OF AGREEMENT ......................................................................1 Section 101 Purpose of the Agreement ................................................................1 Section 102 Definitions........................................................................................1 Section 105 The Property.....................................................................................6 Section 106 Authority ..........................................................................................6 Section 107 Owner ...............................................................................................6 Section 108 Assignments and Transfers ..............................................................6 PART 2. DISPOSITION OF THE PROPERTY ..........................................................8 Section 201 Sale and Purchase ............................................................................8 Section 202 Purchase Price ..................................................................................8 Section 203 Escrow..............................................................................................8 Section 204 Close of Escrow .............................................................................11 Section 205 Form of Deed .................................................................................11 Section 206 Condition of Title ...........................................................................11 Section 207 Closing Date...................................................................................11 Section 208 Conditions Precedent to Close of Escrow ......................................11 Section 209 Failure of Conditions to Conveyance Close of Escrow. ................11 Section 210 Title Insurance ...............................................................................12 Section 211 Taxes and Assessments ..................................................................13 Section 212 Occupants of the Property ..............................................................13 Section 213 “As Is” Transaction; Waiver; Release ...........................................13 PART 3. DEVELOPMENT OF THE PROPERTY ...................................................14 Section 301 Land Use Approvals ......................................................................14 Section 302 Condition of the Property...............................................................15 Section 303 Scope of Development ...................................................................15 Section 304 Basic Concept and Schematic Drawings .......................................15 Section 305 Landscaping and Grading Plans.....................................................15 Section 306 Construction Drawings and Related Documents ...........................16 Section 307 Authority Approval of Plans ..........................................................16 Section 308 Method of Financing ......................................................................17 Section 309 Schedule of Performance ...............................................................17 Section 310 Indemnification and Insurance .......................................................18 Section 311 Nondiscrimination..........................................................................21 S
ection 312 Local, State and Federal Laws .......................................................21 Section 313 Permits ...........................................................................................22 Section 314 Rights of Access ............................................................................22 Section 315 Disclaimer of Responsibility by Authority ....................................23 Section 316 Taxes, Assessments, Encumbrances and Liens .............................23 Section 317 Prohibition against Transfer ...........................................................23 Affordable Housing Agreement Agreement No. A-8908
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S
ection 318 Removal of Liens and Encumbrances............................................24 Section 319 Release of Construction Covenants ...............................................24 PART 4. USE OF THE PROPERTY .........................................................................25 Section 401 Uses ................................................................................................25 Section 402 Maintenance of the Property ..........................................................26 Section 403 Obligation to Refrain from Discrimination....................................27 Section 404 Form of Nondiscrimination and Nonsegregation Clauses .............27 Section 405 Effect and Duration of Covenants ..................................................28 Section 406 Agreement Containing Covenants .................................................28 Section 407 Monitoring .....................................................................................28 PART 5. DEFAULTS AND REMEDIES ..................................................................29 Section 501 Defaults - General ..........................................................................29 Section 502 Institution of Legal Actions ...........................................................30 Section 503 Applicable Law ..............................................................................30 Section 504 Acceptance of Service of Process ..................................................30 Section 505 Rights and Remedies Are Cumulative ...........................................30 Section 506 Damages .........................................................................................30 Section 507 Specific Performance .....................................................................31 Section 508 Termination by Authority ..............................................................31 Section 509 Reentry and Revesting of Title in Authority..................................31 PART 6. GENERAL PROVISIONS ..........................................................................33 Section 601 Notices ...........................................................................................33 Section 602 Enforced Delay: Extension of Time of Performance .....................33 Section 603 Conflict of Interest .........................................................................34 Section 604 Nonliability of Authority Officials and Employees .......................34 Section 605 Inspection of Books and Records ..................................................34 Section 606 Approvals .......................................................................................35 Section 607 Real Estate Commissions ...............................................................35 Section 608 Construction and Interpretation of Agreement ..............................35 Section 609 Time of Essence .............................................................................36 Section 610 No Partnership ...............................................................................36 S
ection 611 Compliance with Law ....................................................................36 Section 612 Binding Effect ................................................................................36 Section 613 No Third Party Beneficiaries .........................................................36 Section 614 Authority to Sign............................................................................37 Section 615 Incorporation by Reference............................................................37 Section 616 Counterparts ...................................................................................37 Section 617 Severability ....................................................................................37 PART 7. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS ..................37 Affordable Housing Agreement Agreement No. A-8908
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ATTACHMENTS
AT
TACHMENT NO. 1 - SITE MAP
ATTACHMENT NO. 2 - LEGAL DESCRIPTION
ATTACHMENT NO. 3 - METHOD OF FINANCING
ATTACHMENT NO. 4 - SCOPE OF DEVELOPMENT
ATTACHMENT NO. 5 - SCHEDULE OF PERFORMANCE
ATTACHMENT NO. 6 - AGREEMENT CONTAINING COVENANTS
ATTACHMENT NO. 7 - PROJECT BUDGET
ATTACHMENT NO. 8 - GRANT DEED
ATTACHMENT NO. 9 - AUTHORITY NOTE
ATTACHMENT NO. 10 - AUTHORITY DEED OF TRUST
ATTACHMENT NO. 11 - ASSIGNMENT OF AGREEMENTS
ATTACHMENT NO. 12 - ENVIRONMENTAL INDEMNITY
ATTACHMENT NO. 13 - ASSIGNMENT OF RENTS
ATTACHMENT NO. 14 - NOTICE OF RESTRICTIONS

AFFORDABLE HOUSING AGREEMENT
(A-8908)
THIS AFFORDABLE HOUSING AGREEMENT (“Agreement”) is dated for reference purposes as of August 21 , 2024 and is being entered into by and between the HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body corporate and politic (the “Authority”) and ADVANCING COMMUNITIES TOGETHER, a California nonprofit public benefit corporation (“Owner”). The Authority and Owner agree as follows:

P
ART 1. SUBJECT OF AGREEMENT
Section 101 Purpose of the Agreement
Owner will, concurrently with entering into this Agreement, enter into that certain Permanent Local Housing Allocation Funds Loan Agreement dated on or about August 21, 2024 (the “PLHA Agreement”) with the City for a loan of funds (the “PLHA Funds”) from the City received from the California Department of Housing and Community Development (“HCD”) from the Permanent Local Housing Allocation program (“PLHA Program”) in the principal amount of $821,985.94 (the “PLHA Loan”) to pay construction costs for the improvements of the property located in the City of Palmd ale,
California, as shown on the Site Map attached as Attach ment No. 1 and mor e specifically described in Attachment No. 2 (the “Property”). The PLHA Loan will preser ve the financial feasibility of the Property’s use as an affordable residential rental development for Low Income households, consisting of a duplex rental apartment with two ( 2) two-story units (3 bedrooms/ 2 baths per unit). The units shall be limited to occupancy by Low Income households. Subject to the terms and conditions of this Agreement, the Authority shall convey the Property to the Owner for the development of the Project. The construction 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, morals, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state, and local laws and requirements.

Section 102 Definitions
For purposes of this Agreement, the following capitalized terms shall have the following meanings:
“Affiliate” shall mean (1) any Person directly or indirectly controlling, controlled by or under common control with another Person; (2) any Person owning or controlling ten percent (10%) or more of the outstanding voting securities of such other Person; or (3) if th at other Person is an officer, director, member or partner, any company for which such Person acts in any such capacity. The term “control” as used in the immediately preceding sentence, shall mean 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 exercise or control, directly or indirectly, more than fifty percent (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 possession, indirectly or
Affordable Housing Agreement Agreement No: A-8908
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di
rectly, of the power to direct or cause the direction of the management or policies of the controlled entity.
“Affordable Rent ” shall mean monthly rent (including a reasonable utility allowance) which does not exceed for a Low Income household, one-twelfth of the product of 30 percent times 60 percent of the Area Median Income, adjusted for household size appropriate to the unit. As used in this paragraph, “household size appropriate to the unit” shall equal the number of bedrooms in the unit plus one.
“Affordable Units” shall mean the duplex rental apartment with two (2) two -story units (3 bedrooms/ 2 bath per unit ) to be constructed on the Property and rented exclusively to and occupied by Low Income households at an Affordable Rent. “Agreement Containing Covenants ” shall mean the agreement containing affordable housing requirements to be recorded against the Property, as it may be amended or modified from time to time,substantially in the form attached hereto as Attachment No. 6. “Area Median Income” or “AMI” shall mean the area median income for Los Angeles County, as determined by the United States Department of Housing and Urban Development and published from time to time by the California Department of Housing and Community Development.
“A
pproved Title Conditions ” shall mean title that is subject to current property taxes , easements, assessments, and encumbrances and any other easements and other encumbrances specifically approved in writing by the Executive Director. “Assignment of Agreements” shall mean an instrument substantially in the form attached to this Agreement as Attachment No. 11.
“Assignment of Rents” shall mean an instrument substantially in the form attached to this Agreement as Attachment No. 13, as it may be amended or modified from time to time. “Authority” shall mean the Housing Authority of the Authority of Palmdale, a public body, corporate and politic.
“Authority Deed of Trust” shall mean the deed of trust, recorded against the Property in second priority lien position, in which the Owner is the Trustor and the Authority is the Beneficiary, which secures the Authority Note and performance under this Agreement and the Agreement Containing Covenants, as it may be amended or modified from time to time. “Authority Loan ” shall mean that certain purchase money loan to be made by the Authority in the original principal amount of up to $80,000 in accordance with this Agreement, evidenced by the Authority Note and secured by the Authority Deed of Trust. “Authority Note ” shall mean the Promissory Note evidencing the Authority Loan in substantially the form attached hereto as Attachment No. 9 and incorporated herein by this Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

r
eference, to be dated as of the Closing Date, executed by the Owner in favor of the Authority, as it may be amended or modified from time to time.
“City” shall mean the City of Palmdale, a charter city of the State of California. “Close of Escrow ” shall mean the point in time when all conditions precedent to the conveyance of the Property to the Owner have been satisfied in accordance with this Agreement and the Property is conveyed by the Authority to the Owner. “Closing Date” shall mean the date of recordation of the Grant Deed and Authority Deed of Trust.
“Completion” shall mean the point in time when all of the following shall have occurred:
(1) issuance of a permanent certificate of occupancy by the City of Palmdale for the Project; (2) recordation of a Notice of Completion by Owner or its contractor for the Project; (3) certification by the project architect that development of the Project (with the exception of minor “punchlist” items) has been completed in a good and workmanlike manner in accordance with the approved plans and specifications; (4) payment, settlement or other extinguishment, discharge, release, waiver, bonding or insuring against of any mechanic’s liens that have been recorded or stop notices that have been delivered for the Project; and (5) the Property has been developed in accordance with this Agreement, the Scope of Development, and Plans approved by the Authority pursuant to this Agreement.
“Development Costs” shall mean all costs which are actually incurred by the Owner for the development of the Property as set forth in the Project Budget. “Environmental Indemnity” shall mean an instrument substantially in the form attached to this Agreement as Attachment No. 12, as it may be amended or modified from time to time. “Escrow Agent” shall mean an escrow agent mutually acceptable to Agency and Owner. “E
xecutive Director” shall mean the Executive Director of the Authority or designee. “H
azardous Materials” shall have the meaning set forth in the Environmental Indemnity. “Legal Description ” shall mean the legal description of the Property attached to this Agreement as Attachment No. 2.
“Low Income” shall mean an individual or household with a household income equal to or less than sixty percent (60%) of the then-current Area Median Income, adjusted for family size appropriate for the unit.
“M
ethod of Financing” shall mean the Method of Financing attached to this Agreement as Attachment No. 3, as it may be amended or modified from time to time.

Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

“N
otice of Restrictions” shall mean the Notice of Affordability Restrictions on Transfer of Property attached to this Agreement as Attachment No. 14, as it may be amended or modified from time to time.
“P
ermitted Transfer” means any of the following:
a. A conveyance of the Property to any Affiliate;
b. The lease for occupancy of any unit in accordance with this Agreement; and c. The granting of easements or permits to facilitate the rehabilitation of the Property in accordance with this Agreement.

Any transfer described in clauses a. through b. shall be subject to the reasonable approval of documentation by the Executive Director or designee. “Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company or other entity, domestic or foreign. “PLHA Agreement ” shall mean the agreement between the City and the Owner evidencing the PLHA Loan made by the City to the Owner as more particularly described in Section 101 herein, as it may be amended or modified from time to time. “PLHA Deed of Trust ” shall mean the deed of trust securing the PLHA Loan, to be recorded against the Property in first priority lien position upon the Close of Escrow substantially in the form attached to the PLHA Agreement as Attachment No. 8, as it may be amended or modified from time to time.
“PLHA Loan” shall mean the loan by the City to Owner in the amount and pursuant to the terms and conditions of the PLHA Agreement, which shall be evidenced by the PLHA Note and secured by the PLHA Deed of Trust and the other PLHA loan documents. The PLHA Loan shall be derived from the City’s allocation of PLHA Program funds. “PLHA Note” shall mean the promissory note evidencing the PLHA Loan substantially in the form attached to the PLHA Agreement as Attachment No. 7, as it may be amended or modified from time to time.
“PLHA Regulatory Agreement” shall mean the Agreement Containing PLHA Program Requirements to be recorded upon the Close of Escrow, substantially in the form attached to the PLHA Agreement as Attachment No. 5, as it may be amended or modified from time to time. “Project” shall mean the construction of the improvements located on the Property for use as affordable housing in accordance with this Agreement (including the Scope of Development) and the Agreement Containing Covenants.

Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

“P
roject Budget ” shall mean the applicable schedule of acquisition and Development Costs attached to this Agreement as Attachment No. 7, as it may be amended or modified from time to time.
“Property” means the real property described in Attachment No. 2. “Purchase Price” shall mean the Owner ’s purchase price for the Property in the amount of Eighty Thousand Dollars ( $80,000) to be paid at closing through a carry back loan from the Authority.
“Replacement Reserve ” shall have the meaning set forth in Section 308(d) of this Agreement.
“R
elease of Construction Covenants” shall have meaning set forth in Section 319 of this Agreement, as it may be amended or modified from time to time. “S
chedule of Performance” shall mean the document attached to this Agreement as Attachment No. 5, as it may be amended or modified from time to time. “S
cope of Development ” shall mean the document attached to this Agreement as Attachment No. 4, as it may be amended or modified from time to time. “S
ite Map” means the document which is attached to this Agreement as Attachment No. 1, as it may be amended or modified from time to time.
“T
itle Company” shall mean a title company mutually acceptable to the Authority and the Owner.
“T
itle Insurance Policies” shall mean the following policies of title insurance to be issued by the Title Company at the Close of Escrow, subject to the Approved Title Conditions:
a. A s
tandard form coverage owner ’s policy of title insurance in favor of Owner insuring the Owner’s fee title in the Property, in an amount and with reasonable endorsements as requested by the Owner without cost or expense to the Authority (the “Owner’s Title Policy”). b. A s
tandard form CLTA Lender’s Title Insurance Policy in favor of the City together with such endorsements as the City may reasonably require, in the amount of the Authority Loan insuring the Authority Deed of Trust as a second lien on the Property (the “Lender’s Title Policy”). “UCC
-1” shall mean a Financing Agreement to be recorded and filed at the Closing Date.

Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

Section 105 The Property
The “Property” is that certain property in the City of Palmdale, illustrated on the “Site Map” (Attachment No. 1) and as described in the “Legal Description of the Property” (Attachment No. 2) which will be acquired by the Owner. The Property is currently owned by the Authority and is unimproved, vacant land located at a cul-de-sac on E Avenue Q-2 between Avenue Q and E Avenue Q3 and east of 5th Street E.

Section 106 Authority
a. Authority is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under Housing Authorities Law of the State of California.
b. T
he address of the Authority for purposes of receiving notices pursuant to this Agreement shall be c/o Executive Director, City of Palmdale, 38250 Sierra Highway, Palmdale, California 93550.
c.
“Authority” as used in this Agreement includes the Housing Authority of the City of Palmdale, California and any assignee or successor to its rights, powers and responsibilities.

Section 107 Owner
a. The Owner is Advancing Communities Together, a California nonprofit public benefit corporation.
b. The address of Owner for purposes of receiving notices pursuant to this Agreement shall be 38626 9th Street East, Palmdale, California, 93550. c. Whenever the term “Owner” is used herein, such term shall mean and include: (1) the Owner as of the date hereof; or (2) any other assignee of or successor to its rights, powers and responsibilities permitted by this Agreement.

Section 108 Assignments and Transfers
a. Owner represents and agrees that its undertakings pursuant to this Agreement are for the purpose of redeveloping and providing affordable housing on the Property and not for speculation in land holding. Owner further recognizes that the qualifications and identity of Owner are of particular concern to the Authority, in light of the following: (1) the importance of the development of the Property to the general welfare of the community; (2) the public assistance that has been made available by law and by the government for the purpose of making such redevelopment possible; and (3) the fact that a change in ownership or control of Owner or any other act or transaction involving or resulting in a significant change in ownership or control of Owner, is for practical purposes a transfer or disposition of the property then owned Affordable Housing Agreement Agreement No: A-8908
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by Owner. Owner further recognizes that it is because of such qualifications and identity that the Authority is entering into the Agreement with the Owner. Therefore, no voluntary or involuntary successor in interest of Owner shall acquire any rights or powers under this Agreement except as expressly set forth herein.
b. For the reasons cited above, the Owner represents and agrees for itself and any successor in interest that prior to the full reconveyance of the Authority Deed of Trust; Owner shall not assign all or any part of this Agreement, or any interest herein, without the prior written approval of the Authority. Subject to review of documentation effectuating any such proposed assignment or transfer, the Authority agrees to reasonably give such approval if the assignment is a Permitted Transfer.
c. For the reasons cited above, the Owner represents and agrees for itself and any successor in interest that prior to the full reconveyance of the Authority Deed of Trust, without the prior written approval of the Authority, there shall be no significant change in the ownership of the Owner or in the relative proportions thereof, or with respect to the identity of the parties in control of the Owner or the degree thereof, by any method or means, except Permitted Transfers. d. Any assignment or transfer of this Agreement or any interest herein or significant change in ownership of the Owner, other than a Permitted Transfer, shall require the approval of the Authority, which may be withheld in its sole and absolute discretion. To the extent Authority approval of an assignment or transfer is required by this Agreement, in granting or withholding its approval, Authority shall base its decision upon the relevant experience, financial capability, and reputation of the proposed ass ignee or transferee, and the effect, if any, of such proposed transfer on the public purposes of this Agreement. In addition, Authority shall not approve any assignment or transfer of this Agreement or any interest herein or significant change in ownership of the Owner that would result in payment of consideration to any Person from the net proceeds of a sale or refinance of the Property or the Project, or any portion thereof or interest therein, prior to full reconveyance of the Authority Deed of Trust. e. The Owner shall promptly notify the Authority of any and all changes whatsoever in the identity of the parties in control of the Owner or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the Authority if there is any significant change (voluntary or involuntary) in membership, management or control, of the Owner (other than such changes occasioned by the death or incapacity of any individual) prior t o the full reconveyance of the Authority Deed of Trust.
f. The restrictions of this Section 108 shall terminate upon full reconveyance of the Authority Deed of Trust.

Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

PART 2. DISPOSITION OF THE PROPERTY
Section 201 Sale and Purchase
In accordance with and subject to all the terms, covenants, and conditions of this Agreement, the Authority agrees to sell the Pr operty to the Owner and the Owner agrees to purchase the Property from the Authority. Owner acknowledges and agrees that the terms of the sale and the conditions precedent to conveyance and delivery of title pursuant to this Agreement are set forth in this Article 2 and in the Method of Financing.

Section 202 Purchase Price
The Purchase Price shall be payable by Owner to Authority upon the Close of Escrow in the form of a carry back loan from the Authority to Owner . In accordance with and subject to all the terms, conditions and covenants of this Agreement, the Authority agrees to lend, and Owner agrees to borrow, the original principal amount of Eighty Thousand Dollars ($80,000) as and for a carry back loan for the Purchase Price, which is the fair market value of the Property.

The Authority Loan shall be evidenced by the Authority Note and secured by the Authority Deed of Trust, the Assignment of Agreements, and other documents executed in connection with the Authority Loan.

Section 203 Escrow
a. Either the Authority or Owner shall open an escrow for conveyance of the Property with the Escrow Agent. Articles 1 and 2 of this Agreement constitute the joint escrow instructions of the Authority and the Owner, and a copy of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow. The Authority and the Owner shall provide such additional escrow instructions consistent with this Agreement as shall be necessary. The Escrow Agent hereby is empowered to act under such instructions, and upon indicating its acceptance thereof in writing, delivered to the Authority and to the Owner within 5 days after opening of the escrow, the Escrow Agent shall carry out its duties as Escrow Agent hereunder.

b. Upon delivery to the Escrow Agent of the Grant Deed by the Authority, the Escrow Agent shall record the Grant Deed and such other instruments requested by Authority and Owner in accordance with these escrow instructions, provided that all conditions to such recording have been satisfied in accordance with the terms and provisions of this Agreement. The Escrow Agent shall buy, affix, and cancel any transfer stamps required by law. Any insurance policies governing the Property are not to be transferred.

c. The Owner shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Owner of the amount of such Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

fees, charges, and costs, but not earlier than ten (10) days prior to the scheduled date for the conveyance of the Property:

(i) All of the escrow fees;
(ii) The premium for the title insurance policies to be paid by the Owner as set forth in Section 210 of this Agreement;
(iii) Recording fees; and
(iv) Any State, County, or City documentary stamps or transfer tax. d. The Authority shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Authority of the amount of such fees, charges, and costs, but not earlier than ten (10) days prior to the scheduled date for the conveyance of the Property:

(i) Ad valorem taxes and assessments, if any, upon the Property or upon this Agreement or any rights hereunder, prior to the conveyance of title.
e. Upon Owner’s completion of all acts necessary to entitle the Owner to conveyance of the Property, the Authority shall execute and deliver to the Escrow Agent the Grant Deed conveying to the Owner title to the Property in accordance with the requirements of this Agreement.

f. The Escrow Agent is authorized to:

(i) Pay, and charge the Authority and the Owner, respectively, for any fees, charges and costs payable under this Section 203. Before such payments are made, the Escrow Agent shall notify the Authority and the Owner of the fees, charges and costs necessary to close the escrow.
(ii) Deliver the Grant Deed and other documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the Authority and the Owner.
(iii) Record any instruments, including, but not limited to, the Grant Deed, delivered through this escrow if necessary or proper to vest title in the Owner in accordance with the terms and provisions of this Agreement.

Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

g. All funds received in this escrow shall be deposited by the Escrow Agent in a general escrow account with any state or national bank doing business in the State of California and reasonably approved by the Owner and the Authority, and may be combined in such with other escrow funds of the Escrow Agent.

h. If this escrow is not in condition to close on or before the time for conveyance set forth in the Schedule of Performance, either party who then shall have fully performed the acts to be performed before the conveyance of title may, in writing, demand the return of its money, papers, or documents from the Escrow Agent. No demand for return shall be recognized until 10 days after the Escrow Agent (or the party making such demand) shall have mailed copies of such demand to the other party or parties at the a ddress of its principal place of business. Objections to such demand, if any, shall be raised by written notice to the Escrow Agent and to the other party within the 10-day period, in which event the Escrow Agent is authorized to hold all money, papers, and documents with respect to the Property until instructed by a mutual agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. If no such demands are made, then escrow shall proceed and shall be closed as soon as possible.

i. If objections to the demand for the return of money, papers, documents or any other demands discussed herein are raised as above provided for, the Escrow Agent shall not be obligated to return any such money, papers, or documents except upon the written instructions of both the Authority and the Owner, or until the party entitled thereto has been determined by a final decision of a court of competent jurisdiction. If no such objections are made within said 10- day period the Escrow Agent shall immediately return the demanded money, papers, or documents.

j. The parties understand they may be required to execute additional standard form escrow instructions required by the Escrow Agent (“General Instructions”). In the event of a conflict between this Agreement and any such General Instructions, this Agreement shall control. The parties agree, however, that they will refuse to sign General Instructions which (1) purport to relieve the Escrow Agent of liability for negligence or intentional wrong- doing; (2) excuse the Escrow Agent from strict compliance with each and all of the provisions of this document and the General Instructions; or (3) purport to authorize the Escrow Agent to follow the instructions or directive of any person other than Authority, Owner or their respective successors or assigns pursuant to the terms of this Agreement, or the representatives of such parties. Any amendment to the escrow instructions shall be in writing and signed by both the Authority and the Owner. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment.

k. All communications from the Escrow Agent to the Authority or the Owner shall be directed to the addresses set forth in Section 106 and Section 107 of this Agreement, and in the manner set forth in Section 601 of this Agreement for notices between the parties hereto.

l. Authority and Owner shall each pay their own legal and professional fees and fees of other consultants incurred by Authority and Owner, respectively.

Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

Section 204 Close of Escrow
a. Subject to any mutually agreed upon extension of time, the Authority shall convey title to the Property to the Owner in accordance with Section 203 on or before the Closing Date (so long as all conditions precedent have been satisfied), or such later date mutually agreed to in writing by the Authority and the Owner and communicated in writing to the Escrow Agent. b. P os
session of the Property shall be delivered to the Owner concurrently with the conveyance of title to the Property. The Owner shall accept title and possession to the Property upon the Close of Escrow.

Section 205 Form of Deed
The Authority shall convey to the Owner title to the Property in the condition provided in Section 206 of this Agreement by Grant Deed containing covenants necessary or desirable to carry out this Agreement, substantially in the form attached hereto and incorporated herein as Attachment No. 8.

Section 206 Condition of Title
Subject to Section 203 hereof, the Authority shall convey to the Owner fee simple merchantable title to the Property free and clear of all liens, encumbrances, assessments, easements, leases and taxes; except for those matters which are set forth in the Approved Title Conditions, this Agreement, included in the Grant Deed, and those which are otherwise consistent with this Agreement and reasonably acceptable to the Owner.

Section 207 Closing Date
Subject to satisfaction of all conditions precedent to the Close of Escrow and subject to any mutually agreed-upon extension of time, the Authority shall deposit the Grant Deed with the Escrow Agent on or before the Closing Date set forth in the Schedule of Performance.

Section 208 Conditions Precedent to Close of Escrow
The Close of Escrow and the obligations of the Authority and Owner hereunder are subject to the satisfaction prior to the Close of Escrow (unless otherwise provided or extended), of the conditions and the obligations of the parties with respect to such conditions set forth in the Method of Financing.

Section 209 Failure of Conditions to Conveyance Close of Escrow a. I
n the event any of the conditions precedent to the Close of Escrow are not timely satisfied or waived by the party which such condition benefits, for a reason other than the default of Authority or Owner, the following shall apply:

Affordable Housing Agreement Agreement No: A-8908
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(i) Either party shall, in writing, have the right to terminate this Agreement, the escrow and the rights and obligations of Authority and Owner hereunder, except as otherwise provided herein; and
(ii) Except as otherwise provided in this Agreement , Escrow Agent is hereby instructed to promptly return to Owner and Authority all funds, if any, and documents deposited by them, respectively, into escrow which are held by Escrow Agent on the date of said termination (less, in the case of the party otherwise entitled to such funds, the amount of any cancellation charges required to be paid by such party under paragraph (b) below); and
(iii) Neither party shall have any further rights or obligations hereunder except as otherwise provided herein.
b. Cancellation Fees and Expenses . In the event this e scrow terminates because of the non-satisfaction of any condition for a reason other than the default of Authority or Owner under this Agreement, Authority and Owner shall each pay fifty percent (50%) of the cancellation charges, if any, required to be paid to Escrow Agent and the Title Company, and all other charges shall be borne by the party incurring same. In the event this e scrow terminates because of the default of Authority or Owner, all charges, including the cancellation charges, if any, required to be paid to Escrow Agent and the Title Company shall be borne by the party in default.

c. Actions to be taken by the Escrow Agent. At the Close of Escrow, Escrow Agent shall promptly undertake all of the following in the manner herein below indicated:

(i) Cause the Grant Deed and any other documents which the parties hereto may mutually direct to be recorded in the Official Records of the County Recorder of Los Angeles County, and obtain conformed copies thereof for distribution to Authority and Owner.
(ii) Direct the Title Company to issue the Owner ’s Title Insurance Policy to Owner and the Lender’s Title Insurance Policy to the City. (iii) Prepare and distribute to Owner and Authority copies of both parties’ escrow Close of Escrow statements and a complete copy of all documents handled by escrow.

Section 210 Title Insurance
Concurrent with recordation of the Grant Deed, the Title Company shall provide and deliver the Title Insurance Policies to the respective insured parties. The Owner shall be responsible for paying the premium for the Title Insurance Policies and any additional title Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

insurance, including any extended coverage or special. Authority shall have no responsibility for paying the cost of the premium for any title insurance policy.

Section 211 Taxes and Assessments
Ad valorem taxes and assessments, if any, on the Property, and taxes upon this Agreement or any rights hereunder, levied, assessed or imposed for any period, commencing prior to conveyance of title or possession of the Property to the Owner, shall be borne by the Authority.

All ad valorem taxes and assessments levied or imposed for any period commencing after conveyance of title or possession of the Property to the Owner shall be paid by the Owner.

Section 212 Occupants of the Property
The Authority agrees that title to the Property shall be conveyed free of any possession or right of possession except that of the Owner, unless waived by the Owner in writing.

Section 213 “As Is” Transaction; Waiver; Release
Owner acknowledges that it is purchasing the Property in reliance solely on: (1) Owner’s inspection of the Property and all personal property and improvements being sold in connection with the Property; and (2) the opinions and advice of consultants and attorneys engaged by the Owner concerning the Property.

The Property and all existing improvements on the Property shall be conveyed in an “ AS IS” condition, with no warranty, express or implied by the Authority as to the condition of the soil (or groundwater), its geology, the presence of known or unknown faults, the condition of the improvements, or the presence of any Hazardous Materials . It shall be the sole responsibility of the Owner, at the Owner’s expense, to investigate and determine the suitability of the Property (including improvements) for the development to be constructed by the Owner pursuant to this Agreement, including but not limited to, the soil, groundwater and geological condition, topography, the area and configuration of the Property, the existence of Hazardous Materials in soil and/or groundwater, the presence of mold, construction defects or other matters which would or could necessitate abatement or remediation action, physical or mechanical defects in the improvements or personal property, easements, licenses, or encroachment which is not a matter of public record, whether or not visible upon inspection of the Property, the zoning and other land use regulations applicable to the Property, and any other matters relating to the Property, including, but not limited to, value, title, income, feasibility, cost, marketing and investment return.

Except as otherwise permitted herein, Owner hereby waives any contingency regarding the soil (or groundwater) condition of the Property (including improvements), or any part of the Property, or the presence of any Hazardous Materials or its suitability for the purposes for which the Property is to be put pursuant to this Agreement. The Owner therefore explicitly acknowledges that following acquisition and also following any development of the Property it will assume and Affordable Housing Agreement Agreement No: A-8908
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bear all future liability for any necessary mitigation measures for Hazardous Materials and any residual Hazardous Materials that may remain, and will hold the Authority harmless therefrom.

Owner shall assume the risk that adverse matters, including, but not limited to, construction defects and adverse physical and environmental conditions, may not have been revealed by Owner’s investigation, and Owner hereby waives, relinquishes and releases Authority and the City and their respective elected officials, officers, employees, agents, consultants, contractors, attorneys, and representatives (collectively, the “Indemnified Parties”) from and against any and all claims, demands, causes of action ( including causes of action in tort), losses, damages, liabilities, costs and expenses (including attorneys’ fees) of any and every kind or character, known or unknown, which Owner might have asserted or alleged against Authority or any of the Indemnified Parties at any time by reason of or arising out of any latent or patent construction defects or physical conditions, violation of any applicable laws, and any and all other acts, omissions, events, circumstances, or matters regarding the Property.

In connection with such release, Owner expressly waives all rights under California Civil Code Section 1542, which provides that:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW

OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF

EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR

HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

_________ _________
Owner Owner

PART 3. DEVELOPMENT OF THE PROPERTY
Section 301 Land Use Approvals
It is the responsibility of the Owner, without cost to Authority, to ensure that zoning of the Property and all applicable City land use requirements will be such as to permit development of the Property and completion of the Project and the use, operation, and maintenance of the Project in accordance with the provisions of this Agreement. Nothing contained herein shall be deemed to entitle Owner to any City of Palmdale permit or other City approval necessary for the development of the Property, or waive any applicable governmental requirements relating thereto.

This Agreement does not (a) grant any land use entitlement to Owner, (b) supersede, nullify or amend any condition which may be imposed by the City of Palmdale in its governmental capacity in connection with approval of the development described herein, (c) guarantee to Owner or any other party any profits from the development of the Property, or (d) amend any City laws, codes or rules. This is not a Development Agreement as provided in Government Code Section 65864.

Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904

Section 302 Condition of the Property
a. Authority makes no representation or warranty, express or implied, regarding any conditions of the Property. It shall be the sole responsibility of the Owner, at the Owner’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 sole responsibility and obligation of the Owner, without cost to Authority, to take such action as may be necessary to place the Property in all respects in a condition entirely suitable for its development and use in accordance with this Agreement. b. Owner agrees to perform and be solely responsible for the clean -up of any Hazardous Materials on, in, under or within the Property, at the sole cost, risk and expense of Owner. Owner shall defend, indemnify and hold harmless the Authority and the Indemnified Parties from any claims, liability, injury, damages, costs and expenses (including, without limiting the generality of the foregoing, the cost of any required clean up of Hazardous Materials, and the cost of attorneys’ fees) which may be sustained as the result of the presence or clean up of Hazardous Materials on, in, or under the Property. As a condition precedent to the Close of Escrow, Owner shall execute and deliver to the Authority the Environmental Indemnity attached hereto as Attachment No. 12.

Section 303 Scope of Development
The Property shall be developed in accordance with and within the limitations established in the Scope of Development attached to this Agreement as Attachment No. 4 and plans approved by the Authority pursuant to this Agreement and permits issued by the City.

Section 304 Basic Concept and Schematic Drawings
a. The Owner shall prepare and submit Basic Concept and Schematic Drawings and related documents for the development of the Property to the Authority for review and written approval within the time established in the Schedule of Performance. Basic Concept and Schematic Drawings shall include a site plan, elevations and sections of the improvements as they are to be developed on the Property.
b. The Property shall be developed as established in the Basic Concept and Schematic Drawings and related documents except as changes may be mutually agreed upon between the Owner and the Authority. Any such changes shall be within the limitations of the Scope of Development.

Section 305 Landscaping and Grading Plans
a. The Owner shall prepare and submit to the Authority for its approval preliminary and final landscaping and preliminary and finish grading plans for the Property. These plans shall be prepared and submitted within the times established in the Schedule of Performance.

Affordable Housing Agreement Agreement No: A-8908
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b. The landscaping plans shall be prepared by a professional landscape architect and the grading plans shall be prepared by a licensed civil engineer. Such landscape architect and/or civil engineer may be the same firm as the Owner’s architect. Within th e times established in the Schedule of Performance, the Owner shall submit to the Authority for approval the name and qualifications of its architect, landscape architect and civil engineer.

Section 306 Construction Drawings and Related Documents a. The Owner shall prepare and submit construction drawings and related documents (collectively called the “Plans”) to the Authority for review (including but not limited to architectural review), and written approval in the times established in the Schedule of Performance (Attachment No. 5). Such construction drawings and related documents shall be submitted as 50% and Final Construction Drawings. Final Construction Drawings are hereby defined as those in sufficient detail to obtain all building permits. b. Approval of progressively more detailed Plans will be promptly granted by the Authority if developed as a logical evolution of Plans theretofore approved. Any items so submitted and approved by the Authority shall not be subject to subsequent disapproval. c. During the preparation of all Plans, the Authority and the Owner shall hold regular progress meetings to coordinate the preparation of, submission to, and review of Plans and related documents by the Authority. The Authority and the Owner shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Authority can receive prompt and speedy consideration.
d. If any revisions or corrections of Plans approved by the Authority shall be required by any government official, agency, department, or bureau having jurisdiction over the development of the Property, the Owner and the Authority shall cooperate in efforts to obtain waiver of such requirements or to develop a mutually acceptable alternative.

Section 307 Authority Approval of Plans
a. Subject to the terms of this Agreement, the Authority shall have the right of review (including without limitation architectural review) of all Plans and submissions, including any proposed substantial changes to any such Plans or submissions approved by Authority. The Authority shall approve or disapprove the Plans referred to in Sections 304, 305 and 306 of this Agreement within the times established in the Schedule of Performance. The Owner, upon receipt of a disapproval based upon powers reserved by the Authority hereunder shall revise the Plans, and shall resubmit to the Authority as soon as possible after receipt of the notice of disapproval.

The Authority shall approve or disapprove any revised Plans within thirty (30) days after receipt.

Any disapproval shall state in writing the reasons for disapproval and any changes to submitted Plans which the Authority determines must be made to obtain approval. Such reasons and such changes must be consistent with the Scope of Development and any items previously approved hereunder; provided, however, that Authority’s failure to notify Owner of approval or disapproval within thirty (30) days shall not be deemed to be approval of any matter.

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b. I
f the Owner desires to make any substantial change in the Final Construction Drawings after their approval, such proposed change shall be submitted to the Authority for approval.

Section 308 Method of Financing
a. The Project shall be financed with the PLHA Loan to pay for Development Costs in accordance with the PLHA Agreement.
b. T
he cost of constructing the improvements on the Property, including any offsite or onsite improvements in connection therewith, shall be the responsibility of the Owner, without any cost to Authority.
c. R eplacement Reserve. Prior to the Release of Construction Covenants for the Property, the Owner shall be required to establish a replacement reserve fund (the “Replacement Reserve”) to provide adequate cash supplements to replace medium and/or long- term capital improvements with respect to the Property. The Replacement Reserve shall be initially funded with any remaining contingency funds as set forth in the approved Project Budget and maintained in accordance with terms and conditions set forth in the Agreement Containing Covenants.

Section 309 Sc
hedule of Performance
a. Each party to this Agreement shall perform the obligations to be performed by such party pursuant to this Agreement within the respective times provided in the Schedule of Performance, and if no such time is provided, within a reasonable time. The Schedule of Performance shall be subject to amendment from time to time upon the mutual written agreement of the Executive Director and Owner.
b. After the Close of Escrow , the Owner shall promptly begin and thereafter diligently prosecute to completion the Project as provided in the Scope of Development. The Owner shall begin and complete all development within the times specified in the Schedule of Performance with such reasonable extensions of said dates as may be granted by the Executive Director, provided Owner submits a timely written request with substantiating documentation that establishes good cause for such an extension, and provided such an extension will not have a detrimental affect on the Authority’s interests.
c. During periods of construction, the Owner shall submit to the Authority a written report of the progress of construction when and as reasonably requested by the Authority, but not more frequently than once every quarter. The report shall be in such form and detail as may be reasonably required by the Authority and shall include a reasonable number of construction photographs (if requested) taken since the last report by the Owner.

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Section 310 Indemnification and Insurance
a. Owner’s Indemnity. To the maximum extent permitted by law, Owner agrees to and shall defend, indemnify and hold harmless the Authority and the Indemnified Parties from and against all claims, liabilities, losses, damages, costs or expenses (including reasonable attorneys’ fees and court costs) arising from or in any way connected with any of the following ; provided, however, Owner shall not be responsible for (and such indemnity shall not apply to) any gross negligence or willful misconduct of the Authority or the Indemnified Parties:
(1) The existence, release, presence or disposal on, in, under, about or adjacent to the Property of any Hazardous Materials;
(2) The development, construction, marketing, use, operation or condition of the Property and the improvements thereon by Owner, its contractors, subcontractors, agents, employees or other persons acting on Owner’s behalf; (3) Any accident, personal injury or casualty on the Property or the improvements thereon;
(4) Any Plans or designs for improvements prepared by or on behalf of Owner or its contractors, subcontractors, agents, employees or other persons acting on Owner’s behalf, including without limitation any errors or omissions with respect to such Plans or designs; (5) Any loss or damage to Authority resulting from any inaccuracy in or breach of any representation or warranty of Owner, or resulting from any breach or default by Owner, under this Agreement;
(6) Claims of any kind in connection with the purchase of the Property including, without limitation, claims for relocation assistance pursuant to the California Relocation Law, Government Code Section 7260, inverse condemnation, taking, threatened taking or temporary taking or loss of good will;
(7) Any and all actions, claims, damages, injuries, challenges and/or costs or liabilities arising from the approval of any and all entitlements or permits for the Project by the Authority.

The obligation to indemnify will not be construed to negate, abridge, or otherwise reduce other rights or obligations of indemnity which would otherwise exist as to the Authority or the Indemnified Parties. The foregoing indemnification will apply to the extent of the violation of a legal duty, including but not limited to active or passive negligence, strict liability, breach of contract, or intentional or willful misconduct, by Owner 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 Owner may be responsible. The Authority and Indemnified Parties will be entitled to recover attorneys’ fees incurred as a result of Owner’s failure to provide the defense and indemnity required by this Section. The foregoing indemnities will survive termination of this Agreement.

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b. Insurance Policies.
(1) Commencing upon the first to occur of (i) the entry by Owner onto the Property for any purposes hereunder and (ii) the Close of Escrow, and until the full reconveyance of the Authority Deed of Trust, Owner shall maintain in effect and deliver to the Authority duplicate originals or appropriate certificates of the following insurance policies (the “Insurance Policies”) naming the Authority and the Indemnified Parties as additional insureds or loss payees, as their interests may appear:
(A) All-Risk Policies: Owner will furnish evidence of, and will thereafter maintain or cause to be maintained a policy or policies of insurance against direct physical loss or damage by fire, lightning, wind, storm, explosion, collapse, underground hazards, flood, vandalism, malicious mischief, glass breakage and such other causes as are covered by such form of insurance. Such policy will include (1) an endorsement for broad form property damage, breach of warranty, demolition costs and debris removal, (2) a “Replacement Cost Endorsement” in an amount sufficient to prevent Owner from becoming a co-insurer under the terms of the policy, but in any event in an amount not less than 100% of the then full replacement cost, to be determined at least once annually and subject to reasonable approval by Authority, and (3) an endorsement to include coverage for budgeted soft costs. The replacement cost coverage will be for work performed and equipment, supplies and materials furnished to the Property or any adjoining sidewalks, streets and passageways, or to any bonded warehouse for storage pending incorporation into the work, without deduction for physical depreciation and with a deductible not exceeding $25,000 per occurrence (except that earthquake coverage, if required by the Authority, will carry a deductible not to exceed 25% of the policy amount, or such other deductible amount as the Authority may reasonably determine is acceptable, in light of the cost of the premium for such insurance);
(B) Liability Insurance: Owner will maintain or cause to be maintained general liability insurance, 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 and the business of Owner on the Property, or in connection with the operation thereof, resulting directly or indirectly from any acts or activities of Owner, or any person acting for Owner, or under its 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 Property, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Owner or any person acting for Owner, or under its control or direction. Such property damage and personal injury insurance will also provide for and protect the Indemnified Parties against incurring any legal cost in defending claims for alleged loss. Such personal injury and property damage insurance will be maintained in full force and effect until Completion of the Project in the following amounts: commercial general liability in a general aggregate amount of not less than Five Million Dollars ($5,000,000), Products and Completed Operations Aggregate of not less than Two Million Dollars ($2,000,000) and One Million Dollars ($1,000,000) each occurrence. Owner agrees that provisions of this paragraph as to maintenance of insurance will not be construed as limiting in any way the extent to which Owner may be held responsible for the indemnification of the Indemnified Parties or the payment of Affordable Housing Agreement Agreement No: A-8908
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damages to persons or property resulting from Owner’s activities or the activities of any other person or persons for which Owner is otherwise responsible. (C) Automobile Insurance: Owner will maintain or cause to be maintained Commercial Automobile Liability insurance in an amount of not less than Two Million Dollars ($2,000,000) combined single limit, including owned, non- owned and hired automobile coverage.
(D) Workers’ Compensation Insurance: Owner shall maintain or cause to be maintained 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 Owner in connection with the Property 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 Property or the operation thereof by Owner. Notwithstanding the foregoing, Owner 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 Owner shall deliver to Authority evidence that such self-insurance has been approved by the appropriate State authorities.

2. All policies or certificates of insurance shall provide that such policies shall not be canceled, reduced in coverage or limited in any manner without at least thirty (30) days prior written notice to Authority. All fire and liability insurance policie s (not automobile and Workers’ Compensation) shall name the Authority, the Indemnified Parties, and Owner as insureds, additional insureds, and/or loss payable parties as their interests may appear.

3. The Insurance Policies shall name as additional insureds the following:
“The Housing Authority of the City of Palmdale and its elected officials, officers, employees, agents, consultants, contractors, attorneys, and representatives.”

4. Owner 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 insurance. Owner agrees to submit endorsements and binder s or certificates evidencing such insurance to Authority at least 15 days prior to the Closing. Within thirty (30) days, if practicable, but in any event prior to expiration of any such policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be submitted to Authority.

All insurance herein provided for under this Section shall be provided by insurers licensed to do business in the State of California and rated A-VII or better.

5. Owner must 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. In addition, Owner must cause its architects and engineers to maintain Architects and Engineers Professional Liability (Errors and Omissions) insurance on a “claims made basis” in an amount of not less One Million Dollars ($1,000,000). When coverage is provided on a “claims Affordable Housing Agreement Agreement No: A-8908
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made basis”, Owner must cause all contractors and subcontractors to continue to renew the insurance, with the same coverage and limits, for a period of ten (10) years after Completion of the Project, providing coverage for all claims arising out of any acts or omissions of Owner, or its officers, employees or agents.

6. If Owner fails or refuses to procure or maintain insurance as required by this Agreement, the Authority will have the right, but not the obligation, at Authority’s election, and upon ten (10) days prior notice to Owner, to procure and maintain such insurance. The premiums paid by the Authority will be treated as a loan, due from Owner, to be paid on the first day of the month following the date on which the premiums were paid. The Authority will give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s).

7. Owner shall have the right in its discretion to provide the insurance coverage required by this Section through one or more umbrella policies, so long as the type and level of insurance protection to be maintained by Owner in accordance with this Section is not diminished by so doing (as reasonably determined by the Authority).

Section 311 Nondiscrimination
Owner shall not discriminate on the basis of race, gender, religion, national origin, ethnicity, sexual orientation, age or disability in the solicitation, selection, hiring or treatment of any contractors or consultants, to participate in subcontracting/subconsulting opportunities. Owner understands and agrees that violation of this clause shall be considered a material breach of this Agreement and may result in termination, debarment or other sanctions. This language shall be incorporated into all contracts between Owner and any contractor, consultant, subcontractor, subconsultants, vendors and suppliers.

Section 312 Local, State and Federal Laws
a. Owner hereby agrees to carry out the rehabilitation, construction, development (as defined by applicable law) and operation of the improvements on the Property, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable federal a nd state labor laws, including, without limitation, the payment of state prevailing wages for the Project. Owner also covenants and warrants that it will comply with all applicable laws, ordinances, codes, rules and regulations of the state local and federal governments, and all amendments thereto. Owner also agrees to take such action as the federal, state or local government may direct to enforce aforesaid provisions. b. Owner hereby agrees that Owner shall 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. Owner hereby agrees that Owner shall have the obligation to provide and maintain any and all bonds to secure the payment to 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 Affordable Housing Agreement Agreement No: A-8908
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f
rom time to time, or any other provision of law. Owner hereby agrees that Owner shall have the obligation, at Owner’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. Owner shall indemnify, protect, defend and hold harmless the Authority and the Indemnified Parties, with counsel reasonably acceptable to Authority, from and against any and all loss, liability, damage, claim, cost, expense, and/or “increased costs” (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the rehabilitation, construction, development (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 Owner of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, 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 Owner to provide any required disclosure, representation, statement, rebidding and/or identification 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; (4) failure by Owner to provide and maintain any and all bonds to secure the payment to 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; and/or (5) failure by Owner 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. c. It is agreed by the parties that, in connection with the construction, development (as defined by applicable law) and operation of the Project, including, without limitation, any public work (as defined by applicable law), Owner shall bear all risks of payment or non payment of state prevailing wages and/or the implementation of 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 312 shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time.
d. The foregoing indemnity shall survive termination of this Agreement.

Section 313 P
ermits
Before commencement of construction of any buildings, structures or other work of improvement upon any portion of the Property, the Owner shall, at its own expense, secure or cause to be secured, any and all permits which may be required by the City or any other governmental agency affected by such construction or work.

Section 314 R ights of Access
Representatives of the Authority shall have the reasonable right of access to the Property, upon 24 hours’ written notice to Owner (except in the case of an emergency, in which case Affordable Housing Agreement Agreement No: A-8908
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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, including, but not limited to, the inspection of the work being performed in constructing the Project.

Section 315 Disclaimer of Responsibility by Authority
The Authority neither undertakes nor assumes nor will have any responsibility or duty to Owner or to any third party to review, inspect, supervise, pass judgment upon or inform Owner or any third party of any matter in connection with the construction or development of the Project, whether regarding the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Property, any person furnishing the same, or otherwise. Owner and all third parties shall rely upon its or their own judgment regarding such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Owner or to any third party by the Authority in connection with such matter is for the public purpose of developing the Property, and neither Owner (except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. The Authority shall not be responsible for any of the work of construction of the Property.

Section 316 Taxes, Assessments, Encumbrances and Liens
Owner shall pay when due, but not later than the imposition of any penalty, all real estate taxes and assessments assessed and levied on or against the Property. Prior to the full reconveyance of the Authority Deed of Trust, Owner shall not place, or allow to be placed, on title to the Property or any portion thereof, any mortgage, trust deed, encumbrance or lien not authorized by this Agreement. In addition, Owner shall remove, or shall have removed, any levy or attachment made on title to the Property (or any portion thereof), or shall assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. The covenants of the Owner set forth in this Section 316 shall remain in effect until full reconveyance of the Authority Deed of Trust.

Section 317 Prohibition against Transfer
a. Prior to the full reconveyance of the Authority Deed of Trust, Owner shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property or the improvements thereon, without prior written approval of the Authority, which may be withheld in its sole and absolute discretion. To the extent Authority approval of an assignment or transfer is required by this Agreement, in granting or withholding its approval, Authority shall base its decision upon the relevant experience, financial capability, and reputation of the proposed assignee or transferee, and the effect, if any, of such proposed transfer on the public purposes of this Agreement. In addition, Authority shall not approve any assignment or transfer of this Agreement or any interest herein or significant change in ownership of the Owner that would result in payment of consideration to any Person from the net proceeds of a sale or refinance of the Property or the Project, or any portion thereof or interest therein, prior to full Affordable Housing Agreement Agreement No: A-8908
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reconveyance of the Authority Deed of Trust. This prohibition shall not be deemed to prohibit Permitted Transfers.
b. In the event Owner does or attempts to assign this Agreement or any of the rights herein, or does or attempts to sell, transfer, convey or assign the Property or the buildings or structures thereon prior to the full reconveyance of the Authority Deed of Trust without the approval of the Authority in violation of this Agreement, subject to the notice and cure provisions of Section 501, the Authority shall have the right to terminate this Agreement. c. In the absence of a specific written agreement by the Authority, no such sale, transfer, conveyance or assignment of this Agreement or the Property (or any portion thereof), or approval by the Authority of any such sale, transfer, conveyance or assignment, shall be deemed to relieve Owner or any other party from any obligations under this Agreement.

Section 318 Removal of Liens and Encumbrances
Owner shall not allow any liens or encumbrances to be placed on the Property, except as expressly provided by this Agreement or otherwise approved in writing by the Authority, and shall promptly take all necessary actions to remove any such liens or encumbrances.

Section 319 Release of Construction Covenants
a. Promptly after C ompletion of the Project , as generally and specifically required by this Agreement and in particular the Scope of Development, the Authority shall furnish Owner with a Release of Construction Covenants in the form reasonably acceptable to the Owner upon written request therefor by Owner. The Authority shall not unreasonably withhold such Release of Construction Covenants and such Release of Construction Covenants shall be issued so long as Owner has constructed and developed the Project in accordance with this Agreement and the Plans approved by the Authority pursuant hereto. 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 Recorder’s Office of Los Angeles County. A Release of Construction Covenants for construction of less than the completed improvements and development of the entire Project shall not be recorded.

c. If the Authority refuses or fails to furnish a Release of Construction Covenants for the Project after written request from Owner, the Authority shall, within thirty (30) days of the written request, provide Owner with a written statement of the reasons the Authority refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the Authority’s opinion of the action Owner must take to obtain a Release of Construction Covenants. If the reason for such refusal is confined to the immediate availability of specific items or materials for landscaping, and/or minor items, the Authority will issue its Release of Construction Covenants upon the posting of a bond by Owner with the Authority in an amount Affordable Housing Agreement Agreement No: A-8908
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representing the fair value of the work not yet completed. If the Authority shall have failed to provide such written statement within said 30-day period, Owner shall be deemed to have received the Release of Construction Covenants.

d. Such Release of Construction Covenants shall not constitute evidence of compliance with, or satisfaction of any obligation of Owner to the beneficiary of the Authority Deed of Trust. Such Release of Construction Covenants is not notice of completion as referred to in Section 3093 of the California Civil Code.

PART 4. USE OF THE PROPERTY
Section 401 Uses
Owner, its successor and assigns shall use the Property only for the uses specified in t he Agreement Containing Covenants, the Scope of Development, and this Agreement specifically including the following:

a. The Property shall be developed and used for the operation of affordable housing, consisting of a duplex rental apartment with two (2) two-story units (3 bedrooms/ 2 bath per unit) rented exclusively to L ow Income Households at an A ffordable Rent (the “Affordable Units”). No change in the use of the Property shall be permitted without the prior written approval of the Authority.

b. The maximum incomes of residential tenants eligible to rent the Affordable Units shall be determined on the basis of the area median income (“ AMI”) for Los Angeles County, published from time to time by the California Department of Housing and Community Development. Each of the Affordable Units shall be available to and occupied by persons and families whose gross incomes do not exceed sixty percent (60%) of the AMI, adjusted for family size appropriate for the unit.

c. The maximum monthly rent (including a reasonable utility allowance) that may be charged to tenants of the Affordable Units shall be calculated as follows: 1/12 times the product of thirty percent (30%) times sixty percent (60%) of the AMI, adjusted for family size appropriate for the unit.

d. Owner agrees that prior to the initial rent-up of the Affordable Units, Owner shall consult with and obtain the approval of the Authority in developing a fair marketing plan for renting the Affordable Units.

e. Authority, and its successors and assigns, shall have the right, but not the obligation, to monitor and enforce the covenants contained in this Section 401. Owner covenants that it shall comply with any monitoring program set up by Authority enforce said covenants. In complying with such monitoring program, Owner or its agent shall prepare and submit to Authority Affordable Housing Agreement Agreement No: A-8908
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an occupancy report, financial information and income verification documents for each tenant of an Affordable Unit, and all supporting documentation, on forms provided by Owner, annually, setting forth the required information for the preceding year. On an annual basis, Owner or its agent shall additionally submit to Authority evidence of each tenant’s continuing eligibility for the Affordable Units. Authority shall review such reports for certification of continuing affordability of Affordable Units and eligibility of tenants.

f. No officer, employee, agent, official or consultant of Owner may occupy any of the Affordable Units.

g. Owner hereby covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property or any portion thereof that Owner, its successors and assigns, shall promptly register the Property with the City’s Rental Program and thereafter maintain said registration.

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

Section 402 Maintenance of the Property
a. Owner hereby covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property or any portion thereof that Owner, its successors and assigns, shall maintain the Property and the Project on the Property in the same aesthetic and sound condition (or better) as the condition of the Property and Project at the time Owner receives the final certificate of occupancy from the City . This standard for the quality of maintenance of the Property shall be met whether or not a specific item of maintenance is listed below. However, representative items of maintenance shall include frequent and regular inspection for graffiti or damage or deterioration or failure, and immediate repainting or repair or replacement of all surfaces, fencing, walls, equipment, etc., as necessary; emptying of trash receptacles and removal of litter; sweeping of public sidewalks adjacent to the Property, on-site walkways and paved areas and washing-down as necessary to maintain clean surfaces; maintenance of all landscaping in a healthy and attractive condition, including trimming, fertilizing and replacing vegetation as necessary; cleaning windows on a regular basis; painting the buildings on a regular program and prior to the deterioration of the painted surfaces; conducting a roof inspection on a regular basis and maintaining the roof in a leak- free and weather-tight condition; maintaining security devices in good working order.

b. If the Authority gives written notice to Owner that the maintenance or condition of the Property or any portion thereof or any other improvements thereon does not comply with this Agreement, Owner shall correct, remedy or cure the deficiency within thirty (30) days following the date of such notice, unless the notice states that the deficiency is an urgent matter relating to public health and safety, in which case, Owner shall cure such deficiency within forty-eight (48) hours following the date of the notice. In the event Owner fails to cure any such Affordable Housing Agreement Agreement No: A-8908
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deficiencies within the applicable period described above, the Authority shall have, in addition to any other rights and remedies hereunder, the right to maintain the Property or any portion thereof or any other improvements thereon or to contract for the correction of any deficiencies, and Owner shall be responsible for payment of all such costs actually and reasonably incurred by the Authority and such payment shall constitute a lien on the Property until paid by the Owner pursuant to California Civil Code Section 2881.
c. The Agreement Containing Covenants shall contain appropriate provisions implementing this Section 402.

Section 403 Obligation to Refrain from Discrimination
Owner covenants and agrees for itself, its successors and its assigns in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Owner itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property.

Section 404 Form of Nondiscrimination and Nonsegregation Clauses Owner shall refrain from restricting the rental, sale or lease of the P roperty on the basis of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry of any person. All such deeds, leases or contracts entered into after the date on which this Agreement is executed by the Authority 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 Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segr egation 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 Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the 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 405 Effect and Duration of Covenants
The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Authority for such periods as set forth herein. Those certain covenants also contained in the Agreement Containing Covenants shall remain in effect for the periods specified therein.

Section 406 Agreement Containing Covenants
Concurrently with the Close of Escrow, Owner and Authority shall execute and cause the recordation of the Agreement Containing Covenants substantially in the form attached to this Agreement as Attachment No. 6. Concurrently with the Close of Escrow , Authority (and Owner if requested by Authority) shall execute and cause the recordation of the Notice of Affordability Restrictions on Transfer of Property substantially in the form attached to this Agreement as Attachment No. 14. The Notice of Affordability Restrictions on Transfer of Property is required to be recorded against the Property pursuant to California Health and Safety Code Section 33334.3(f).

Section 407 Monitoring

The parties acknowledge that this Agreement is subject to the provisions of Section 33418 of the California Health and Safety Code, which provides in pertinent part:

Affordable Housing Agreement Agreement No: A-8908
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“(a) An agency shall 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 shall require owners or managers of the housing to submit an annual report to the agency. The annual reports shall include for each rental unit the rental rate and the income and family size of the occupants. The income information required by this section shall be supplied by the tenant in a certified statement of a form provided by the agency.”

Owner shall submit to the Authority on an annual basis the annual report required by said Section 33418. The annual report shall include for each Affordable Unit the rental rate and the income and family size of the occupants. The income information shall be supplied by the tenant in a certified statement on a form provided by the Authority.

Owner shall provide for the submission of such information in its lease or occupancy agreement with tenants.

PART 5. DEFAULTS AND REMEDIES
Section 501 Defaults - General
a. Subject to the extensions of time set forth in Section 602, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who fails or delays must commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. b. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. 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 party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. c. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default written notice of such default. The party in default 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 the injured party. d. If a non-monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days after such notice is received or deemed received, the party in default shall have such period to effect a cure prior to exercise of remedies by the injured party. If the default is such that it is not reasonably capable of being cured Affordable Housing Agreement Agreement No: A-8908
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within thirty (30) days, and the party in default (1) initiates corrective action within said period, and (2) 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 a s is reasonably necessary to cure the default prior to exercise of any remedies by the injured party, but in no event shall such period exceed sixty (60) days from the date such notice is received or deemed received. In no event shall 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
In addition to any other rights or remedies (and except as otherwise provided 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 must be instituted in the Superior Court of the County of Los Angeles, State of California, in any other appropriate court of that county.

Section 503 Applicable Law
The laws of the State of California shall govern the interpretation and enforcement of this Agreement.

Section 504 Acceptance of Service of Process
a. In the event that any legal action is commenced by the Owner against the Authority, service of process on the Authority shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. b. In the event that any legal action is commenced by the Authority against the Owner, service of process on the Owner shall be made by personal service upon the Owner (or upon a general partner, managing member or officer of the Owner) 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 Are Cumulative
The rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

Section 506 Damages
Subject to the notice and cure provisions of Section 501, if either party defaults with regard to any of the provisions of this Agreement, the non- defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the time provided in Section 501, the defaulting party shall be liable to the non-defaulting party for any damages caused by such default, and the non-defaulting party may thereafter (but not before) commence an action for damages against the defaulting party with respect to such default.

Affordable Housing Agreement Agreement No: A-8908
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Section 507 Specific Performance
Subject to the notice and cure provisions of Section 501, if either party defaults with regard to any of the provisions of this Agreement, the non- defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured within the time provided in Section 501, the non-defaulting party, at its option, may thereafter (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default.

Section 508 Termination by Authority
Subject to the notice and cure provisions of Section 501, Authority shall have the right to terminate this Agreement prior to Close of Escrow by providing written notice to Owner in the event any of the following occurs:
(1) failure of any condition precedent to the occurrence of the Close of Escrow; or
(2) Owner (or any successor in interest) assigns or attempts to assign the Agreement or any right therein, or transfers the Property (or any portion thereof or interest therein), in violation of this Agreement; or
(3) there is substantial change in the ownership of the Owner, or with respect to the identity of the parties in control of Owner, or the degree thereof in violation of this Agreement; or
(4) Owner fails to submit any of the plans, drawings and related documents required by this Agreement by the respective dates provided in Schedule of Performance therefor.

Section 509 Reentry and Revesting of Title in Authority a. Right of Reentry. In additional to all other rights and remedies the Authority may have at law or in equity, the Authority has the right, at its election, to reenter and take possession of the Property , with all improvements thereon, and terminate and revest the Property in the Authority if after the Close of Escrow and prior to the issuance of the Release of Construction Covenants, Owner (or its successors in interest):

(1) fails to start the construction of the Project as required by this Agreement for a period of thirty (30) days after written notice thereof from Authority; or

(2) abandons or substantially suspends construction of the Project required by this Agreement for a period of thirty (30) days after written notice thereof from Authority; or

(3) transfers or suffers any involuntary transfer of the Property or any Affordable Housing Agreement Agreement No: A-8908
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part thereof in violation of contrary to the provisions of Section 317 or any other section of this Agreement.

b. Limitations on Right of Reentry. Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit:

(1) Any mortgage or deed of trust permitted by this Agreement; or

(2) Any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust.

c. Right of Reentry Referenced in Grant Deed. The Grant Deed shall contain appropriate reference and provision to give effect to Authority’s rights as set forth in this Section 509, to reenter and take possession of the Property, with all improvements thereon, and to terminate and revest in Authority the estate conveyed to Owner.

d. Resale By Authority After Revesting. Upon the revesting in Authority of title to the Property as provided in this Section 509, Authority shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Property as soon and in such manner as Authority shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties (as determined by Authority) who will assume the obligation of making or completing the Project, or such improvements in their stead as shall be satisfactory to Authority and in accordance with the uses specified for the Property or part thereof in the Redevelopment Plan.

e. Application of Resale Proceeds . Upon such resale of the Property by Authority, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Property which is permitted by this Agreement, shall be applied:

(1) First, to reimburse Authority, on its own behalf or on behalf of the City, all costs and expenses incurred by Authority or the City, including, but not limited to: any expenditures by Authority or the City in connection with the recapture, management and resale of the Property or part thereof (but less any income derived by Authority or the City from the Property or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Property or part thereof which Owner has not paid (or, in the event that Property is exempt from taxation or assessment of such charges during the period of ownership thereof by Authority, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at the time of revesting of title thereto in Authority, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Owner, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Property , or part thereof; and any Affordable Housing Agreement Agreement No: A-8908
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amounts otherwise owing Authority, and in the event thereafter available; and

(2) Second, to reimburse Owner , its successor or transferee, up to the amount equal to the sum of (i) the costs incurred for the acquisition and development of the Property and for the improvements existing on the Property at the time of the reentry and possession, less (ii) any gains or income withdrawn or made by Owner from the Property or the improvements thereon.

(3) Any balance remaining after such reimbursements shall be retained by Authority as its property. The rights established in this Section 509 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. The rights are to be interpreted in light of the fact that Authority will have conveyed the Property to Owner for redevelopment purposes, particularly for development of the Project and not for speculation.

PART 6. GENERAL PROVISIONS
Section 601 Notices
Formal notices, demands and communications between Authority and Owner shall be deemed sufficiently given if dispatched by first class mail, registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission followed by delivery of a “hard” copy, or by personal delivery (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), to the addresses of Authority and Owner as set forth in Sections 106 and 107 hereof. 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. 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 o n 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.

Section 602 Enforced Delay: Extension of Time of Performance a. Performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarant ine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, third party litigation, unusually severe weather, inability to secure necessary labor, material or tools, delays of any contractor, subcontractor or supplier, acts of the other party, or acts or failure to act of the City of Affordable Housing Agreement Agreement No: A-8908
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Palmdale or any other public or governmental agency or entity (except that acts or failure to act of Authority shall not excuse performance of Authority).
b. An extension of time for any such cause (a “Force Majeure Delay”) shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date and the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty (30) days after it obtains actual knowledge of the event. Times of performance under this Agreement may also be extended in writing by the Authority and the Owner.

Section 603 Conflict 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 the 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. Owner warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement.

Section 604 Nonliability of Authority Officials and Employees No member, official, agent, legal counsel or employee of Authority shall be personally liable to Owner, or any successor in interest in the event of any default or breach by Authority or for any amount which may become due to Owner or successor or on any obligation under the terms of this Agreement.

Section 605 Inspection of Books and Records
a. Owner shall maintain complete, accurate, and current records pertaining to the Property for a period of five (5) years after the creation of such records, and shall permit any duly authorized representative of the Authority to inspect and copy records, during regular business hours upon reasonable advance notice. Records must be kept accurate and current. b. The Authority reserves the right to inspect, monitors, and observe work and services performed by Owner at any and all reasonable times. c. The Authority reserves the right to audit the records of Owner any time during the performance of this Agreement and for a period of five years after final payment is made under this Agreement.

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Section 606 Approvals
a. Except as otherwise expressly provided in this Agreement, approvals required of Authority or Owner in this Agreement, including the attachments to this Agreement, shall not be unreasonably withheld or delayed. All approvals shall be in writing. Failure by either party 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 the Authority shall be deemed granted by the written approval of the Executive Director or designee. Notwithstanding the foregoing, the Executive Director may, in his or her sole discretion, refer to the Authority Board any item requiring Authority approval; otherwise, “Authority approval” means and refers to approval by the Executive Director or designee.

Section 607 Real Estate Commissions
Neither Owner nor Authority shall be liable for any real estate commissions or brokerage fees which may arise from this Agreement. Owner and Authority each represents that it has engaged no broker, agent or finder in connection with this Agreement.

Section 608 Construction and Interpretation of Agreement 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 any party.

The parties hereto acknowledge and agree that this Agreement has been prep ared jointly by the parties and has been the subject of arm’s length and careful negotiation over a considerable 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 any party hereunder, 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 parties hereto 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 illegal, 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.

Affordable Housing Agreement Agreement No: A-8908
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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 incorporat ed 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) shall mean, refer to, and include the covenants, obligations, and undertakings existing pursuant to this instrument and 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 includes the plural and vice versa, and the masculine gender includes the feminine and vice versa.

Section 609 Time of Essence
Time is of the essence with respect to the performance of each of the covenants and agreements contained in this Agreement.

Section 610 No Partnership
Nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture, or any other similar relationship between the parties hereto or cause Authority to be responsible in any way for the debts or obligations of Owner or any other Person.

Section 611 Compliance with Law
Owner 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 Project. The judgment of any court of competent jurisdiction, or the admission of Owner or any lessee or permittee in any action or proceeding against them, or any of them, whether Authority be a party thereto or not, that Owner, lessee or permittee has violated any such ordinance or statute in the development and use of the Property s hall be conclusive of that fact as between Authority and Owner.

Section 612 Binding Effect
This Agreement, together with the agreements, covenants and warranties contained herein, shall be binding on and shall inure to the benefit of the parties hereto and all of their respective successors and assigns, whether voluntary or involuntary or by agreement or operation of law.

Section 613 No Third Party Beneficiaries
The parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of Authority and Owner, and not for the benefit, directly or indirectly, of any other person or entity, except as otherwise expressly provided herein.

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Section 614 Authority to Sign
Owner hereby represents that the persons executing this Agreement on behalf of Owner have full authority to do so and to bind Owner to perform pursuant to the terms and conditions of this Agreement.

Section 615 Incorporation by Reference
Each of the attachments and exhibits attached hereto is incorporated herein by this reference.

Section 616 Counterparts
This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument.

Section 617 Severability
If any provision of this Agreement shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions of this Agreement shall not be affected thereby, but this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been contained herein, and the remainder of this Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been contained in it.

PART 7. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
a. This Agreement constitutes the entire understanding and agreement of the parties.
b. This Agreement integrates all of the terms and conditions mentioned herein or incidental to this Agreement, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. c. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of Authority or Owner, and all amendments to this Agreement must be in writing and signed by the appropriate authorities of Authority and Owner.

[Remainder of Page Intentionally Left Blank; Signatures on Following Page] Affordable Housing Agreement Agreement No: A-8908
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Page S-1

IN WITNESS WHEREOF, the Authority and Owner have signed this Agreement as of the date first written above.
“AUTHORITY”

THE HOUSING AUTHORITY OF THE CITY

OF PALMDALE

By: ________________________________
Ronda Perez
Executive Director

ATTEST:

By: ________________________________
Roxanne Faber
Authority Secretary

APPROVED AS TO FORM:

By: ________________________________
William P. Curley, III
Authority Counsel

KANE, BALLMER & BERKMAN

By: ________________________________
Susan Apy
Authority Special Counsel
“OWNER”

ADVANCING COMMUNITIES TOGETHER,
a California nonprofit public benefit corporation

By:____________________________________
Rossie D. Cherry
Chief Executive Officer

By:____________________________________
Olivia Cherry
Executive Director

Affordable Housing Agreement Agreement No: A-8908
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ATTACHMENT NO. 1

SITE MAP
[behind this page]

17(17
12990±SF
16 (28
15 (904
14(14
13(1312 (12
11 (11
10 (10
N 88°54'40"E 91.919
(9
8 (8
7(7
6 (26
5 (5
4 (4
3 (3
2 163.31
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1 156.80(1
9100±SF
18 (18
7040±SF
19(19 20(906
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39.47R=25

23.56R=15
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3006
17085 17086
AVE Q
PG
11AVE Q-1
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NO
15912
124.96

35.20 59.59 58.36
58 9283 SF
9660 SF
169.82
10038 SF
176.33
" "

58.37 58.36

58.37 10416 SF
182.85
" 58

58.36 10794 SF
189.36
105
60 105.40
R=15

23.56 4

24.89 19.24
6880±SF

35.50 9980±SF
10 143.92
135.91

32.99 8830±SF
R=40
R=40
100

36.11 145.91
12220±SF
8320±SF

41.91 120
144.68
105.40
105
6880±SF
60 32.37

19.24 24.89R=40
450M B 426 13 14
- -
129.36
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105
112.93
R=15

23.564.62 20.90

20.21 7040±SF
70 108.45
R=90

17.93 29.79

34.59 11200±SF
109.71
75 38.40
R=40
9540±SF
146.83
70 126.54
124.47
108.45

35.39 17.93

29.79 20.21

20.90R=90

23.56R=15

4.62 70
112.93
60 105
6910±SF50 7750±SF
65 105
R=15

23.56 50
120
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6565
120

59.47 118.09

28.40 41.37
3 R=370
20 20
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9 7920±SF
SHEET
P. A.
996-10
TRA
17085
17086

REVISED
10-24-62
710302

OFFICE OF THE ASSESSOR

COUNTY OF LOS ANGELES
COPYRIGHT © 2002

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ALL 900 SERIES PARCELS ON THIS PAGE ARE ASSESSED

TO THE HOUSING AUTHORITY OF THE CITY OF
PALMDALE, UNLESS OTHERWISE NOTED.

Date Saved: 7/21/2022 12:42:17 PM
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Affordable Housing Agreement Agreement No: A-8908
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ATTACHMENT NO. 2

LEGAL DESCRIPTION

Attachment 2- Legal Description
LEG

AL DESCRIPTION OF PROPERTY
R

EAL PROPERTY IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

TH

E PARCEL OF LAND IN THE CITY OF PALMDALE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AS SHOWN AS LOT 20 15 OF TRACT NO. 15912 RECORDED IN BOOK 426 PAGES 13 AND 14 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY A
PN 3008-010-904
Affordable Housing Agreement
Advancing Communities Together
Agreement No: A-8908
APN: 3008-010-904
AT
TACHMENT NO. 3

METHOD OF FINANCING
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Affordable Housing Agreement Agreement No: A-8908
Advancing Communities Together APN: 3008-010-904
Attachment No. 3 - Method of Financing

ATTACHMENT NO. 3
M

ETHOD OF FINANCING
T
his is the Method of Financing attached to the Affordable Housing Agreement (“AHA”) entered into between the HOUSING AUTHORITY OF THE CITY OF PALMDALE (“ Authority”) and ADVANCING COMMUNITIES TOGETHER (“Owner”). Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the AHA.

1. Total Acquisition and Development Costs. The parties estimate that the cost of acquiring the Property and developing and constructing the Project will be approximately $901,985.94, as provided in Section 2 below.

2. Sources and Uses of Financing. The parties anticipate that the a cquisition and Development Costs shall be financed with a combination of the Authority Loan and the PLHA Loan, as set forth below:

Sources of Funding Use of Funding
Authority Loan $80,000.00 Acquisition $80,000.00
PLHA Loan $821,985.94 Development Costs $821,985.94
Total Financed $901,985.94 $901,985.94
O
wner shall be responsible for providing any additional funds which may be needed to pay for cost overruns and contingencies not otherwise funded by the sources des cribed above. The Authority Loan is a carry back loan in an amount not to exceed $80,0000. The Authority Loan shall be repaid as set forth in the Authority Note.

3. Project Budget. All acquisition and Development Costs shall be as set forth in the Project Budget attached to the AHA as Attachment No. 7. Any amendment or change to the Project Budget shall require the written approval of the Executive Director or designee . Upon written Authority approval of any amendment or change , the Project Budget shall be replaced by the Authority-approved revised Project Budget.

4. Evidence of Financing. The sum of the sources of financing described above shall be sufficient at all times to pay all acquisition and Development Costs as set forth in the most recently Authority-approved Project Budget . Within the time provided therefor in the Schedule of Performance, Owner shall submit, for approval by the Executive Director or designee, evidence of such financing, including all of the following: (a) copies of all loan and other documents required by any financing source to obtain financing for Development Costs; (b) documentation evidencing the availability of any Owner equity; and (c) any other documents and information reasonably required by the City. To the extent that the sum of the sources of funds described above is insufficient to pay all a cquisition and Development Costs, prior to the Closing, Owner shall Affordable Housing Agreement Agreement No: A-8908
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Attachment No. 3 - Method of Financing

demonstrate the availability of other irrevocably committed or received funding sources at least equal to the shortfall.

5. Conditions Precedent to Closing

The Closing is conditioned upon the occurrence of each of the following conditions precedent for the benefit of the Authority on or prior to the Closing:

a. Owner submits, and the Executive Director or designee approves, a Project Budget, current as of the Closing (if different than the Project Budget attached to the AHA at the time of execution);

b. Owner submits, and the Executive Director or designee approves, the evidence of financing demonstrating to the satisfaction of the Authority the availability of sufficient funds to pay all Development Costs;

c. Owner submits, and the Executive Director or designee approves, insurance policies and endorsements required by the AHA;

d. Owner submits, and the Executive Director or designee approves, a copy of the fully executed general construction contract with the Authority- approved licensed general contractor, covering all construction work required by the Agreement and the approved final Plans;

e. Owner submits, and the Executive Director or designee approves, a contractor’s performance bond in an amount not less than One Hundred Percent (100%) of the costs to complete the Project and a payment bond guaranteeing the contractor’s completion of the work fre e from liens of materialmen, contractors, subcontractors, mechanics, laborers, and other similar liens, which must name the Authority and City as an additional obligees;

f. Owner executes, with signature notarized where required, and delivers to the City or Escrow Agent the following PLHA Loan documents;

(i) PLHA Agreement;
(ii) PLHA Note;
(iii) PLHA Deed of Trust;
(iv) PLHA Assignment of Agreements;
(v) PLHA Environmental Indemnity;
(vi) PLHA Assignment of Rents; and
(vii) PLHA Regulatory Agreement.

g. Owner executes, with signature notarized where required, and delivers to the City or Escrow Agent the following AHA documents;

(i) Agreement Containing Covenants;
Affordable Housing Agreement Agreement No: A-8908
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Attachment No. 3 - Method of Financing