Agenda packet — Santa Ana City Council, May 17, 2022 (part 8 of 9)

EXHIBIT 5
City Council 39 – 375 5/17/2022
CSI # DESCRIPTION
7-620 SHEETMETAL:
8-100 DOORS/FRAMES/HARDWARE:
8-430 STOREFRONT:
8-531 WINDOWS:
8-830
9-240 LATH & PLASTER:
9-290 DRYWALL/METAL STUDS:
9-310 TILE WORK:
9-510 ACOUSTICAL CEILINGS:
9-640 WOOD FLOORING:
9-650 RESILIENT FLOORING:
9-680
9-910 PAINTING:
10-000 SPECIALTIES:
10-130
10-140
10-211
10-212
10-280
10-300
10-410
10-440
10-550
11-400
Rolling vehicle entry gate and fence w/motor and safety loop. (4) Overhead metal garage doors.

LVP at corridors 1st - 4th floors.

Sheet vinyl, at trash rooms w/heat welded seams and 6" cove.

Shower Enclosures N/A
LVP at common areas, community room lounge and service provider space.

Smoke Guard M200, elevator smoke curtains.

Common areas doors frames, Schlage hardware
General sheet metal, door pans, deck flashing, scupper, conductor head, downspout, A/C pads, hot water equipment pad, parapet coping.

Unit doors, frames, Schlage hardware.

Drywall, light orange peel type texture.

MIRRORS:

Unit baths
ACT '24"x24" ceiling at (6) offices, (1) meeting room.

N/A.

Interior / Exterior painting.
2-1/4" x 4-1/2" dark bronze anodized aluminum TC 470 storefront mfr. Arcadia, 1/4" clear solar ban 90 dual glaze insulated units. (2) Common area Unisex restrooms, floors and walls 4' high wainscot.

Sheet vinyl at bathrooms w/heat welded seams and 6" flash cove.

LVP throughout units, living room, kitchen and bedroom.

CARPET:

Carpet Tile. N/A
Misc.transitions throughout common areas.

Entry Lobby floor and base tile.

Sheet vinyl, at laundry rooms w/heat welded seams and 6" cove.

Toilet Partitions N/A
Emergency Key Cabinets / Knox Boxes (3)
Fireplaces N/A
Graffiti coatings 9' AFF at areas with public access.

AMI 80 Series vinyl windows, white/white dual pane, Low-E glass. Removed (3) windows, changed to balcony doors.

Anderson E Series Swing patio doors, (82) doubles, (2) single. Added (3) balcony doors.

Lath / plaster, install 7/8" Thk. Stucco, 20/30 sand finish w/one integral color, W/2-Layers grade "D" 60 Min. Bldg. paper, w/ Structalath 1-1/2"x1-1/2"x17 ga. at vertical walls & Hi-Rib @ ceilings, w/ Fastwall "Fibered" plaster cement Parex La Habra for scratch and brown coats. Corridor walls & ceilings approx. 10' exposed from the exterior to the interior. Plaster drip screed at horizontal corners. Scratch and brown coats at tile walls. Plaster screed, decorative parapet element..

Directories (2)
Signage - code required
Light Gauge metal stud framing at drop ceilings and soffits.

Common area restroom accessories (2)
APPLIANCES:

Postal Specialties / Mailboxes
Fire Extinguishers / Cabinets (24) (excludes fire extinguishers at unit kitchens) Appliances for units, 18.2 ref, 30" electric range/oven, 30" hood, dishwashers in 2 and 3 bedroom units only.

Appliances for community room.

Washers and dryers By Owner

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EXHIBIT 5
City Council 39 – 376 5/17/2022
CSI # DESCRIPTION
11-680 PLAY EQUIPMENT:
12-210 BLINDS AND SHADES:
12-360 COUNTERTOPS:
12-931 BIKE RACKS:
14-200 ELEVATORS:
14-400 MAN LIFT/HOIST:
14-918 TRASH CHUTES:
21-130 FIRE SPRINKLERS:
22-333
22-000 PLUMBING:
22-100
23-300 HVAC:
26-310
26-000 ELECTRICAL:
26-050
26-320
26-510
26-200
28-130
28-230
28-310
32 SUBTOTAL: (Structures)
33 ACCESSORIES STRUCTURES:
34 TOTAL: (LINE 32 & 33)
31-000 EARTHWORK:
31-223
31-410
Solar Photovoltaic System. 2" condiut to roof for future use.

DAS / Emergency Responder Radio System,
Export of spoils, 500 Cu/Yd. max.

Rough-grading
On-site fine grade for curb and gutter and asphalt paving.

Manual Shades at common areas.

SOLAR HOT WATER SYSTEM:

Generator / Emergency N/A
Light Fixtures and lighting controls package
Fire Alarm System
LOW VOLTAGE:

Phone / Data / Television.

ALS System in community room.

Access Security System / Entry Controls (1) Door King 1835 LCD System.

Two Way Communication/Area of Refuge. 8 call stations.

Wi-Fi at common areas and outdoor courtyard. N/A
(1) Hikvision 32-camera system, (32) indoor/outdoor camera System.

Shoring N/A
Rough / Finish electrical
Condensate lines in line 22-100
Community room, break room, computer room, and laundry.

N/A, Building is under 60'.

Fire sprinklers, NFPA 13 designed system, POC 6" above ground, semi-recessed and UL listed heads.

Unit kitchens and baths, LG Hi-Macs solid surface, group 1 colors, w/integral bowl at bathrooms (2) Otis Gen2 elevator system, 3,500 lb., 150 FPM, 4 stop.

Additional attachment backing at each floor
(6) LA Hoop/Inverted "U" style, bike racks
Rough plumbing, per plans and specs
HVAC permit
Play area surfacing. N/A
(42) Dero Duplex style racks, single sided.

Transformer and main power panel

PHOTOVOLTAIC SYSTEM
Units, 3-1/2" PVC vertical louver blinds w/1" mini blinds at patio doors. (2) Trash Chutes.

HVAC per plans and specs.

Solar Hot Water System, N/A
Play Equipment. N/A
Finish plumbing

Page 3 ends

EXHIBIT 5
City Council 39 – 377 5/17/2022
CSI # DESCRIPTION
31-250
35-206
35-207
35-208
35-209
35-441
43-027
SITE UTILITIES:
33-100
33-300
33-400
33-510
33-700
CONCRETE PAVING:
32-131
32-161
32-121
32-172
SITE IMPROVEMENTS:
32-310
32-320
LANDSCAPING:
32-900
On-Site 3' wide concrete swale/gutter.

Off-Site City sidewalk.

Turf at lawn area.

Building 90 Day Maintenance Period
New CMU Perimeter screen wall 6' high w/footing.

On-site striping, standard ADA parking stalls w/stencil, standard parking stalls, install & post ADA signage, cross hatching.

ASPHALT PAVING:

Building Irrigation
On-Site, pedestrian walkway, rebar and compact base.

Gas lines up to meter, trenching for Gas Co.

Dry utility, Allowance.

Contract Compliance
8" Fire water w/backflows and (2) new on-site fire hydrants.

Off-site asphalt paving, 8" full depth AC slot patch 2' wide..

Off-Site City curb and gutter.

Erosion control
Traffic Control
Miscellaneous site labor
Sanitary Sewer,(1) 8" SDR PVC sewer laterals from POC (tap to main) in street to P/L add sewer laterals from P/L to building w clean out in yard box.

AC Paving:

Concrete Paving:

Storm Drainage, catch basins, atrium drains, area drains and roof drains area drains connection with all piping to storm water system. Diversion structure, Rect. overflow piping and curb drains w/transition fitting, ADS Stormtech MC-4500 system detention Cleanup / Dumpsters / Final Clean Up
Security 10 months
Miscellaneous site equipment
Air Pollution / Dust Control
Surveyor / Stake
Gray Water System. N/A
4" Domestic Water, 2" Irrigation water services, w/backflows Building planting, trees and shrubs
On-site asphalt paving, 6" asphalt over 9" Class II compacted base at parking area.

Site fences and gates 6' H and play area fence 42" H.

On-Site parking area landscape curbs.

Page 4 ends

EXHIBIT 5
City Council 39 – 378 5/17/2022
Exhibit C:

Project Budget
EXHIBIT 5
City Council 39 – 379 5/17/2022
Westview House Project Summary 04/28/22
Project Data Operating Economic Assumptions
Project: Westview House Vacancy Rate Non-PSH Units 5.00% Vacancy Rate PSH Units 5.00%
Total Units 85 Income Inflator 2.00%
Expense Inflator 3.00%
Land Area 2.12 RE Tax Inflator 2.00%
Units Per Acre 40.09
QCT/DDA YES Construction Loans
Construction Period 30
4% or 9% Financing 4.00% Loan Amount 40,200,000
Federal Tax Credit Price 0.925 Loan Fees 0.60%
Tax-Exempt Loan $23,990,343 1.95%
Taxable Loan $16,209,657 2.25%
Blended Loan Rate 2.60%
Permanent Loans Fee Interest Amortizaton Amount
Permanent Loans 4.05% 480 13,642,615
Soft Debt Loans Interest

3.00%

PROJECT UNIT MIX

AMI BEDROOMS SF UNITS MGR PERCENT GROSS UTILITY NET TCAC PBV ANNUAL

TCAC RENT ALLOWANCE RENT CONTRACT RENTS RENTAL INCOME
30% 1 489-523 23 0 27% 762 0 762 1,867 515,292.00
30% 2 756 3 1 4% 915 0 915 2,278 82,008.00
30% 3 933-1,101 21 0 25% 1,057 76 981 0 247,212.00
60% 3 933-1,101 13 0 15% 2,114 76 2,038 0 317,928.00
30% 4 1,178 16 0 19% 1,179 95 1,084 0 208,128.00
60% 4 1,178 8 0 10% 2,358 95 2,263 0 217,248.00
TOTAL 84 1 100% 1,587,816

CONSTRUCTION SOURCES TOTAL CONSTRUCTION USES OF FUNDS TOTAL Construction Loan $39,251,491 Land / Acquisition Costs $6,675,000 Net Investor Equity $4,705,272 Total Hard Costs $30,689,128 OCHFT $1,450,349 Hard Cost Contingency $1,535,000
City of Santa Ana $3,904,341 Construction Interest $1,633,319 CDP OZ LLC $350,000 Loan Fees $377,626
DDF $103,967 Soft Costs $5,739,022
Operating Reserves $343,824
Soft Costs Contingency $272,500
TOTAL SOURCES $49,765,420 Developer Fee $2,500,000
TOTAL DEVELOPMENT COSTS $49,765,420

PERMANENT SOURCES TOTAL PERMANENT USES OF FUNDS TOTAL
Net Investor Equity (Federal) $18,821,088 Land / Acquisition Costs $6,675,000 Permanent Loan $13,642,615 Total Hard Costs $30,689,128 CDP OZ LLC $350,000 Hard Cost Contingency $1,535,000
OCHFT $1,450,349 Construction Interest $1,633,319
City of Santa Ana $3,904,341 Loan Fees $377,626
NPLH $7,312,537 Soft Costs $5,739,022
County of Orange MHSA $4,258,280 Operating Reserves $343,824 Deferred Developer Fee $26,210 Soft Costs Contingency $272,500 TOTAL SOURCES $49,765,420 Developer Fee $2,500,000
TOTAL DEVELOPMENT COSTS $49,765,420
AMI NO. UNITS

30.00% 63

35.00% 0 Threshold Basis 129,507,377

40.00% 0 Eligible Basis 39,860,120

45.00% 0

50.00% 0 Reduction 0

55.00% 0

60.00% 21
Total Affordable 84
Manager Unit 1 Total Adjusted Eligible Basis 51,818,156 TOTAL UNITS 85 DDA/QCT Boost 130%
Total Qualified Basis 51,818,156
Credit Rate 4.00%
Stabilized Cash Flow Total Available Annual Credits 2,072,726 INCOME TOTAL PER UNIT Total Requested Federal Credits 2,072,726 Gross Potential Rental Income 1,587,816 18,680 Credit Price 0 Laundry Income 12,240 144 Net Investor Equity 18,821,088 Gross Commercial Income 0 0
Vacancy and Collection (80,003) (941) Total Requested State Credits 0 EFFECTIVE GROSS INCOME 1,520,053 17,883 Credit Price $0.00 Net Investor Equity 0

EXPENSES TOTAL PER UNIT
Operating Expenses 643,485 7,570 TOTAL NET INVESTOR EQUITY $18,821,088.00 Other ( ) 0 0 `
Social Services 42,500 500
Reserves 0 0
TOTAL EXPENSES 685,985 8,070
NET OPERATING INCOME 834,068 9,813
TOTAL DEBT SERVICE 689,313
NET CASH FLOW 144,756

MONTHLY

BASIS CALCULATIONS
EXHIBIT 5
City Council 39 – 380 5/17/2022
Westview House
Sources & Uses City of Santa Ana
Pre-Dev Proforma
04/28/22

BEGINNING BALANCE ENDING BALANCE

PERMANENT SOURCES PERCENT TOTAL PER UNIT TOTAL PER UNIT Net Investor Equity 38% 18,821,088 221,425 0 0
Permanent Loan 27% 13,642,615 160,501 0 0
CDP OZ LLC 1% 350,000 4,118 0 0
OCHFT 3% 1,450,349 17,063 1,450,349 17,063
City of Santa Ana 8% 3,904,341 45,933 4,547,495 53,500
NPLH 15% 7,312,537 86,030 7,312,537 86,030
County of Orange MHSA 9% 4,258,280 50,097 4,258,280 50,097 Deferred Developer Fee 0% 26,210 308 0 0
TOTAL SOURCES 100% 49,765,420 585,476 17,568,661 206,690

NEW OR ELIGIBLE ELIGIBLE NOT TOTAL

USES OF FUNDS TOTAL ACQUISITION REHAB COST HISTORIC STATE ELIGIBLE PER UNIT Land at $3,148,585 Per Acre or $72.28 Per SF 6,675,000 0 0 0 0 6,675,000 78,529 Associated Acq. Costs 726,288 0000 726,288 8,545
Prevailing Wage 0 0000 00
Hard Cost Residential 30,689,128 361,049 22,879,658 0 22,879,658 0 22,879,658 0 269,172 Site Improvements 3,558,174 0 3,558,174 0 3,558,174 0 41,861 General Conditions, Overhead, GC Fee 14.00% 3,701,296 0 3,701,296 0 3,701,296 0 43,545 GC Bond / Insurance / Letter of Credit 2.40% 550,000 0 550,000 0 550,000 0 6,471 Hard Cost Contingency 5.00% 1,535,000 0 1,535,000 0 1,535,000 0 18,059 Construction Interest (2.6%) at Perm. Rate + -14 2.60% 1,633,319 0 955,844 0 955,844 677,475 19,216 Bridge Interest at 10.00% 0 0 0 00 0 0
Construction Loan Fees 241,200 0 12,060 0 12,060 229,140 2,838 Conversion Fee 136,426 0000 136,426 1,605
Bridge Loan Fees 0 0 0 00 00
4% Related Costs / Cost of Issuance 40,000 0 2,000 0 2,000 38,000 471 Accounting & Audit 37,500 0 0 0 037,500 441
Appraisal / Market Study 11,350 0 11,350 0 11,350 0 134 Architecture (Architect, Landscape Architect) 1,052,500 0 1,052,500 0 1,052,500 0 12,382 Civil Engineering 113,300 0 113,300 0 113,300 0 1,333
Construction Site Inspector 138,500 0 138,500 0 138,500 0 1,629 Consultants (Geo, LEED, Dry Utilities, Security, Bank Insp.) 154,380 0 130,440 0 130,440 23,940 1,816 Environmental (EIR, Phase I, Asbestos, exc.) 5,100 0 5,100 0 5,100 0 60 F.A. / Syndication Consultant / Syndication Fee 0 0000 00 Furnishings 226,000 0 226,000 0 226,000 0 2,659
Special Inspections (Concrete, SWPPs) 75,000 0 75,000 0 75,000 0 882 Lease-up & Marketing Expenses 60,000 0 0 0 060,000 706
Legal 275,000 0 13,750 0 13,750 261,250 3,235
Utility Undergrounding 100,000 0 100,000 0 100,000 0 1,176 Operating & Debt Service Reserve (3-mo's / deb 3 343,824 0000 343,824 4,045 Other (Lease Up Reserve) 229,216 0000 229,216 2,697
Other (Admin, Repo, Shipping, Reimburseables) 22,000 0 0 0 0 22,000 259 Impact Fees 1,445,871 0 1,445,871 0 1,445,871 0 17,010
Insurance 80,000 0 54,026 0 54,026 25,974 941
Permit Fees 325,000 0 325,000 0 325,000 0 3,824
Property Taxes 110,138 0000 110,138 1,296
Solar (Structure & Panels) 0 0000 00
City Controlled Contingency 400,000 0 200,000 0 200,000 200,000 4,706 Soft Cost Contingency 4.98% 272,500 0 272,500 0 272,500 0 3,206 Tax Credit/Bond Fees (App., Mon., & Res.) 56,879 0 0 0 0 56,879 669 Title & Recording 55,000 0 2,750 0 2,750 52,250 647
Developer Overhead 0 0000 00
Developer Fee 2,500,000 0 2,500,000 0 0 0 29,412
TOTAL USES 49,765,420 0 39,860,120 0 37,360,120 9,905,300 585,476 EXHIBIT 5
City Council 39 – 381 5/17/2022
Westview House
Operating Budget - Detailed
PER

ADMINISTRATION TOTAL UNIT
Advertising 4,000 47
Legal 8,000 94
Accounting/Audit 8,000 94
Security 26,400 311
Other Phone / Office Supplies / License / Misc 19,000 224 TOTAL ADMINISTRATION 65,400 769

MANAGEMENT FEE
61,872 728
TOTAL MANAGEMENT FEE 61,872 728

UTILITIES
Fuel 0 0
Gas 12,000 141
Electricity 28,000 329
Water / Sewer 31,000 365
Other Cable / Misc 0 0
TOTAL UTILITIES 71,000 835

PAYROLL / PAYROLL TAXES
On-site Manager 52,000 612
Maintenance Personnel 80,200 944
Other Payroll Taxes / Insurance / Workers Comp. 46,714 550 Total Payroll / Payroll Taxes 178,914 2,105
Total Insurance 0 0
TOTAL PAYROLL / PAYROLL TAXES 178,914 2,105

REPAIRS & MAINTENANCE
Painting 6,000 71
Repairs 20,000 235
Trash Removal 20,000 235
Exterminating 5,000 59
Grounds 12,000 141
Elevator 5,000 59
Other Heating & Cooling R&M 10,000 118
TOTAL REPAIRS & MAINTENANCE 78,000 918

OTHER EXPENSES
Insurance - Property 45,000 529
Real Estate Taxes 22,500 265
Community Facilities District (CFD) 0 0
Contract Services 0 0
Manager Rent 0 0
Agency Debt Service 0 0
Operating Reserve 0 0
NPLH, MHSA, & OCHFT Monitoring Fees 38,229 450
Social Services 82,570 971
OTHER EXPENSES 188,299 2,215

TOTAL EXPENSES
Total Annual Residential Operating Expenses 643,485 7,570 Total Number of Units in the Project 85
Total Annual Operating Expenses Per Unit 7,570
Total 3-Month Operating Reserve 343,824
Total Annual Internet Expense (Site Amenity Election) 0 0 Total Annual Services Amenities Budget (From Project Expenses) 0 0 Total Annual Reserve for Replacement 42,500 500
Total Annual Real Estate Taxes 0 0
TOTAL RES. OP. EXP. (W / SERVICES, RR, RE TAXES) 685,985 8,070 EXHIBIT 5
City Council 39 – 382 5/17/2022
Westview House
Flow of Funds

COMPLETION COMPLETION LEASE UP CONVERSION

PAYMENT COMPLETION
CONST.

TOTAL CLOSING 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 SOURCES OF FUNDS % BUDGET Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Net Investor Equity 37.8% 18,821,088 1,882,109 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,823,163 00 0 0 0 0 13,598,236 Permanent Loan 27.4% 13,642,615 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 13,642,615 Overhand Tranche 0.0% 0 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Accrual Mortgage0.0% 0 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 CDP OZ LLC 0.7% 350,000 350,000 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 OCHFT 2.9% 1,450,349 0 0 1,450,349 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 City of Santa Ana 7.8% 3,904,341 3,513,907 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 390,434 0 000 0 0 0 0 0 NPLH 14.7% 7,312,537 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 7,312,537 County of Orange MHSA 8.6% 4,258,280 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 4,258,280 Deferred Developer Fee 0.1% 26,210 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 26,210 General Partner Equity 0.0% 0 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Gas Co - Solar Thermal Subsidy 0.0% 0 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 SOMAH rebate 0.0% 0 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Interest on Surplus Funds 0.0% 0 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 NOI During Construction 0.0% 0 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 TOTAL SOURCES 49,765,420 5,746,016 0 1,450,349 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 390,434 0 2,823,163 0 0 0 0 0 0 38,837,878 USES OF FUNDS % 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 2.00% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 4.55% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Land at $3,148,585 Per Acre or $72.28 Per SF 6,675,000 $6,675,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Associated Acq. Costs 726,288 $726,288.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Prevailing Wage 0 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Hard Cost Residential Total: $30,689,128; $361,049 Per Unit 22,879,658 $0.00 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 1,089,508 0 0 0 0 0 0 0 0 Site Improvements 3,558,174 $0.00 1,186,058 1,186,058 1,186,058 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 General Conditions, Overhead, GC Fee 14.00% 3,701,296 $0.00 318,579 318,579 318,579 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 152,531 153,465 0 0 0 0 0 0 0 0 GC Bond / Insurance / Letter of Credit 550,000 $550,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Hard Cost Contingency 5.00% 1,535,000 $0.00 0 0 0 0 0 0 0 0 0 219,286 219,286 219,286 219,286 219,286 219,286 219,286 0 0 0 0 0 000 0 0 0 0 0 Construction Interest (2.6%) at Perm. Rate + -145b 2.60% 1,633,319 $0.00 13,822 19,663 22,407 28,142 30,987 33,845 36,742 39,612 42,522 45,405 48,802 52,282 55,661 59,048 62,442 65,843 69,749 72,791 76,216 79,865 82,161 85,045 85,045 85,045 85,045 85,045 85,045 85,045 0 Bridge Interest at 10.00% 0 $0.000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Construction Loan Fees 241,200 $241,200.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Conversion Fee 136,426 $0.000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 136,426 Bridge Loan Fees 0 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 4% Related Costs / Cost of Issuance 40,000 $40,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Accounting & Audit 37,500 $30,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 7,500 Appraisal / Market Study 11,350 $11,350.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Architecture (Architect, Landscape Architect) 1,052,500 $720,100.00 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 16,620 0 000 0 0 0 0 0 Civil Engineering 113,300 $90,800.00 10,000 10,000 2,500 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Construction Site Inspector 138,500 $12,500.00 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 0 0 0 0 0 0 0 0 Consultants (Geo, LEED, Dry Utilities, Security, Bank Insp.) 154,380 $60,000.00 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 4,719 0 000 0 0 0 0 0 Environmental (EIR, Phase I, Asbestos, exc.) 5,100 $5,100.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 F.A. / Syndication Consultant / Syndication Fee 0 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Furnishings 226,000 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 26,000 100,000 100,000 0 0 000 0 0 0 0 0 Special Inspections (Concrete, SWPPs) 75,000 $0.00 0 15,000 0 15,000 0 15,000 0 15,000 0 15,000 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Lease-up & Marketing Expenses 60,000 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20,000 20,000 20,000 0 0 000 0 0 0 0 0 Legal 275,000 $205,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 70,000 Utility Undergrounding 100,000 $0.00 50,000 50,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Operating & Debt Service Reserve (3-mo's / debt) 343,824 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 343,824 Other (Lease Up Reserve) 229,216 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 229,216 0 0 0 0 0 000 0 0 0 0 0 Other (Admin, Repo, Shipping, Reimburseables) 22,000 $10,000.00 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 600 0 000 0 0 0 0 0 Impact Fees 1,445,871 $1,445,871.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Insurance 80,000 $80,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Permit Fees 325,000 $325,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Property Taxes 110,138 $60,138.00 0 0 0 0 0 0 0 0 0 0 50,000 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Solar (Structure & Panels) 0 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 City Controlled Contingency 400,000 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100,000 200,000 100,000 0 000 0 0 0 0 0 Soft Cost Contingency 272,500 $0.00 0 0 0 0 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 18,167 0 0 000 0 0 0 0 0 Tax Credit/Bond Fees (App., Mon., & Res.) 56,879 $56,879.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Title & Recording 55,000 $30,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 25,000 Developer Overhead 0 $0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 0 0 0 0 Developer Fee 2,500,000 $750,000.00 0 0 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 500,000 00 0 0 0 0 706,210 TOTAL USES 49,765,420 12,125,226 2,695,905 2,716,746 2,646,990 1,313,119 1,319,131 1,336,989 1,324,886 1,342,757 1,330,666 1,567,835 1,606,232 1,559,712 1,563,091 1,566,478 1,569,872 1,802,489 1,403,893 1,580,935 1,684,360 1,449,843 1,331,133 585,045 85,045 85,045 85,045 85,045 85,045 85,045 1,288,960

DEVELOPMENT FUNDS BALANCE
Opening Balance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 02,238,118 2,153,073 2,068,029 1,982,984 1,897,939 1,812,894 1,727,849 Advances (12,125,226) (2,695,905) (2,716,746) (2,646,990) (1,313,119) (1,319,131) (1,336,989) (1,324,886) (1,342,757) (1,330,666) (1,567,835) (1,606,232) (1,559,712) (1,563,091) (1,566,478) (1,569,872) (1,802,489) (1,403,893) (1,580,935) (1,684,360) (1,449,843) (1,331,133) (585,045) (85,045) (85,045) (85,045) (85,045) (85,045) (85,045) (1,288,960) Other Inflow 5,746,016 0 1,450,349 0 0000 0 0 0 0 0 0 0 0 0 0 0 0 390,434 0 2,823,163 0 0 0 0 0 0 38,837,878 Construction Loan Advances 6,379,210 2,695,905 1,266,397 2,646,990 1,313,119 1,319,131 1,336,989 1,324,886 1,342,757 1,330,666 1,567,835 1,606,232 1,559,712 1,563,091 1,566,478 1,569,872 1,802,489 1,403,893 1,580,935 1,684,360 1,059,409 1,331,133 0 0 0 0 0 0 0 0 Bridge Loan Advances 00 000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ENDING BALANCE 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,238,118 2,153,073 2,068,029 1,982,984 1,897,939 1,812,894 1,727,849 39,276,767 CONSTRUCTION LOAN BALANCE 40,200,000 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Forced Draw Schedule
Beg Loan Balance 0 6,379,210 9,075,116 10,341,513 12,988,503 14,301,623 15,620,754 16,957,743 18,282,629 19,625,386 20,956,052 22,523,886 24,130,118 25,689,830 27,252,921 28,819,399 30,389,271 32,191,760 33,595,654 35,176,588 36,860,949 37,920,357 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 Advances 6,379,210 2,695,905 1,266,397 2,646,990 1,313,119 1,319,131 1,336,989 1,324,886 1,342,757 1,330,666 1,567,835 1,606,232 1,559,712 1,563,091 1,566,478 1,569,872 1,802,489 1,403,893 1,580,935 1,684,360 1,059,409 1,331,133 0 0 0 0 0 0 0 0 Paydowns 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 39,251,491 END LOAN BALANCE 39,251,491 6,379,210 9,075,116 10,341,513 12,988,503 14,301,623 15,620,754 16,957,743 18,282,629 19,625,386 20,956,052 22,523,886 24,130,118 25,689,830 27,252,921 28,819,399 30,389,271 32,191,760 33,595,654 35,176,588 36,860,949 37,920,357 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 39,251,491 0 EXHIBIT 5
City Council 39 – 383 5/17/2022
Westview House
Cash Flow Statement - DetailedINFLATOR: 2% / 3%
STABILIZED YEAR Lease Up 5mo.

PER UNIT TOTAL Stabilized 6mo. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 INCOME 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038Gross Potential Rental Income (Non-PSH) 6,993 856,380 0 785,015 872,080 889,522 907,312 925,459 943,968 962,847 982,104 1,001,746 1,021,781 1,042,217 1,063,061 1,084,322 1,106,009 1,128,129Gross Potential Rental Income (PSH) 1,358 377,388 345,939 384,307 391,993 399,833 407,829 415,986 424,306 432,792 441,448 450,276 459,282 468,468 477,837 487,394 497,142Other Income (Residential) 144 12,240 0 11,220 12,464 12,714 12,968 13,227 13,492 13,762 14,037 14,318 14,604 14,896 15,194 15,498 15,808 16,124 GROSS POTENTIAL INCOME (RES.) 14,659 1,246,008 0 1,142,174 1,268,851 1,294,229 1,320,113 1,346,515 1,373,446 1,400,915 1,428,933 1,457,512 1,486,662 1,516,395 1,546,723 1,577,657 1,609,210 1,641,395 Vacancy (Residential - Non PSH) (350) (42,819) 0 (39,251) (43,604) (44,476) (45,366) (46,273) (47,198) (48,142) (49,105) (50,087) (51,089) (52,111) (53,153) (54,216) (55,300) (56,406)Vacancy (Residential - PSH) (68) (18,869) (17,297) (19,215) (19,600) (19,992) (20,391) (20,799) (21,215)Vacancy (Other Income) (7) (612) 0 (561) (623) (636) (648) (661) (675) (688) (702) (716) (730) (745) (760) (775) (790) (806) Gross Commercial Income 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Vacancy (Commercial) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Subsidy Income 4,165 354,048 0 324,544 359,359 364,749 370,220 375,774 381,410 387,131 392,938 398,832 404,815 410,887 417,050 423,306 429,656 436,101Vacancy (Subsidy) (208) (17,702) 0 (16,227) (17,968) (18,237) (18,511) (18,789) (19,071) (19,357) (19,647) (19,942) (20,241) (20,544) (20,853) (21,165) (21,483) (21,805)Operating Reserve Draws 0 0 0 000000000000000 EFFECTIVE GROSS INCOME 17,883 1,520,053 0 1,393,382 1,546,800 1,576,029 1,605,817 1,636,175 1,667,113 1,698,644 1,752,417 1,785,599 1,819,417 1,853,882 1,889,008 1,924,807 1,961,293 1,998,478

45.13%
EXPENSESManagement Fee 4.00% 728 61,872 0 56,716 63,573 65,481 67,445 69,468 71,552 73,699 75,910 78,187 80,533 82,949 85,437 88,001 90,641 93,360Social Services 971 82,570 0 75,689 84,841 87,386 90,007 92,708 95,489 98,354 101,304 104,343 107,474 110,698 114,019 117,439 120,963 124,591NPLH, MHSA, & OCHFT Monitoring Fees 450 38,229 0 35,043 39,280 40,459 41,672 42,923 44,210 45,537 46,903 48,310 49,759 51,252 52,789 54,373 56,004 57,684EXPENSES 5,421 460,814 0 422,413 473,486 487,691 502,322 517,391 532,913 548,900 565,368 582,329 599,798 617,792 636,326 655,416 675,078 695,331Replacement Reserve 500 42,500 0 38,958 42,500 43,775 45,088 46,441 47,834 49,269 50,747 52,270 53,838 55,453 57,116 58,830 60,595 62,413 TOTAL EXPENSES 8,070 685,985 0 628,820 703,681 724,791 746,535 768,931 791,999 815,759 840,232 865,439 891,402 918,144 945,688 974,059 1,003,281 1,033,379 NET OPERATING INCOME 9,813 834,068 0 764,563 843,119 851,237 859,282 867,243 875,114 882,885 912,186 920,160 928,015 935,738 943,320 950,748 958,012 965,099DEBT SERVICE (HARD)Permanent Loan 0 764,563 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313Overhand Tranche 0 000000000000000 0 0 000000000000000
Accrual Mortgage 0 000000000000000
0 000000000000000
TOTAL DEBT SERVICE Stabilized DSC 1.22 0 764,563 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 689,313 Required DSC 1.15
NET CASH FLOW 0 0 153,806 161,925 169,969 177,931 185,802 193,572 222,873 230,848 238,702 246,426 254,007 261,436 268,700 275,786 HARD DEBT RATIOSDebt Service Coverage Ratio (Hard) N/A 1.00 1.22 1.23 1.25 1.26 1.27 1.28 1.32 1.33 1.35 1.36 1.37 1.38 1.39 1.40 EXHIBIT 5
 City Council 39 – 3845/17/2022  Exhibit D:

City/Rental
Rehabilitation
Program Loan Deed
of Trust
EXHIBIT 5
City Council 39 – 385 5/17/2022
1 Westview House
City Rental Rehabilitation Program Deed of Trust

FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail to:

City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
_________________________________________________________________

CITY RENTAL REHABILITATION PROGRAM DEED OF TRUST

AND ASSIGNMENT OF RENTS
(2530 & 2534 Westminster Avenue, Santa Ana, California) THIS DEED OF TRUST AND ASSIGNMENT OF RENTS (“Deed of Trust”) is made as of this 26th day of May, 2022, by Westview House LP, a California limited partnership, (“Trustor”), to Fidelity National Title, as trustee (“Trustee”), for the benefit of the City of Santa Ana, a charter city and municipal corporation , as beneficiary (“Beneficiary”).

FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor’s fee interest in the property located in the City of Santa Ana, State of California, that is described in Exhibit A, attached hereto and incorporated herein by this reference (the “Property”), on which Trustor intended to construct and operate an apartment complex commonly known as Westview House.

TOGETHER WITH all interest, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights-of-way and rights used in connection therewith or as a means of access thereto, including without limiting the generality of the foregoing, all tenements, hereditament and appurtenances thereof and thereto; TOGETHER WITH any and all buildings, improvements and landscaping of every kind and description now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property (sometimes collectively referred to as the “Improvements”);
EXHIBIT 5
City Council 39 – 386 5/17/2022
2 Westview House
City Rental Rehabilitation Program Deed of Trust
TOGETHER WITH all building materials and equipment now or hereafter delivered to said Property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys, strips and gores of land adjacent to or used in connection with the Property and/or Improvements; TOGETHER WITH all estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all oil, gas and mineral rights (including royalty and leasehold rights relating thereto), all water and water rights and shares of stock relating thereto, all leases of all or any portion of the Property or Improvements entered into by Trustor as lessor or lessee, all options to purchase or lease all or any portion of the Property and/or Improvements, all deposits made with or other security given by Trustor to third parties including, utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by and proceeding or purchase in lieu thereof of the whole or any part of such property; and TOGETHER WITH all articles of personal property or fixtures now or hereafter attached to, located on, installed in or used in and about the Property and/or Improvements, including without limitation, all partitions, generators, screens, boilers, furnaces, pipes, plumbing, elevators, cleaning and sprinkler systems, fire extinguishing machinery and equipment, water tanks, heating, ventilating, air conditioning and air cooling machinery and, equipment, gas and electric machinery and equipment and other appliances, machinery and equipment and other fixtures of every nature, all of which shall remain real property, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the Property in any manner.

TOGETHER WITH all present and future accounts, general intangibles, chattel paper, deposit accounts, investment property, instruments and documents as those terms are defined in the California Commercial Code, now or hereafter relating or arising with respect to the Property and/or Improvements and/or the use thereof or any improvements thereto, including without limitation: (i) all rights to the payment of money, including escrow proceeds arising out of the sale or other disposition of all or any portion of the Property and/or Improvements; (ii) all deposit accounts and other accounts and funds created under or pursuant to the Loan Agreement (as defined below), and the other Loan Documents, all amounts now or hereafter on deposit herein, and all interest and other earnings thereon with the exception of the operating reserve created pursuant to Borrower’s Partnership Agreement (as defined in the Loan Agreement); (iii) all use permits, occupancy permits, construction and building permits, and all other permits and approvals required by any governmental or quasi-governmental authority in connection with the development, construction, use, occupancy or operation of the Property and/or Improvements; (iv) any and all agreements relating to the occupancy and/or operation of the Property and/or Improvements, including without limitation service, property management, landscaping, gardening, consulting and other contracts of every nature (to the extent the same are assignable); (v) all lease or rental agreements; (vi) all names under which the Property and/or Improvements EXHIBIT 5
City Council 39 – 387 5/17/2022
3 Westview House
City Rental Rehabilitation Program Deed of Trust
are now or hereafter known and all rights to carry on business under any such names or any variant thereof; (vii) all trademarks relating to the Property and/or Improvements and/or the use, occupancy or operation thereof; (viii) all goodwill relating to the Property and/or Improvements and/or the use, occupancy or operation thereof; (ix) all insurance proceeds and condemnation awards arising out of or incidental to the ownership, use, occupancy or operation of the Property and/or Improvements; (x) all reserves, deferred payments, deposits, refunds, cost savings, bonds, insurance policies and payments of any kind relating to the Property and/or Improvements; (xi) all water stock, if any, relating to any Property and/or Improvements; (xii) all supplements, modifications and amendments to the foregoing and all present and future accessions, additions, attachments, replacements and substitutions of or to any or all of the foregoing; and (xiii) all cash and noncash proceeds and products of any or all of the foregoing, including without limitation all monies, deposit accounts, insurance proceeds and other tangible or intangible property received upon a sale or other disposition of any of the foregoing, whether voluntary or involuntary; and TOGETHER WITH all present and future goods, equipment and inventory, as those terms are defined in the California Commercial Code, and all other present and future personal property of any kind or nature whatsoever, now or hereafter located at, upon or about the Property and/or Improvements, or used or to be used in connection with or relating or arising with respect to the Property and/or Improvements, the use thereof or any improvements thereto.

All of the foregoing, together with the Property, is herein referred to as the “Security”.

To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever.

FOR THE PURPOSE OF SECURING:
(a) Payment of and performance of all indebtedness of Trustor to Beneficiary as set forth in the Loan Agreement (defined in Section 1.5 below) and the Note (defined in Section 1.6 below) in the original principal amount of $386,523 until paid or canceled. Said principal and other payments shall be due and payable as provided in the Loan Agreement and the Note. The Loan Agreement and the Note and all their terms are incorporated herein by reference, and this conveyance shall secure any and all extensions thereof, however evidenced; (b) Payment and performance of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust with interest thereon as provided herein;
(c) Payment and performance of every other obligation, covenant or agreement of Trustor contained in this Deed of Trust and in the other “Loan Documents” (as such term is defined in the Loan Agreement);
(d) Payment and performance of all renewals, extensions, supplements, amendments and other modifications of any of the foregoing, including without limitation modifications that are evidenced by new or additional documents or that change the rate of interest on any obligation.

All of the foregoing obligations are referred to collectively herein as the “Obligations”.

EXHIBIT 5
City Council 39 – 388 5/17/2022
4 Westview House
City Rental Rehabilitation Program Deed of Trust

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

Section 1. DEFINITIONS

1.1 Defined Terms. In addition to the terms defined elsewhere in this Deed of Trust, the following terms shall have the following meanings in this Deed of Trust:
“Debt Instrument” means any debt, loan, mortgage, deed of trust, regulatory agreement or security instrument relating to the Property or the Security, including, but not limited to, the Loan Documents.
“Hazardous Substance” means:
(a) any oil, flammable substance, explosive, radioactive material, hazardous waste or substance, toxic waste or substance or any other waste, material, or pollutant that (i) poses a hazard to the Property or to persons on the Property or (ii) causes the Property to be in violation of any Hazardous Substance Law;
(b) asbestos in any form;
(c) urea formaldehyde foam insulation;
(d) transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls;
(e) radon gas;
(f) any chemical, material, or substance defined as or included in the definition of “hazardous substance,” “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” or “toxic substances” or words of similar import under any applicable local, state, or federal law or under the regulations adopted or publications promulgated pursuant to those laws, including, but not limited to, any Hazardous Substance Law, Code of Civil Procedure § 564, as amended from time to time, Code of Civil Procedure § 726.5, as amended from time to time, Code of Civil Procedure §736, as amended from time to time, and Civil Code § 2929.5, as amended from time to time; (g) any other chemical, material, or substance, exposure to which is prohibited, limited, or regulated by any governmental authority with authority over the Property or which may pose a hazard to the health and safety of the occupants of the Property or the owners or occupants of property adjacent to or surrounding the Property, or any other person coming on the Property or any adjacent property; and
(h) any other chemical, material, or substance that may pose a hazard to the environment.

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“Hazardous Substance Claim” means any enforcement, cleanup, removal, remedial, or other governmental, regulatory, or private actions, agreements, or orders threatened, instituted, or completed pursuant to any Hazardous Substance Law together with all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost-recovery compensation, loss, or injury resulting from the presence, release or discharge of any Hazardous Substance.
“Hazardous Substance Law” means any federal, state, or local law, ordinance, regulation, or policy relating to the environment, health, and safety, any Hazardous Substance (including, without limitation, the use, handling, transportation, production, disposal, discharge, or storage of the substance), industrial hygiene, soil, groundwater, and indoor and ambient air conditions or the environmental conditions on the Property, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 [42 USCS §§ 9601 et seq.], as amended from time to time; the Hazardous Substances Transportation Act [49 USCS §§ 1801 et seq.], as amended from time to time; the Resource Conservation and Recovery Act [42 USCS §§ 6901 et seq.], as amended from time to time; the Federal Water Pollution Control Act [33 USCS §§ 1251 et seq.], as amended from time to time; the Hazardous Substance Account Act [Health and Safety Code §§ 25300 et seq.], as amended from time to time; the Hazardous Waste Control Law [Health and Safety Code §§ 25100 et seq.], as amended from time to time; the Medical Waste Management Act [Health and Safety Code §§ 25015 et seq.], as amended from time to time; and the Porter-Cologne Water Quality Control Act [Water Code §§ 13000 et seq.], as amended from time to time.
“Loan Agreement” means that certain Loan Agreement, which terms and provision are incorporated into this Deed of Trust by reference, of even date herewith between Trustor and Beneficiary.
“Note” means that certain promissory note of even date herewith executed by the Trustor, the payment of which is secured by this deed of Trust.
“Principal” means the aggregate of all principal and interest due under the Note. “Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment, including continuing migration, of Hazardous Substances that goes into the soil, surface water, or groundwater of the Property, whether or not caused by, contributed to, permitted by, acquiesced to, or known to Trustor.

Section 2. GENERAL COVENANTS OF TRUSTOR REGARDING THE

PROPERTY, IMPROVEMENTS AND SECURITY

2.1. Payment of Secured Obligations.

Trustor shall duly and punctually pay and perform all Obligations, including but not limited to all terms, covenants, conditions and agreements set forth in the Debt Instruments, the Loan Agreement, the Note and any other agreement of any nature whatsoever now or hereafter involving or affecting the Security or any part thereof.

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2.2. Maintenance, Repair and Modification.
(a) The Trustor agrees that at all times prior to full payment of the sum owed under the Note, the Trustor will, at the Trustor’s own expense, maintain, preserve and keep the Security or cause the Security to be maintained and preserved in good condition and repair and in a prudent and businesslike manner. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals to the Security, which are necessary or appropriate. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Security.
(b) Trustor shall not remove, demolish or substantially alter any of the Improvements, other than to make repairs in the ordinary course of business of a non-structural nature which serve to preserve or increase the value of the Security without Beneficiary’s prior written consent, which consent shall not be unreasonably withheld so long as Trustor provides reasonable evidence to Beneficiary that, following such demolition and restoration and/or alteration, the Improvements shall have a fair market value at least equal to their fair market value prior to such demolition and restoration and/or alteration; Trustor shall complete promptly and in a good and workmanlike manner any Improvement which may now or hereafter be constructed and promptly restore in like manner any Improvement which may be damaged or destroyed thereon from any cause whatsoever, and pay when due all claims for labor performed and materials furnished therefor; Trustor shall comply with all laws, ordinances, rules, regulations, covenants, conditions, restrictions and orders of any governmental authority now or hereafter affecting the conduct or operation of Trustor’s business or the security or any part thereof or requiring any alteration or improvement to be made thereon; Trustor shall not commit, suffer or permit any act to be done in, upon or to the Security or any part thereof in violation of any such laws, ordinances, rules, regulations or orders, or any covenant, condition or restriction now or hereafter affecting the Security; Trustor shall not commit or permit any waste or deterioration of the Security, and shall keep and maintain abutting grounds, sidewalks, roads, parking and landscape areas in good and neat order and repair; Trustor will not take (or fail to take) any action, which if taken (or not so taken) would increase in any way the risk of fire or other hazard occurring to or affecting the Security or otherwise would impair the security of Beneficiary in the Security; Trustor shall comply with the provisions of all leases, if any, constituting a portion of the Security; Trustor shall not abandon the Security or any portion thereof or leave the Security unprotected, unguarded, vacant or deserted; Trustor shall not initiate, join in or consent to any change in any zoning ordinance, general plan, specific plan, private restrictive covenant or other public or private restriction limiting the uses which may be made of the Security by Trustor or by the owner thereof; Trustor shall secure and maintain in full force all permits necessary for the use, occupancy and operation of the Security; except as otherwise prohibited or restricted by the Loan Agreement and the other instruments and documents executed in connection with the transaction to which the Loan Agreement pertains or any of them, Trustor shall do any and all other acts which may be reasonably necessary to protect or preserve the value of the Security and the rights of Trustee and Beneficiary with respect thereto.

2.3. Granting of Easements.

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Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in the nature of easements with respect to any property or rights included in the Security except those required or desirable for installation and maintenance of public utilities including, without limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law.

2.4. Agreement to Pay Attorneys’ Fees and Expenses.

In the event of any Event of Default (as defined below) hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so paid by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the indebtedness secured by the lien of this Deed of Trust, and shall bear interest from the date such expenses are paid at the Agreed Rate (as defined in Section 3.1(d) below).

2.5. Payment of the Principal.

The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth in the Note in the amounts and by the times set out therein.

2.6. Fixture Filing and Security Agreement.
(a) To the maximum extent permitted by law, the personal property subject to this Deed of Trust shall be deemed to be fixtures and part of the real property and this Deed of Trust shall constitute a fixture filing under the California Commercial Code. As to any personal property not deemed or permitted to be fixtures, this Deed of Trust shall constitute a security agreement under the California Commercial Code and Trustor hereby grants to Beneficiary a security interest in all of Trustor’s right, title and interest, whether now existing or hereafter arising, in and to any portion of the Property which constitutes personal property (the “Personal Property”).
(b) Trustor hereby represents and warrants to Beneficiary that: (1) Trustor is the owner of the Personal Property and no other person has any right, title, claim or interest (by way of security interest or other lien or charge or otherwise) in, against or to the Personal Property other than any senior lender or lien holder approved in writing by Beneficiary; (2) the Personal Property is free from all liens, security interests, encumbrances and adverse interests, except Permitted Encumbrances (hereinafter defined); (3) no financing statement or similar filing covering any of the Personal Property, and naming any secured party other than Beneficiary and the holders of Permitted Encumbrances, is on file in any public office; (4) each account, general intangible, chattel paper, deposit account, instrument, document, agreement, contract or right to the payment of money constituting Personal Property (collectively, the "Rights to Payment"), if any, is genuine and enforceable in accordance with its terms against the party obligated to pay the same and (5) the Personal Property is not used nor was the Personal Property purchased for personal or family use by Trustor.

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(c) Trustor hereby agrees: (1) to pay, prior to delinquency, all taxes, assessments, charges, encumbrances and liens now or hereafter imposed upon or affecting all or any part of the Personal Property; (2) not to amend, modify, supplement, terminate or cancel any of the Personal Property; (3) without the prior written consent of Beneficiary, not to remove all or any part of the tangible Personal Property from the Property; (4) to give Beneficiary thirty (30) days' prior written notice of any change in Trustor's residence, principal place of business, chief executive office or trade names or styles; (5) to appear in and defend any action or proceeding which may affect the Personal Property (including, without limitation, actions, proceedings and claims which may affect Trustor's title to the Personal Property or the validity or priority of Beneficiary's security interest in the Personal Property); (6) to indemnify Beneficiary against all claims, demands and liabilities of every kind caused by the Personal Property; and (7) upon not less than 72 hours’ prior written notice and during regular business hours, to permit Beneficiary to enter Trustor's premises to inspect the Personal Property; provided, that Trustor shall have the right to require that a representative of Trustor be present during any such entry made while any construction and/or rehabilitation work is occurring. Trustor further agrees (8) to fully and timely perform all of its obligations under and with respect to all Rights of Payment and to diligently enforce all of the obligations of each obligor thereunder; (9) not to amend, modify, supplement, cancel or terminate any of the Rights to Payment in any material respect without the prior written consent of Beneficiary; (10) to keep the Rights to Payment and all proceeds free and clear of all defaults, defenses, rights of offset and counterclaim; (11) to take or bring, in Beneficiary's name or in the name of Trustor, as Beneficiary may require, all actions, suits or proceedings reasonably deemed necessary by Beneficiary to effect collection or to realize upon Rights to Payment; and (12) not to commingle Rights to Payment or collections thereunder with other property. (d) As soon as practicable, and in any event within ten (10) days, Trustor shall notify Beneficiary of: (1) any attachment or other legal process levied against any of the Personal Property; (2) any information received by Trustor which may in any manner materially and adversely affect the value of the Personal Property or the rights and remedies of Beneficiary with respect thereto; and (3) the removal of any of the Personal Property to a new location other than in the ordinary course of business and the removal of any records of Trustor relating to the Personal Property to any location other than the Land and Improvements. (e) Trustor hereby irrevocably constitutes and appoints Beneficiary as its attorney-infact to, after the occurrence and during the occurrence of an Event of Default: (1) perform any obligation of Trustor hereunder in Trustor's name or otherwise; (2) give notice of Beneficiary's rights in the Rights to Payment, to enforce the same, and make extension agreements with respect thereto; (3) release persons liable on the Rights to Payment and to give receipts and acquittances and compromise disputes in connection therewith; (4) release security for the Rights to Payment; (5) resort to security for the Rights to Payment in any order; (5) prepare, execute, file, record or deliver notes, assignments, schedules, designation statements, financing statements, continuation statements, termination statements, and other documents to perfect preserve or release Beneficiary's interest in the Rights to Payment; and (6) do all acts and things and execute all documents in the name of Trustor or otherwise, deemed by Beneficiary as necessary, proper and convenient in connection with the preservation, perfection or enforcement of its rights hereunder. The power of attorney granted hereunder is coupled with an interest and is irrevocable.

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City Rental Rehabilitation Program Deed of Trust

2.7. Financing Statement.

The Trustor shall execute and deliver to the Beneficiary such financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees to perform all acts that the Beneficiary may reasonably request so as to enable the Beneficiary to maintain such valid perfected security interest in the Security in order to secure the payment of the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant to this instrument.

2.8. Operation of the Security.

The Trustor agrees and covenants to operate the Security in full compliance with the Loan Agreement and the Debt Instruments.

2.9. Inspection of the Security.

The Trustor covenants and agrees that at any and all reasonable times during regular business hours and upon not less than 72 hours’ prior written notice, the Beneficiary and its duly authorized agents, attorney’s experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect all or any portion of the Security, including, but not limited to, the right to inspect and copy all reports and records pertaining thereto provided, that Trustor shall have the right to require that a representative of Trustor be present during any entry onto the Property made while any construction and/or rehabilitation work is occurring.

2.10. Nondiscrimination.

The Trustor herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, age, marital status, national origin, ancestry or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the Trustor itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants shall run with the land.

2.11. Subrogation and Waiver of Offset.
(a) Trustor waives any and all right to claim or recover against Beneficiary, its officers, employees, agents and representatives, for loss of or damage to Trustor, the Security, Trustor’s property or the property of others under Trustor’s control from any cause insured against or required to be insured against by the provisions of this Deed of Trust; provided, however, that this waiver of subrogation shall not be effective with respect to any policy of insurance permitted or required by this Deed of Trust if (i) such policy prohibits, or if coverage thereunder would be reduced as a result of, such waiver of subrogation and (ii) Trustor is unable EXHIBIT 5
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to obtain from a carrier issuing such insurance a policy that, by special endorsement or otherwise, permits such a waiver of subrogation.
(b) Except as otherwise specifically provided herein, all amounts payable by Trustor pursuant to this Deed of Trust shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of Trustor hereunder shall in no way be released, discharged or otherwise affected (except as expressly provided herein) by reason of: (i) any damage to or destruction of or any condemnation or similar taking of the Security or any part thereof; (ii) any restriction or prevention of or interference by any third party with any use of the Security or any part thereof; (iii) any title defect or encumbrance or any eviction from the Security or any part thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary, or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary, or by any court, in any such proceeding; (v) any claim which Trustor has or might have against Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any of the terms hereof or of any other agreement with Trustor; or (vii) any other occurrence whatsoever, whether similar or dissimilar to the foregoing. Except as expressly provided herein, Trustor waives all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of any sum secured hereby and payable by Trustor.

2.12. Utilities.

Trustor shall pay or cause to be paid when due all utility charges which are incurred for the benefit of the Security or which may become a charge or lien against the Security for gas, electricity, water, sewer services or other fees and charges for utilities furnished to the Security and all other assessments or charges of a similar nature, whether public or private, affecting or related to the Security or any portion thereof, whether or not such taxes, assessments or charges are or may become liens thereon.

2.13. Actions by Beneficiary to Preserve Property.

If Trustor fails to make any payment or to do any act as and in the manner provided in this Deed of Trust, Beneficiary and Trustee, and each of them, each in its own discretion, without obligation to do so, without releasing Trustor from any Obligation, and subject only to the notice and cure provisions of the Loan Agreement, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. In connection therewith (without limiting their general and other powers, whether conferred herein, in another Loan Document or by law), Beneficiary and Trustee shall each and are hereby given the right, but not the obligation: (i) to enter upon and take possession of the Security; (ii) to make additions, alterations, repairs and improvements to the Security which either of them consider necessary or proper to keep the Security in good condition and repair; (iii) to appear and participate in any action or proceeding which may affect the security hereof or the rights or powers of Beneficiary or Trustee; (iv) to pay, purchase, contest or compromise any encumbrance, claim, charge, lien or debt which in the judgment of either may affect the security of this Deed of Trust or be prior or superior hereto; and (v) in exercising such powers to pay necessary expenses, including EXHIBIT 5
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employment of counsel or other necessary or desirable consultants. Trustor shall reimburse Beneficiary on demand for all costs incurred by Beneficiary in connection with actions which Beneficiary reasonably deems advisable to protect its interest under the Loan Agreement and all such amounts shall bear interest at the Agreed Rate following demand and be secured hereby.

2.14. Transfer of Property by Trustor.

Prior to repayment of the Note, Trustor agrees that Trustor shall not sell or transfer the Security or any interest therein or sell or transfer all or substantially all of the assets of Trustor or any of them except as may be provided in the Loan Agreement.

2.15. Additional Security.

No other security now existing, or hereafter taken, to secure the Obligations secured hereby or the liability of any maker, surety guarantor or endorser with respect to such Obligations, or any of them, shall be impaired or affected by the execution of this Deed of Trust; and all additional security shall be taken, considered and held as cumulative. The taking of additional security, execution of partial releases of the Security, or any extension of the time of payment of the indebtedness shall not diminish the force, effect or lien of this Deed of Trust and shall not affect or impair the liability of any maker, surety, guarantor or endorser for the payment of said indebtedness. In the event Beneficiary at any time holds additional security for any of the Obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same, at its option, either before, concurrently, or after a sale is made hereunder.

2.16. Liens.

Trustor shall not cause, incur suffer or permit to exist or become effective any lien, encumbrance or charge upon all or any part of the Property, the Improvements or any interest therein other than (a) easements, rights of way, covenants, conditions, restrictions, liens, and other title limitations approved in writing by Beneficiary prior to the execution of this Deed of Trust, (b) immaterial easements and rights of way which are required by governmental authorities as a condition to the use and operation of the Improvements which are approved in writing by Beneficiary after the execution of this Deed of Trust, and (c) easements, rights of way, covenants, conditions, restrictions, liens and other title limitations allowed pursuant to Section 2.3 hereof (the “Permitted Encumbrances”). Trustor shall pay and promptly discharge, at Trustor’s cost and expense, all liens, encumbrances and charges upon the Security, or any part thereof or interest therein other than the Permitted Encumbrances; provided, that the existence of any mechanic’s, laborer’s, materialman’s, supplier’s or vendor’s lien or right thereto shall not constitute a violation of this Section if payment is not yet due under the contract which is the foundation thereof. Trustor shall have the right to contest in good faith the validity of any such lien, encumbrance or charge, provided Trustor shall first deposit with the Beneficiary a bond or other security reasonably satisfactory to Beneficiary in such amounts as Beneficiary shall reasonably require, but not more than one hundred fifty percent (150%) of the amount of the claim or shall post a bond authorized by statute in lieu thereof, and provided further that Trustor shall thereafter diligently proceed to cause such lien, encumbrance or charge to be removed and discharged. If Trustor shall fail to remove and discharge any such lien, encumbrance, or charge, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be EXHIBIT 5
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obligated to, discharge the same, without inquiring into the validity of such lien, encumbrance or charge nor into the existence of any defense or offset thereto, either by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by depositing in court a bond or the amount claimed, or otherwise giving security for such claim, in such manner as is or may be prescribed by law. Trustor shall, promptly upon demand therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing right to discharge any such lien, encumbrance or charge, together with interest thereon from the date of such expenditure at the Agreed Rate and, until paid, such sums shall be secured hereby.

2.17. Beneficiary’s Powers.

Without affecting the liability of any other person liable for the payment of any Obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon any portion of the Security not then or theretofore released as security for the full amount of all unpaid Obligations, Beneficiary may, from time to time and without notice: (a) release any person so liable, (b) extend the maturity or alter any of the terms of any such Obligation (to the extent that Beneficiary is so allowed under the Loan Agreement), (c) grant other indulgences, (d) release or reconvey, or cause to be released or reconveyed at any time at Beneficiary's option any parcel, portion or all of the Security, (e) take or release any other or additional security for any Obligation herein mentioned, or (f) make compositions or other arrangements with debtors in relation thereto. By accepting payment or performance of any Obligation secured by this Deed of Trust after the payment or performance thereof is due or after the filing of notice of default and election to sell (other than satisfaction in full of the Obligations), Beneficiary shall not have thereby waived its right to require prompt payment or performance, when due, of all other Obligations secured hereby, or to declare a default for failure so to pay or perform, or to proceed with the sale under any notice of default and election to sell theretofore given by Beneficiary, or with respect to any unpaid balance of the indebtedness secured hereby. The acceptance by Beneficiary of any sum in an amount less than the sum then due shall not constitute a waiver of the obligation of Trustor to pay the entire sum then due. Trustor’s failure to pay the entire sum then due shall continue to be a default, notwithstanding the acceptance of partial payment, and, until the entire sum then due shall have been paid, Beneficiary or Trustee shall at all times be entitled to declare a default and to exercise all the remedies herein conferred, and the right to proceed with a sale under any notice of default and election to sell shall in no way be impaired, whether or not such amounts are received prior or subsequent to such notice. No delay or omission of Trustee or Beneficiary in the exercise of any other right or power hereunder shall impair such right or power or any other right or power nor shall the same be construed to be a waiver of any default or any acquiescence therein.

2.18. Suits to Protect Property.

Trustor agrees to appear in and defend any action or proceeding purporting to affect the security of this Deed of Trust or any additional or other security for the obligations secured, the interest of Beneficiary of the rights, powers and duties of Trustee, and to pay all costs and expenses, including without limitation, cost of evidence of title and reasonable attorneys’ fees, in any action or proceeding in which Beneficiary or Trustee may appear to be made a party, including, but not limited to, foreclosure or other proceeding commenced by those claiming a EXHIBIT 5
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right to any part of the Property under subordinate liens, in any action to partition or condemn all or part of the Property, whether pursued to final judgment, and in any exercise of the power of sale in this Deed of Trust, whether the sale is actually consummated.

Section 3. TAXES AND INSURANCE; ADVANCES

3.1. Taxes, Other Governmental Charges and Utility Charges. (a) Trustor shall pay, prior to delinquency, all real property taxes and assessments, general and special, and all other charges of any kind, including without limitation nongovernmental levies or assessments such as maintenance charges, levies or other charges resulting from covenants, conditions and restrictions affecting the Security, which are assessed or imposed upon the Security or upon Trustor as owner or operator of the Security, or become due and payable, and which create or may create a lien upon the Security, or any part thereof, or upon any personal property, equipment or other facility used in the operation or maintenance thereof (all the above collectively hereinafter referred to as “Impositions”); provided, however, that if, by law, any Imposition is payable, or may at the option of the taxpayer be paid, in installments, Trustor may pay the same in installments (together with any interest charged) as the same become due and before any fine, penalty or cost may be added thereto for the nonpayment of any such installment. Notwithstanding the foregoing, Trustor shall have the right to diligently contest, in good faith and by appropriate proceedings, the validity of any Imposition, so long as Trustor demonstrates to Beneficiary that Trustor is maintaining sufficient reserves for the payment of all contested liabilities and so long as the security and value of Beneficiary’s interest under this Deed of Trust are not impaired as a result of such contest. (b) If at any time after the date hereof there shall be assessed or imposed (1) a tax or assessment on the Security in lieu of or in addition to the Impositions payable by Trustor pursuant to this Section 3.1 hereof, or (2) a license fee, tax or assessment imposed on Beneficiary and measured by or based in whole or in part upon the amount of the outstanding Obligations secured hereby, then all such taxes, assessments or fees shall be deemed to be included within the term “Impositions” as defined in this Section and Trustor shall pay and discharge the same as herein provided with respect to the payment of Impositions. If Trustor fails to pay such Impositions prior to delinquency or if Trustor is prohibited by law from paying such Impositions, Beneficiary may at its option declare all Obligations secured hereby, together with all accrued interest thereon, immediately due and payable. Anything to the contrary herein notwithstanding, Trustor shall have no obligation to pay any franchise, estate, inheritance, income, excess profits or similar tax levied on Beneficiary or on the Obligations secured hereby. (c) Trustor shall deliver to Beneficiary within thirty (30) days after the date upon which any such Imposition is due and payable by Trustor official receipts of the appropriate taxing authority, or other proof reasonably satisfactory to Beneficiary, evidencing the payment thereof. Trustor shall not suffer, permit or initiate the joint assessment of any real and personal property which may constitute all or a portion of the Security and the personal property or suffer, permit or initiate any other procedure whereby the lien of real property taxes and the lien of personal property taxes shall be assessed, levied or charged to the Security as a single Lien.

Trustor shall cause to be furnished to Beneficiary a tax reporting service, covering the Property, of a type and duration, and with a company, reasonably satisfactory to Beneficiary.

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(d) In the event that Trustor shall fail to pay any of the foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within fifteen (15) business days after receipt of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the lesser of twelve percent (12%) per annum or the maximum rate permitted by law (hereinafter the “Agreed Rate”), shall become an additional Obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor agrees to pay all such amounts.

3.2. Insurance.
(a) Trustor agrees to provide insurance conforming in all respects to that required under the Loan Agreement at all times until all amounts secured by this Deed of Trust have been paid and all other Obligations secured hereunder fulfilled, and this Deed of Trust reconveyed.

All such insurance policies and coverages shall be maintained at Trustor’s sole cost and expense. (b) All said insurance shall have attached thereto a lender’s loss payable endorsement for the benefit of Beneficiary in form reasonably satisfactory to the Beneficiary and/or shall name Beneficiary as an additional insured, as Beneficiary may require, and shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policies notwithstanding any act or negligence of Trustor or any party holding under Trustor which might otherwise result in forfeiture of said insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim and deduction against Trustor.

At Beneficiary’s option, Trustor shall furnish Beneficiary with an original of all required policies of insurance and/or a certificate of insurance with all required endorsements for each required policy setting forth the coverage, the limits of liability, the deductible, if any, the name of the carrier, the policy number, and the period of coverage, which certificates and endorsements shall be executed by authorized officials of the companies issuing such insurance, or any agents or attorneys-in-fact authorized to issue said certificates and endorsements (in which event each such certificate and endorsements shall be accompanied by a notarized affidavit, agency agreement or power of attorney evidencing the authority of the signatory to issue such certificate on behalf of the insurer named therein), accompanied by a certificate from Trustor that the insurance satisfies the requirements of the Loan Agreement, and that Beneficiary may conclusively rely on such certificates. If Beneficiary consents (which consent shall not be unreasonably withheld or delayed), Trustor may provide any of the required insurance through blanket policies carried by Trustor and covering more than one location; provided, however, all such policies shall be in form and substance and issued by companies reasonably satisfactory to Beneficiary. (c) At least thirty (30) days prior to the expiration of each required policy, Trustor shall deliver to Beneficiary evidence reasonably satisfactory to Beneficiary of the payment of premium and the renewal or replacement of such policy continuing insurance in form as required by this Deed of Trust or the Loan Agreement. All such policies shall contain a provision that, notwithstanding any contrary agreement between Trustor and the insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or materially amended (which term shall include any reduction in the scope, or limits of coverage), other than for nonpayment, without at least thirty (30) days prior written notice to Beneficiary.

EXHIBIT 5
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(d) In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the debt secured hereby, all right, title and interest of Trustor in and to all policies of insurance required by Section 3.2 hereof and any unearned premiums paid thereon shall, without further act, be assigned to and shall inure to the benefit of and pass to the successor in interest to Trustor or the purchaser or grantee of the Property, and Trustor hereby appoints Beneficiary its lawful attorney-in-fact to execute an assignment thereof and any other document necessary to effect such transfer.

3.3. Advances.

In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed of Trust or shall fail to keep the Security in accordance with the Loan Agreement, the Beneficiary, after at least twenty (20) days prior written notice to Trustor, may (but shall be under no Obligation to) take out the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Beneficiary shall become an additional Obligation of the Trustor to the Beneficiary (together with any applicable interest) and shall be secured hereby, which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, shall bear interest from the date of the advance at the Agreed Rate.

Section 4. DAMAGE, DESTRUCTION OR CONDEMNATION

4.1. Casualties.

Trustor shall give prompt written notice to Beneficiary upon the occurrence of casualty to or in connection with the Security or any part thereof, whether or not covered by insurance. In the event of such casualty Trustor hereby absolutely and unconditionally assigns to Beneficiary all insurance proceeds which it may be entitled to receive and such proceeds shall be delivered to and held by Beneficiary to be applied to Beneficiary’s expenses in settling, prosecuting or defending any insurance claim, and then to the restoration of any portion of the Security that has been damaged or destroyed to the same condition, character and value as existed prior to such damage or destruction so long as the following conditions are satisfied: (i) Trustor is not in default hereunder (other than any default resulting from such casualty), (ii) Beneficiary’s security is not materially impaired, (iii) all income (from the Security or otherwise) required to pay all debt service and operating expenses of the Security during such restoration and thereafter will be equal to or greater than the income which was required to pay such debt service and operating expenses prior to the casualty, (iv) Trustor evidences to the reasonable satisfaction of Beneficiary that the insurance required to be maintained hereunder will be available to the Trustor during restoration and thereafter, (v) Beneficiary shall have approved the plans and specifications for such restoration, which approval shall not be unreasonably withheld or delayed, and (vi) in the event that in Beneficiary’s reasonable judgment the insurance proceeds and any amounts deposited with a senior lender are not sufficient to accomplish restoration, Trustor deposits with the Beneficiary or senior lender, if and to the extent required by that senior lender pursuant to the terms of the senior debt instrument, within five days of demand by Beneficiary, the additional amounts necessary to accomplish restoration. Proceeds disbursed for restoration will be released to Trustor in accordance with Beneficiary’s then current customary disbursement procedures. In the event any of the conditions set forth above are not satisfied or if EXHIBIT 5
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the insurance proceeds shall not be applied to the restoration of the Security within thirty days after receipt of such proceeds by Beneficiary, Beneficiary may release such proceeds to Trustor without such release being deemed a payment of any indebtedness secured hereby, rather than apply such proceeds to the restoration of the Security. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If the Security is restored at a cost less than the available insurance proceeds, then such excess proceeds shall, if Trustor is not then in default hereunder, be paid over to Trustor.

Beneficiary may commence, appear in, defend or prosecute any assigned claim or action, and may adjust, compromise, settle and collect all claims, proceeds and awards assigned to Beneficiary, but shall not be responsible for any failure to collect any claim, proceeds or award, regardless of the cause of the failure.

4.2. Condemnation.

Promptly upon its obtaining knowledge of the institution or the threatened institution of any proceeding for the condemnation or other taking for public or quasi-public use of the Security or any part thereof, or if the same be taken or damaged by reason of any public improvement or condemnation proceeding, or in any other manner, or should Trustor receive any notice or other information regarding such proceedings, action, taking or damage, Trustor shall promptly notify Trustee and Beneficiary of such fact. Trustor shall then, if requested by Beneficiary, file or defend its right thereunder and prosecute the same with due diligence to its final disposition and shall cause any award or settlement to be paid to Beneficiary in accordance with the provisions of the Loan Agreement. At Beneficiary’s option, Beneficiary or Trustor may be the nominal party in such proceeding but in any event Beneficiary shall be entitled, without regard to the adequacy of its security, to participate in, appear in, prosecute and settle, jointly with Trustor to control the same and to be represented therein by counsel of its choice, and Trustor will deliver, or cause to be delivered, to Beneficiary such instruments as may be requested by it from time to time to permit such participation. Trustor and Beneficiary agree to act in good faith with respect to any consent, settlement, or award arising out of said prosecution.

If the Security or any part thereof is taken or diminished in value, or if a consent settlement is entered, by or under threat of such proceedings, all compensation, awards, damages, rights of action proceeds and settlements payable to Trustor by virtue of its interest in the security shall be and hereby are assigned, transferred and set over into Beneficiary to be held by it, in trust, subject to the lien and security interest of this Deed of Trust. All such proceeds shall be first applied to reimburse Trustee and Beneficiary, for all costs and expenses, including reasonable attorneys’ fees, incurred in connection with the collection of such award or settlement, and then to the restoration of any portion of the Security that has been taken to the similar condition, character and value as existed prior to such taking so long as the following conditions are satisfied: (i) Trustor is not in default hereunder, (ii) Beneficiary’s security is not materially impaired, (iii) all income (from the Security or otherwise) required to pay all debt service and operating expenses of the Security during such restoration and thereafter will be equal to or greater than the income which was required to pay such debt service and operating expenses prior to the casualty, (iv) Trustor evidences to the reasonable satisfaction of Beneficiary that the insurance required to be maintained hereunder will be available to the Trustor during restoration and thereafter, (v) Beneficiary shall have approved the plans and specifications for such restoration, and (vi) in the event that in Beneficiary’s reasonable judgment the insurance proceeds and any amounts deposited with a senior lender are not sufficient to accomplish EXHIBIT 5
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restoration, Trustor deposits with the Beneficiary or senior lender, if and to the extent required by that senior lender pursuant to the terms of the senior Debt Instrument, within five days of demand by Beneficiary, the additional amounts necessary to accomplish restoration. Application or release of proceeds as provided herein shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.

Section 5. ENVIRONMENTAL COVENANTS OF TRUSTOR

5.1. Disclosures By Trustor.

Except as disclosed in writing to, and acknowledged and accepted in writing by Beneficiary, Trustor represents and warrants that:
(a) during the period of Trustor’s ownership of the Property (1) there has been no use, generation, manufacture, storage, treatment, disposal, discharge, Release, or threatened Release of any Hazardous Substance by any person on or around the Property except in such small quantities as are customary and usual in the ordinary course of constructing, using and operating a residential housing business on the Property and in strict compliance with all Hazardous Substances Laws, and (2) there have been no Hazardous Substances transported over or through the Property;
(b) Trustor has no knowledge of, or reason to believe that, there has been:
(1) any use, generation, manufacture, storage, treatment, disposal, Release, or threatened Release of any hazardous waste or substance by any prior owners or prior occupants of the Property or by any third parties onto the Property, or (2) any actual or threatened litigation or claims of any kind by any person relating to these matters;
(c) to Trustor’s knowledge, no Hazardous Substances in excess of permitted levels or reportable quantities under applicable Hazardous Substance Laws are present in or about the Property or any nearby real property that could migrate to the Property; (d) to Trustor’s knowledge, no Release or threatened Release exists or has occurred;
(e) to Trustor’s knowledge, no underground storage tanks of any kind are or ever have been located in or about the Property;
(f) the Property and all of Trustor’s contemplated operations and activities at, and Trustor’s contemplated use and occupancy of, the Property comply with all applicable Hazardous Substance Laws;
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(g) Trustor is now in strict compliance with, every permit, license, and approval required by all applicable Hazardous Substance Laws for all activities and operations at, and the use and occupancy of, the Property;
(h) to Trustor’s knowledge, there are no Hazardous Substance Claims pending or threatened with regard to Property or against Trustor; (i) to Trustor’s knowledge the Property has not been nor is it within 2,000 feet of any other property designated as “hazardous waste property” or “border zone property” pursuant to Health and Safety Code §§ 25220 et seq., and no proceedings for a determination of this designation are pending or threatened;
(j) to Trustor’s knowledge, there exists no occurrence or condition on any real property adjoining or within 2,000 feet of the Property that would cause the Property or any part of it to be designated as “hazardous waste property” or “border zone property” under the provisions of Health and Safety Code §§ 25220 et seq., and any regulation adopted in accordance with that section;
(k) that the Trustor’s use of the Property shall be residential housing; (l) to Trustor’s knowledge, any written disclosure submitted by or on behalf of Trustor to Beneficiary concerning any Release or threatened Release, past or present compliance by Trustor or other person of any Hazardous Substance Laws applicable to the Property, the past and present use and occupancy of the Property, and any environmental concerns relating to the Property, was true and complete when submitted and continues to be true and complete as of the date of this Deed of Trust.

As used in this Section 5.1, phrases such as “to Trustor’s knowledge,” shall refer to the actual knowledge of the Trustor, and its agents, directors and other associates, without duty of inquiry or investigation other than the ordering of a Phase I Environmental Assessment as required pursuant to the Loan Agreement.

5.2. Covenants of Trustor.

Trustor agrees, except in the ordinary course of business and in strict compliance with all applicable Hazardous Substance Laws, as follows:
(a) not to cause or permit the property to be used as a site for the use, generation, manufacture, storage, treatment, Release, discharge, disposal, transportation, or presence of any Hazardous Substance;
(b) not to cause, contribute to, permit, or acquiesce in any Release or threatened Release;
(c) not to change or modify the use of the Property without the prior written consent of Beneficiary;
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(d) to comply with and to use reasonable commercial efforts to cause the Property and every invitee or occupant of the Property to comply with all Hazardous Substance Laws;
(e) to promptly upon Trustor’s discovery thereof, notify Beneficiary in writing of and to provide Beneficiary with a reasonably detailed description of:
(1) any noncompliance of the Property with any Hazardous Substance Laws;
(2) any Hazardous Substance Claim;
(3) any Release or Threatened Release;
(4) the discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that would cause the Property or any part of it to be designated as “hazardous waste property” or “border zone property” under the provisions of Health and Safety Code §§ 25220 et seq., and any regulation adopted in accordance with that section;
(f) if Trustor discovers a Release or the presence of any Hazardous Substance on or about the Property in violation of any Hazardous Substance Law, to:
(1) notify Beneficiary of that discovery together with a reasonably detailed description;
(2) engage promptly after a request by Beneficiary, a qualified environmental engineer reasonably satisfactory to Beneficiary to investigate these matters and prepare and submit to Beneficiary a written report containing the findings and conclusions resulting from that investigation, all at the sole expense of Trustor, and (3) If the Release of Hazardous Substances results in (i) injury to any person, (ii) injury to or contamination of the Property (or a portion thereof), or (iii) injury to or contamination of any real or personal property wherever situated take, at Trustor’s sole expense, all necessary actions to remedy, repair, clean up, or detoxify any Release of Hazardous Substance, including, but not limited to, any remedial action required by any Hazardous Substance Laws or any judgment, consent, decree, settlement, or compromise in respect of any Hazardous Substance Claims, these actions to be performed:

A. in accordance with Hazardous Substance Laws,
B. in a good and proper manner,
C. under the supervision of a qualified environmental engineer approved in writing by Beneficiary (such approval not to be unreasonably withheld or delayed), EXHIBIT 5
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D. in accordance with plans and specifications for these actions approved in writing by Beneficiary (such approval not to be unreasonably withheld or delayed), and
E. using licensed and insured qualified contractors approved in writing by Beneficiary;
(g) promptly furnish to Beneficiary copies of all written communications received by Trustor from any governmental authority or other person or given by Trustor to any person and any other information Beneficiary may reasonably request concerning any Release, threatened Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance on or about the Property in violation of any Hazardous Substance Law; and (h) keep Beneficiary generally informed regarding any Release, threatened Release, Hazardous Substance Claim, or the discovery of any Hazardous Substance on or about the Property in violation of any Hazardous Substance Law.

5.3. Rights of Beneficiary.

Upon Beneficiary’s reasonable belief of the existence of a past or present Release or threatened Release not previously disclosed by Trustor in connection with the making of the Loan or the execution of this Deed of Trust or upon Beneficiary’s reasonable belief that Trustor has failed to comply with any environmental provision of this Deed of Trust or any other Loan Document and upon not less than 72 hours’ prior written notice (except in the case of an emergency) to Trustor, Beneficiary or its representatives, employees, and agents, may from time to time and at all reasonable times during regular business hours (or at any time in the case of an emergency) enter and inspect the Property and every part of it (including all samples of building materials, soil, and groundwater and all books, records, and files of Trustor relating to the Property) and perform those acts and things that Beneficiary reasonably deems necessary to inspect, investigate, assess, and protect the Security of this Deed of Trust, for the purpose of determining:
(a) the existence, location, nature, and magnitude of any past or present Release or threatened Release,
(b) the presence of any Hazardous Substances on or about the Property in violation of any Hazardous Substance Law, and
(c) the compliance by Trustor of every environmental provision of this Deed of Trust and every other Loan Document.

In furtherance of the purposes above, without limitation of any of its other rights, Beneficiary may:
(1) obtain a court order to enforce Beneficiary’s right to enter and inspect the Property under Civil Code § 2929.5; and
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(2) have a receiver appointed under Code of Civil Procedure § 564 to enforce Beneficiary’s right to enter and inspect the Property for the purpose set forth above.

All reasonable costs and expenses incurred by Beneficiary with respect to the audits, tests, inspections, and examinations that Beneficiary or its agents, representatives, or employees may conduct, including the reasonable fees of the engineers, laboratories, contractors, consultants, and attorneys, will be paid by Trustor. All reasonable costs or expenses incurred by Trustee and Beneficiary pursuant to this Section (including without limitation court costs, consultant’s fees, and attorney fees, whether incurred in litigation and whether before or after judgment) will bear interest at the Agreed Rate from the date they are incurred until those sums have been paid in full. Except as provided by law, any inspections or tests made by Beneficiary or its representatives, employees, and agents will be for Beneficiary’s purposes only and will not be construed to create any responsibility or liability on the part of Beneficiary to Trustor or to any other person. Beneficiary will have the right, but not the obligation, to communicate with any governmental authority regarding any fact or reasonable belief of Beneficiary that constitutes or could constitute a breach of any of Trustor’s obligations under any environmental provision contained in this Deed of Trust or any Loan Document.

5.4. Waiver and Indemnity.

Trustor:
(a) releases and waives any future claims against Beneficiary for indemnity or contribution in the event Trustor becomes liable for cleanup or other costs under any Hazardous Substance Laws or under any Hazardous Substance Claim except to the extent such liability arises out of the gross negligence or willful misconduct or Beneficiary; (b) agrees to reimburse Beneficiary, on demand, for all costs and expenses incurred by Beneficiary in connection with any review, approval, consent, or inspection relating to the environmental provisions in this Deed of Trust together with interest, after demand, at the Agreed Rate; and
(c) agrees to indemnify, defend, and hold Beneficiary and Trustee harmless from all losses, costs, claims, damages, penalties, liabilities, causes of action, judgments, court costs, reasonable attorney fees and other legal expenses, costs of evidence of title, cost of evidence of value, and other expenses (collectively, “Expenses”), including, but not limited to, any Expenses incurred or accruing after the foreclosure of the lien of this Deed of Trust, which either may suffer or incur and which directly or indirectly arises out of or is in any way connected with the breach of any environmental provision either in this Deed of Trust or in any Loan Document or as a consequence of any Release or threatened Release or the presence, use, generation, manufacture, storage, disposal, transportation, Release, or threatened Release of any Hazardous Substance on or about the Property, including the soils and groundwater, caused or permitted by Trustor, including, without limitation, to the extent required by an environmental agency with jurisdiction over the Property, the cost of any required or necessary repair, cleanup, remedy, or detoxification of any hazardous Substance and the preparation of any closure, remedial action, or other required plans. Trustor’s obligations will survive the satisfaction, release, or cancellation of the indebtedness, the release and reconveyance or partial release and EXHIBIT 5
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reconveyance of this Deed of Trust, and the foreclosure of the lien of this Deed of Trust or deed in lieu of the Deed of Trust.

5.5. Additional Covenants of Trustor.
(a) Trustor and Beneficiary agree that:
(1) this Section is intended as Beneficiary’s written request for information and Trustor’s written response concerning the environmental condition of the Property as provided by Code of Civil Procedure § 726.5; and (2) each representation, warranty, covenant, or indemnity made by Trustor in this Section or in any other provision of this Deed of Trust or any Loan Document that relates to the environmental condition of the Property is intended by Trustor and Beneficiary to be an “environmental provision” for purposes of Code of Civil Procedure § 736 and will survive the payment of the indebtedness and the termination or expiration of this Deed of Trust and will not be affected by Lender’s acquisition of any interest in the Property, whether by full credit bid at foreclosure, deed in lieu of that, or otherwise. If there is any transfer of any portion of Trustor’s interest in the Property, any successor-in-interest to Trustor agrees by its succession to that interest that the written request made pursuant to this Section will be deemed remade to the successor-in-interest without any further or additional action on the part of Beneficiary and that by assuming the debt secured by this Deed of Trust or by accepting the interest of Trustor subject to the lien of this Deed of Trust, the successor remakes each of the representations and warranties in this Deed of Trust and agrees to be bound by each covenant in this Deed of Trust, including, but not limited to, any indemnity provision. (b) Even though Trustor may have provided Beneficiary with an environmental site assessment or other environmental report together with other relevant information regarding the environmental condition of the Property, Trustor acknowledges and agrees that Beneficiary is not accepting the Property as security for the Loan based on that assessment, report, or information. Rather, Beneficiary has relied on the representations and warranties of Trustor in this Deed of Trust, and Beneficiary is not waiving any of its rights and remedies in the environmental provisions of this Deed of Trust or any other Loan Document. (c) Beneficiary or its agents, representatives, and employees may seek a judgment that Trustor has breached its covenants, representations, or warranties in Section 2 of this Deed of Trust or any other covenants, representations, or warranties that are deemed to be “environmental provisions” pursuant to Code of Civil Procedure § 736 (each an “Environmental Provision”), by commencing and maintaining an action or actions in any court of competent jurisdiction pursuant to Code of Civil Procedure § 736, whether commenced prior to or after foreclosure of the lien of this Deed of Trust. Beneficiary or its agents, representatives, and employees may also seek an injunction to cause Trustor to abate any action in violation of any Environmental Provision and may seek the recovery of all costs, damages, expenses, fees, penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket costs or expenses actually incurred by Beneficiary (collectively, “Environmental Costs”) incurred or advanced by Beneficiary relating to the cleanup, remedy, or other response action required by any Hazardous Substances Law or any Hazardous Substance Claim. It will be EXHIBIT 5
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conclusively presumed between Beneficiary and Trustor that all Environmental Costs incurred or advanced by Beneficiary relating to the cleanup, remedy, or other response action of or to the Property were made by Beneficiary in good faith. All reasonable Environmental Costs incurred by Beneficiary under this Section (including without limitation court costs, consultant fees, and attorney fees, whether incurred in litigation and whether before or after judgment) will bear interest at the Agreed Rate from the date of expenditure until those sums have been paid in full.

Beneficiary will be entitled to bid, at any trustee’s or foreclosure sale of the Property, the amount of the costs, expenses, and interest in addition to the amount of other indebtedness. (d) Beneficiary or its agents, representatives, and employees may waive its lien against the Property or any portion of it, including but not limited to the Improvements, to the extent that the Property or any portion of the Security is found to be environmentally impaired in accordance with Code of Civil Procedure § 726.5, and to exercise all rights and remedies of an unsecured creditor against Trustor and all of Trustor’s assets and property for the recovery of any deficiency and Environmental Costs, including, but not limited to, seeking an attachment order under Code of Civil Procedure § 483.010. As between Beneficiary and Trustor, for purposes of Code of Civil Procedure § 726.5, Trustor will have the burden of proving that Trustor or any related party (or any affiliate or agent of Trustor or any related party) was not in any way negligent in permitting the Release or threatened Release of the Hazardous Substances.

Section 6. ASSIGNMENTS OF RENTS, ISSUES AND PROFITS

6.1. Assignment.

Trustor hereby absolutely, irrevocably and unconditionally assigns to Beneficiary, as security for the Obligations, all rents, profits, deposits, royalties, income and other issues and similar benefits derived from the Security (collectively, the “Rents”), and hereby confers upon Beneficiary the right, power and authority to collect such Rents. Trustor irrevocably appoints Beneficiary its true and lawful attorney-in-fact, at the option of Beneficiary, at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in its name or in the name of Trustor, for all Rents, and apply the same to the Obligations secured hereby; provided, however, that Trustor shall have the right, as between Trustor and Beneficiary, to collect the Rents but not more than one (1) month in advance of the date due unless the written approval of Beneficiary has first been obtained, with the exception of security deposits and “first and last months’ rent” collected from tenants in connection with Trustor’s ordinary leasing of residential apartments within the Property), and to retain and enjoy the same, so long as an Event of Default shall not have occurred hereunder and be continuing.

6.2. Collection Upon Default.

While any Event of Default remains uncured, Beneficiary may, at any time without notice, either in person, by agent or by a receiver appointed by a court, and without regard to the adequacy of any security for the Obligations hereby secured, enter upon and take possession of the Security, or any part thereof, and, with or without taking possession of the Security or any part thereof, in its own name sue for or otherwise collect such Rents (including those past due and unpaid, and all prepaid Rents and all other monies which may have been or may hereafter be EXHIBIT 5
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deposited with Trustor by any tenant to secure the payment of any Rent or for any services thereafter to be rendered by Trustor for any other obligation of any tenant to Trustor arising under any lease, and Trustor agrees that, upon the occurrence of any Event or Default hereunder, Trustor shall promptly deliver all Rents and other moneys to Beneficiary), and Beneficiary may apply the same, less costs and expenses of operation and collection, including, without limitation, reasonable attorneys fees, whether or not suit is brought or prosecuted to judgment, against any indebtedness or Obligation of Trustor secured hereby, and in such order as Beneficiary may determine notwithstanding that said indebtedness or the performance of said Obligation may not then be due. The collection of Rents, or the entering upon and taking possession of the Security, or the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or pursuant to such notice of default or be deemed or construed to make Beneficiary a mortgageein-possession of the Security or any portion thereof.

6.3. Further Assignments.

Upon demand of Beneficiary, Trustor shall, from time to time hereafter, execute, and deliver to Beneficiary recordable assignments of Trustor’s interest in any or all leases, subleases, contracts, rights, licenses and permits now or hereafter affecting the Security or any portion thereof. Such assignments shall be made by instruments in form and substance reasonably satisfactory to Beneficiary; provided, however, that no such assignment shall be construed as imposing upon Beneficiary any obligation with respect thereto. Beneficiary may, at its option, exercise its rights hereunder or under any such specific assignment and such exercise shall not constitute a waiver of any right hereunder or under any such specific assignment.

Section 7. EVENTS OF DEFAULT

7.1. Events of Default.

Each of the following shall constitute Events of Default: (1) the occurrence of an “Event of Default” as defined in the Loan Agreement or as defined in any Debt Instrument; or (2) the failure to make any payment or perform any of Trustor’s other Obligations now or hereafter secured by this Deed of Trust (subject to written notice and expiration of any applicable cure period).

7.2. Acceleration of Maturity.

If an Event of Default shall have occurred and be continuing, then at the option of the Beneficiary, the amount of any payment related to the Event of Default, the unpaid Principal of the Note and any other indebtedness and other Obligations secured hereby shall immediately become due and payable without presentment, protest notice or demand, all of which are hereby expressly waived, upon written notice by the Beneficiary to the Trustor and no omission on the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a waiver of such right.

7.3. The Beneficiary’s Right to Enter and Take Possession.

If an Event of Default shall have occurred and be continuing, the Beneficiary may:

EXHIBIT 5
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(a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it reasonably deems necessary to preserve the value or marketability of the Security, or part thereof or interest therein, increase the income therefrom or protect the security thereof and, with or without taking possession of the Security, sue for or otherwise collect the Rents, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection including without limitation reasonable attorneys fees, against any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon and taking possession of the Security the collection of such Rents and the application thereof as aforesaid shall not cure or waive any Event of Default or notice of default hereunder or invalidate any act done in response to such Event of Default or pursuant to such notice of default, and, notwithstanding the continuance in possession of the Security, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise the power of sale;
(b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor’s interest in the Security to be sold, which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of Orange City; or
(d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the Obligations secured hereby, or provided by law.

7.4. Foreclosure by Power of Sale.

Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust, the Loan Agreement and the Note which is secured hereby (and the deposit of which shall be deemed to constitute evidence that the unpaid Principal amount of the Note is immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require.
(a) Upon receipt of such notice from the Beneficiary (“Notice of Default”), Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and election to sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after notice of sale having been given as required by law (“Notice of Sale”), sell the Security, at the time and place of sale fixed by it in said Notice of Sale, whether as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in such order as it may determine unless specified otherwise to the Trustor according to California Civil EXHIBIT 5
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City Rental Rehabilitation Program Deed of Trust
Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed or any matters of facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale. (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of: (1) the unpaid Principal amount of the Note; (2) all other sums then secured hereby; and (3) the remainder, if any, to Trustor. (c) Trustee may postpone sale of all or any portion of the Security by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale.

7.5. Receiver
If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under the Security, and without regard to the then value of the Security or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Security, unless such receivership is sooner terminated.

7.6. Application of Funds After Default.

Except as otherwise herein provided, upon the occurrence of an Event of Default hereunder, and while such Event of Default remains uncured, Beneficiary may, at any time without notice, apply any or all sums or amounts received and held by Beneficiary to pay insurance premiums, Impositions, or either of them, or as Rents or income of the Security, or as insurance or condemnation proceeds, and all other sums or amounts received by Beneficiary from or on account of Trustor or the Security, or otherwise, against any indebtedness or Obligation of the Trustor secured hereby, in such manner and order as Beneficiary may elect.

The receipt, use or application of any such sum or amount shall not be construed to affect the maturity of any indebtedness secured by this Deed of Trust, or any of the rights or powers of Beneficiary under the terms of the Loan Agreement, this Deed of Trust or the Note, or any of the Obligations of Trustor or any guarantor under any other instruments or documents now or hereafter delivered in connection with the Loan Agreement or to cure or waive any default or notice of default under the Loan Agreement or any such instruments or documents; or to invalidate any act of Trustee or Beneficiary.

7.7. Costs of Enforcement.

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If any Event of Default occurs, Beneficiary and Trustee, and each of them, may employ an attorney or attorneys to protect their rights hereunder. Trustor promises to pay to Beneficiary, on demand, the reasonable fees and expenses of such attorneys and all other reasonable costs of enforcing the Obligations secured hereby, including, without limitation, recording fees, the expense of a trustee, sale guarantee, Trustee’s fees and expenses, receivers fees and expenses, and all other reasonable expenses, of whatever kind or nature, incurred by Beneficiary and Trustee, and each of them, in connection with the enforcement of the Obligations secured hereby, whether or not such enforcement includes the filing of a lawsuit. Until paid, such sums shall be secured hereby and shall bear interest at the Agreed Rate.

7.8. Remedies Cumulative.

No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is 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 given hereunder or now or hereafter existing at law or in equity.

7.9. No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Event of Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary.

No consent or waiver, expressed or implied, by the Beneficiary to or any breach by the Trustor in the performance of the Obligations hereunder shall be deemed or construed to be a consent to or waiver of Obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any rights, power or remedies consequent on any Event of Default by the Trustor. (b) If the Beneficiary (1) grants forbearance or an extension of time for the payment of any sums secured hereby, (2) takes other or additional security or the payment of any sums secured hereby, (3) waives or does not exercise any right granted in the Loan Agreement, (4) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements in the Loan Agreement, (5) consents to the granting of any easement or other right affecting the Security, or (6) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, cosigner, endorser, surety or guarantor (unless expressly released); nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in any Event of Default then made or of any subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby.

7.10. Suits to Protect the Security.

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City Rental Rehabilitation Program Deed of Trust
The Beneficiary shall have power to: (1) institute and maintain such suits and proceedings as it may in its reasonable discretion deem expedient to prevent any impairment of the Security and the rights of the Beneficiary as may be unlawful or any violation of this Deed of Trust, (2) preserve or protect its interest (as described in this Deed of Trust) in the Security, and (3) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interest of the Beneficiary.

7.11. Trustee May File Proofs of Claim.

In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary in order to have the claims of the Beneficiary allowed in such proceedings and for any additional amount which may become due and payable by the Trustor hereunder after such date.

7.12. Limited Partner Cure Rights.

Notwithstanding anything to the contrary in this Deed of Trust, Beneficiary shall give the investor limited partner of Trustor the following notice at the address provided in Section 8.3(b) and cure rights:
(a) Beneficiary will give the limited partner a copy of any notice (at the limited partner's address provided in a notice by Trustor to Beneficiary) that Beneficiary gives to Trustor under this Deed of Trust, provided that Trustor has provided the address and contact information for the investor limited partner in writing to Beneficiary; (b) Beneficiary will give the limited partner thirty (30) days after the limited partner's receipt of such notice to cure a non-payment of any sum due under this Deed of Trust; (c) Beneficiary will give the limited partner sixty (60) days after the limited partner's receipt of such notice to cure any other default under this Deed of Trust; (d) If a non-monetary default is incapable of being cured within sixty (60) days, Beneficiary will give the limited partner such additional time as is reasonably necessary to cure such default provided the limited partner has commenced to cure such default and is diligently proceeding to cure such default through the end of such period; and (e) If the limited partner makes any such payment or otherwise cures such default, the Beneficiary will accept such action as curing such default as if such payment or cure were made by Trustor.

Section 8. MISCELLANEOUS

8.1. Amendments.

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City Rental Rehabilitation Program Deed of Trust
This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by Beneficiary and Trustor.

8.2. Reconveyance by Trustee.

Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee’s reasonable fees, Trustee shall reconvey, without warranty, the Security to Trustor, or to the person or persons legally entitled thereto.

8.3. Notices.
(a) If at any time after the execution of this Deed of Trust it shall become necessary or convenient for one of the parties hereto to serve any notice, demand or communication upon the other party, such notice, demand or communication shall be in writing and shall be served personally or by depositing the same in the registered United States mail, return receipt requested, postage prepaid and:
(1) if intended for Beneficiary shall be addressed to:

City of Santa Ana
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P .0. Box 1988
Santa Ana, California 92702
(2) if intended for Trustors shall be addressed to:

Trustor: Westview House LP
c/o Westview House CDP LLC
3416 Via Oporto, Suite 301
Newport Beach, CA 92663
Attn: Kyle Paine
With a copy to: Westview House Mercy House CHDO LLC
807 N. Garfield Street
Santa Ana, CA 92701
Attn: Lawrence G. Haynes, Jr.

And: Sabelhaus & Strain, LLP
1724 10th Street, Suite 110
Sacramento, CA 95811
Attn: Stephen A. Strain, Esq.

And: Chernove and Associates, Inc.
16027 Ventura Boulevard #660
Encino, CA 91436
EXHIBIT 5
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30 Westview House
City Rental Rehabilitation Program Deed of Trust
Attn: Sheldon Chernove, Esq.

With a copy to:

R4 WHCA Acquisition LP
c/o R4 Capital LLC
780 Third Avenue, 16th Floor
New York, New York 10017
Attention: Marc Schnitzer
E-Mail: [email protected]
And to:

Frost Brown Todd LLC
400 West Market Street, Suite 3200
Louisville, Kentucky 40202
Attention: Amy Curry
Any notice, demand or communication shall be deemed given, received, made or communicated on the date personal delivery is effected or, if mailed in the manner herein specified, on the delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either party may change its address at any time by giving written notice of such change to Beneficiary or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the date such change is desired to be effective.

8.4. Successors and Joint Trustors.

All Obligations of Trustor secured by this Deed of Trust, shall also apply to and bind any permitted transferee or successors in interest. Where the terms of the Deed of Trust have the effect of creating an Obligation of the Trustor and a transferee, such Obligation shall be deemed to be a joint and several Obligation of the Trustor and such transferee. Where Trustor is more than one entity or person, all Obligations of Trustor shall be deemed to be a joint and several Obligation of each and every entity and person comprising Trustor.

8.5. Captions.

The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust.

8.6. Invalidity of Certain Provisions.

Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or other body of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or EXHIBIT 5
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City Rental Rehabilitation Program Deed of Trust
under foreclosure or other enforcement action or procedure, shall be considered to have been first paid or applied to the full payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust.

8.7. Governing Law and Venue.

This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. In the event of any legal action to enforce or interpret this Deed of Trust, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394.

8.8. Gender and Number.

In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires.

8.9. Deed of Trust, Mortgage.

Any reference in this Deed of Trust to a mortgage shall also refer to a deed of trust and any reference to a deed of trust shall also refer to a mortgage.

8.10. Actions.

Trustor agrees to appear in and defend any action or proceeding purporting to affect the Security.

8.11. Substitution of Trustee.

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 title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the City or counties in which the Security is situated, shall be conclusive proof of proper appointment of the successor trustee.

8.12. Acceptance by Trustee.

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 of Trust or of any action of proceedings in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.

8.13. Conflicts.

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City Rental Rehabilitation Program Deed of Trust
If any term or provision of this Deed of Trust conflicts with any term of provision of the Loan Agreement, the term or provision of the Loan Agreement shall control to the extent of such conflict.

8.14. Statements by Trustor.

Trustor shall, at its cost, within ten (10) days after notice thereof from Beneficiary, deliver to Beneficiary a written statement setting forth to the best of its knowledge and information, the amounts then unpaid and secured by this Deed of Trust and stating whether Trustor is aware of any offset or defense against such amounts.

8.15. Beneficiary Statements.

For any statement or accounting requested by Trustor or any other entitled person pursuant to Section 2943 or Section 2954 of the California Civil Code or pursuant to any other provision of applicable law, or for any other document or instrument furnished to Trustor by Beneficiary, Beneficiary may charge the maximum amount permitted by law at the time of the request therefor, or if there be no such maximum, then in accordance with Beneficiary’s customary charges therefor or the actual cost to Beneficiary therefor, whichever is greater.

8.16. Statute of Limitations.

Except insofar as now or hereafter prohibited by law, the right to plead, use or assert any statute of limitations as a plea or defense or bar of any kind, or for any purpose, to any debt, demand or obligation secured or to be secured hereby, or to any complaint or other pleading or proceeding filed, instituted or maintained for the purpose of enforcing this Deed of Trust or any rights hereunder, is hereby waived by Trustor.

8.17. Trust Irrevocable; No Offset.

The Trust created hereby is irrevocable by Trustor. No offset or claim that Trustor now has or may in the future have against Beneficiary shall relieve Trustor from paying the indebtedness or performing any other Obligation contained herein or secured hereby.

8.18. Corrections.

Trustor shall, upon request of Beneficiary, promptly correct any defect, error or omission which may be discovered in the contents hereof or in the execution or acknowledgment hereof, and will execute, acknowledge and deliver such further instruments and do such further acts as may be necessary or as may be reasonably requested by Beneficiary to carry out more effectively the purposes thereof, to subject to, the lien and security interest hereby created any of Trustor’s properties, rights or interests covered or intended to be covered hereby, or to perfect and maintain such lien and security interest.

8.19. Further Assurance.

Trustor, Beneficiary and Trustee agree to do or cause to be done such further acts and things and to execute and deliver or to cause to be executed and delivered such additional EXHIBIT 5
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assignments, agreements, powers and instruments, as any of them may reasonably require to keep valid and effective the charges and liens hereof, to carry into effect the purposes of this Deed of Trust or to better assure and confirm unto any of them their rights, powers and remedies hereunder; and, upon request by Beneficiary, shall supply evidence of fulfillment of each of the covenants herein contained concerning which a request for such evidence has been made.

8.20. Waiver of Jury Trial.

Unless prohibited by Federal, State or local laws, each party acknowledges that it is aware of and has had the advice of counsel of its choice with respect to its rights to trial by jury, and each party, for itself and its successors and assigns, does hereby expressly and knowingly waive and release all such rights to trial by jury in any action, proceeding or counterclaim brought by any party hereto against the other (and/or against its officers, directors, employees, agents, or subsidiary or affiliated entities) on or with regard to any matters whatsoever arising out of or in any way connected with this Deed of Trust and/or any claim of injury or damage to the fullest extent permitted by applicable law.

8.21. Tax Credits.

Beneficiary agrees that the lien of this Deed of Trust shall be subordinate to any extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the “Extended Use Agreement”) recorded against the Security; provided that such Extended Use Agreement, by its terms, must terminate upon foreclosure under this Instrument or upon a transfer of the Security by instrument in lieu of foreclosure, in accordance with Section 42(h)(6)(E) of the Internal Revenue Code.

Section 9. WAIVERS

9.1. Waivers and Related Matters.
(a) To the fullest extent allowed by law, Trustor hereby waives: (i) presentment, demand, protest, notice of dishonor, notice of protest and all other notices and demands of every kind, and all suretyship defenses of every kind that would otherwise be available in connection with this Deed of Trust, and (ii) all rights of redemption, valuation, appraisement, stay of executive, notice of election to mature or declare due the whole of the Obligation and marshaling in the event of foreclosure of the liens hereby created. (b) Trustor hereby authorizes Beneficiary, at any time and from time to time without notice and without affecting this Deed of Trust in any way, to: (i) accept new or additional instruments, documents, agreements, security or guaranties in connection with all or any part of the Obligations; (ii) accept partial payments on the Obligations; and (iii) waive, release, reconvey, terminate, abandon, subordinate, exchange, substitute, transfer, compound, compromise, liquidate and enforce all or any part of the Obligations and any security or guaranties therefor, and apply any such security and direct the order or manner of sale thereof and bid and purchase at any such sale.
(c) Trustor hereby waives any right to require Beneficiary to (i) proceed against any person; (ii) proceed or exhaust any collateral held from any person; or (iii) pursue EXHIBIT 5
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City Rental Rehabilitation Program Deed of Trust
any other remedy in Beneficiary’s power. Upon the occurrence of any Event of Default, Beneficiary is hereby expressly given the right, at its option, to proceed in the enforcement of this Deed of Trust, independently of any other remedy or security Beneficiary may at any time hold in connection with the Obligations, and Beneficiary shall not in any way be obligated or otherwise required to proceed upon or against and/or exhaust any other security or remedy before proceeding to enforce this Deed of Trust.
(d) Trustor hereby waives any defense arising by reason of: (i) any disability or other defense of Trustor or any other person; (ii) the cessation from any cause whatsoever, other than full payment and performance of the Obligations, of the Obligations of Trustor or any other person; or (iii) any act or omission by Beneficiary which directly or indirectly results in or aids in the discharge or release of Trustor, or any other person, any Obligation, or any collateral by operation of law or otherwise.

The waivers set forth in this Section 9 shall also apply, to the fullest extent permitted by law to all other real and/or personal property of Trustor now or hereafter assigned to Beneficiary as security for the Obligations. Trustor warrants and agrees that each, of the waivers set forth above are made with Trustor’s full knowledge of their significance and consequences, with the understanding that events giving rise to any defense waived may diminish, destroy or otherwise adversely affect rights which Trustor otherwise may have against Beneficiary or others, or against collateral, and that under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any of the waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective to the maximum extent permitted by law. {signatures on following page}
EXHIBIT 5
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Westview House Exhibit A
City Rental Rehabilitation Program Deed of Trust
IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date first written above.

TRUSTOR:

Westview House LP,
a California limited partnership
By: Westview House CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By: _________________________
Kyle Paine
Its: President
By: Westview Mercy House CHDO, LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By: _________________________
Lawrence G. Haynes, Jr.

Its: Chief Executive Officer
EXHIBIT 5
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Westview House Exhibit A
City Rental Rehabilitation Program Deed of Trust

EXHIBIT A

LEGAL DESCRIPTION
EXHIBIT 5
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PRELIMINARY REPORT Fidelity National Title Company
Your Reference: Order No.: 997-30079690-TS4
CLTA Preliminary Report Form – Modified (11/17/06) Page 3

EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SANTA ANA IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PARCEL 1:

THAT PORTION OF THE NORTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 10, TOWNSHIP 5 SOUTH, RANGE 10 WEST, SAN BERNARDINO BASE AND MERIDIAN, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE NORTH LINE OF SAID SECTION 10, 220 FEET WEST OF THE NORTHEAST CORNER OF SAID SECTION 10, RUNNING THENCE SOUTH PARALLEL TO THE EAST LINE OF SAID SECTION 10, 436 FEET; THENCE WEST PARALLEL TO THE NORTH LINE OF SAID SECTION 10, 150 FEET; THENCE NORTH PARALLEL TO THE EAST OF SAID SECTION 10, 436 FEET TO THE NORTH LINE OF SAID SECTION; THENCE EAST ALONG SAID NORTH LINE, 150 FEET TO THE POINT OF BEGINNING.

EXCEPTING THEREFROM AN UNDIVIDED ONE-HALF INTEREST IN ALL OIL, GAS, ASPHALTUM, AND OTHER KINDRED SUBSTANCES AS RESERVED IN THAT CERTAIN DEED RECORDED DECEMBER 04, 1925 IN BOOK 617, PAGE 39 OF DEEDS, AND AS RESERVED IN THE DEED RECORDED JULY 03, 1925 IN BOOK 593, PAGE 215 OF DEEDS.

ALSO EXCEPTING THEREFROM AN UNDIVIDED ONE-FOURTH INTEREST IN ALL OIL, GAS, AND OTHER

HYDROCARBON SUBSTANCES AND MINERALS AS RESERVED IN THAT CERTAIN DEED RECORDED APRIL 20, 1955 IN BOOK 3037, PAGE 204 OF OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM THAT PORTION OF LAND CONVEYED TO THE CITY OF SANTA ANA BY CONDEMNATION, RECORDED MARCH 04, 1999 AS INSTRUMENT NO. 19990156659 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 198-132-21
PARCEL 2:

LOT 5 OF TRACT NO. 9536 IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 400, PAGES 13 AND 14 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE

COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH PORTIONS OF THE NORTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 10, TOWNSHIP 5 SOUTH, RANGE 10 WEST, SAN BERNARDINO BASE AND MERIDIAN, AS SAID SECTION IS SHOWN ON A MAP FILED IN BOOK 51, PAGE 12 OF MISCELLANEOUS MAPS, SHOWN AND DESCRIBED AS PARCEL 1 OF LOT LINE ADJUSTMENT NO. 2005-11 RECORDED JANUARY 13, 2006 AS INSTRUMENT NO. 2006029348 OF OFFICIAL RECORDS OF SAID COUNTY.

EXCEPTING THEREFROM AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, ASPHALTUM, OR OTHER

KINDRED SUBSTANCES IN, UPON, OR UNDER SAID PREMISES, AS CONVEYED TO CHARLES MENDENHALL BY DEED RECORDED FEBRUARY 16, 1922 IN BOOK 414, PAGE 192 OF DEEDS.

ALSO EXCEPTING THEREFROM AN UNDIVIDED ONE-HALF OF ALL OIL, GAS, ASPHALTUM, OR OTHER

KINDRED SUBSTANCES IN, UPON, OR UNDER SAID PREMISES, AS RESERVED BY CHARLES MENDENHALL, BY DEED RECORDED MAY 19, 1922 IN BOOK 423, PAGE 145 OF DEEDS.

APN: 198-132-23
EXHIBIT 5
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Exhibit E:

City/Rental
Rehabilitation
Program Loan Note
EXHIBIT 5
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1 Westview House
City Rental Rehabilitation Program Loan Note

CITY RENTAL REHABILITATION PROGRAM LOAN NOTE

SECURED BY SUBORDINATED DEED OF TRUST

TO THE CITY OF SANTA ANA, CALIFORNIA
(2530 & 2534 Westminster Avenue, Santa Ana, California) $386,523 May 26, 2022
Santa Ana, California

1. PRINCIPAL AMOUNT OF LOAN.

For value received, WESTVIEW HOUSE LP, a California limited partnership (“Borrower”) promises to pay to the order of THE CITY OF SANTA ANA (“City"), at 20 Civic Center Plaza, 6th Floor, Santa Ana, California 92701, or at such other place as the City may from time to time designate in writing, or to the assignee of the City, the principal sum of THREE HUNDRED AND EIGHTY SIX THOUSAND, FIVE HUNDRED AND TWENTY THREE DOLLARS AND NO CENTS ($386,523.00) or so much thereof as shall be disbursed hereunder, with three percent (3%) simple interest per annum and commencing from the date of issuance of the Certificate of Completion.

City and Borrower have heretofore entered into that certain Rental Rehabilitation Program Loan Agreement dated concurrently herewith (the "Loan Agreement"), pertaining to the acquisition, rehabilitation and/or construction of certain real property described in the Loan Agreement as the "Property," commonly known as 2530 and 2534 Westminster Avenue, Santa Ana, California, and the operation of the Property as affordable housing for Extremely-Low and Low Income households. This City Rental Rehabilitation Program Loan Note (the “Note”) is made pursuant to, entitled to the benefits of and referred to as the City/Rental Rehabilitation Program Loan Note in the Loan Agreement; that certain “Affordability Restrictions on Transfer of Property” between Borrower and City, dated on or about the date hereof; and that certain Subordinated City/Rental Rehabilitation Program Deed of Trust and Assignment of Rents by Borrower for the benefit of City, dated on or about the date hereof (the "City Deed of Trust"). This Note, the Loan Agreement, the City Deed of Trust and the Affordability Restrictions on Transfer of Property are sometimes collectively referred to herein as the "Loan Documents." The Loan Documents and the rights and responsibilities thereto inure to the benefit of the City. Any capitalized term that is not otherwise defined herein shall have the meaning ascribed to such term in the Loan Agreement.

2. DEFINITIONS.

For the purpose of calculating the payments to be made by Borrower to City pursuant to this Note, the following terms shall have the following respective meanings:
"City Loan" shall mean the loan evidenced by this Note.

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City Rental Rehabilitation Program Loan Note
"City’s Percentage" with reference to the Residual Receipts, shall mean 50% [or the prorated percentage of the total amount of funds contributed after Borrower retains fifty percent of the Residual Receipts, whichever is less], of the City’s share of the total Residual Receipts from the Property, as further described in Section 5 hereof. If other lenders to the Property are also repaid from Residual Receipts, City’s Percentage shall be reduced proportionally to the ratio that the original principal amount of the City Loan bears to the original principal amount of all loans being repaid from Residual Receipts multiplied by 50%.
“Calendar Year” means each consecutive twelve (12) month period from January 1 to December 31.
"Closing Costs" shall mean:
(i) In the case of a Sale, reasonable brokerage commissions payable to a broker as a result of the Sale, which shall not in any event exceed the customary amount charged-for similar transactions in the immediate marketplace, costs of title insurance premiums, documentary stamp taxes, escrow fees, recording charges, loan repayment charges and other costs reasonably incurred with respect to the Property, in each case actually paid by Borrower as a condition of the Sale.
(ii) In the case of a Refinancing, the reasonable and necessary costs of consummating such Refinancing, including, without limitation, loan fees, loan repayment charges, costs of title insurance premiums, escrow fees, recording fees, attorneys' fees and costs of Lender required repairs or reserves.
“CPI” means United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index of Urban Wage Earners and Clerical Workers, Subgroup “All Items,” for the Los Angeles-Riverside-Orange County area, 1982-84 = 100, or successor or equivalent index in case such index is no longer published. "Gross Revenues" shall mean all revenues and receipts of every kind actually received by Borrower from operating the Property, and all parts thereof, including, but not limited to, income from both cash and credit transactions, rental payments from leased and/or subleased spaces, governmental assistance housing payments or other operating subsidies, and parking fees and charges (but not including security deposits and other tenant deposits, except to the extent such deposits are forfeited to the Borrower under the tenant's lease). Gross Revenues does not include any insurance proceeds other than any rental interruption insurance proceeds. Any credit consideration shall be included in Gross Revenues at the time cash proceeds (principal, interest and/or other) are received. Borrower shall establish and maintain accounts for the Gross Revenues (the '"Project Accounts") that are segregated from revenues and income received by Borrower from all other projects.

Gross Revenues shall also include all interest earned on the Project Accounts to the extent interest is released from the Project Accounts. Gross Revenues do not include the proceeds of any loans or capital contributions made to Borrower, Refinancing Proceeds or Sale Proceeds.

EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
“Interest” shall mean that the NOTE shall bear simple interest at the rate of Three percent (3%) per annum, from the date of issuance of the Certificate of Completion. “Operating Expenses” shall mean the sum of the following:
(a) payments of principal and interest and all other charges payable on or with respect to the Senior Loan(s);
(b) a property management fee no greater than sixty-five dollars ($65)/per unit/per year, increased annually by the lesser of: (i) three percent (3%); or (ii) prior Year CPI, beginning the year following the issuance of the first certificate of occupancy for the Project;
(c) Partnership related fees that are actually incurred and are reasonable and customary to the partners of Borrower for similar projects in Southern California, and which may include: (i) the partnership management fee payable to the Administrative General Partner not to exceed seventeen thousand dollars ($17,000) per operating year and escalating at three percent (3%) per operating year; (ii) the partnership management fee payable to the Managing General Partner not to exceed three thousand five hundred dollars ($3,500) per operating year and escalating at three percent (3%) per operating year; and (iii) an investor asset management fee of seven thousand five hundred dollars ($7,500) per year, escalating at (A) three percent (3%) per operating year; (d) Deposits into required reserves required by any lender or Borrower’s Partnership Agreement;
(e) all other actual, reasonable cash operating costs and expenses, calculated on an annual basis, that are directly attributable to managing and operating the Property and the Borrower, including, without limiting the generality of the foregoing, the following: costs and expenses for real and personal property taxes, special assessments or similar charges; water, fuel, electricity and other utilities; heating, ventilation and air conditioning expenses; labor; supplies; tools; equipment; insurance; advertising and marketing; accounting and legal fees; brokerage commissions and other leasing expenses; reasonable reserves for all anticipated expenses as approved by the City; and other such items constituting operation, maintenance and repair costs actually paid by the Borrower, subject to the following conditions:
(i) Depreciation, amortization, and accrued principal and interest expenses on deferred payment debt and capital improvement expenditures shall not be considered Operating Expenses, except as otherwise provided herein. (f) Any expenses, compensation or fees paid to any affiliate of Borrower shall only be included as Operating Expenses to the extent they are not in excess of the reasonable expenses, compensation or fees which would be payable to unrelated third parties in arms-length transactions for similar services in the Santa Ana, California area;
(g) Any other expenses necessary to meet senior lender requirements EXHIBIT 5
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and requirements of Borrower’s limited partner, or its assignee, as set forth in Borrower’s Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”), including, without limitation, repayment of any loans to the Borrower by a partner or tax credit recapture or deficiency payments;
(h) Deferred developer fees; and
(i) A social services administrative fee;
Director reserves the right to at any time review and approve each or any annual budget during the Term hereof, and any changes to any said annual budget reasonably requested by Director shall be promptly implemented by Borrower. Notwithstanding the foregoing, in no event shall Operating Expenses include any costs, fees, fines, charges, penalties, awards, judgments or expenses (including, but not limited to legal and accounting fees and expenses) that are due to or arising out of the Borrower’s: (a) breach or default of this Loan, any Loan Document or any Senior Loan Document; (b) fraudulent acts or willful misconduct; or (c) breach or default under any other contract, lease or agreement pertaining to the Project.
"Project" shall mean the acquisition and construction of the Property by Borrower pursuant to the Loan Agreement.
"Property" shall mean the real property located at 2530 and 2534 Westminster Avenue, Santa Ana, California described in the City Deed of Trust. "Refinancing" shall mean changing the then existing financing on the Property by, without limitation, modifying final maturity date of the existing Senior Loan, increasing the stated maximum principal amount of the existing Senior Loan, paying off the existing Senior Loan in full and obtaining new Senior Loan.
"Refinancing Proceeds" shall be as set forth in Section 7 hereof. "Residual Receipts" shall mean the Gross Revenues from the Property, for each year, less deductions for Operating Expenses from the Property, applicable to each such year to the extent not already deducted as an Operating Expense. "Sale" shall mean any transfer, assignment, conveyance or lease (other than to a tenant for occupancy or a transaction set forth in Section 11.3 hereof) of the Property or any portion thereof, or any interest therein by the Borrower, and includes any transfer, assignment or sale of any partnership interest in the Borrower by an individual or entity which is a general partner in the Borrower, or any interest by any individual or entity which holds an interest in any such general partner in the Borrower, which brings the cumulative total of all such direct and indirect transfers, assignments and sales by a general partner during the term of this Note to more than forty-nine percent (49%) of the ownership interests in the Borrower, and any such transfer, assignment or sale of a direct or indirect general partnership interest thereafter. Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
utility companies of the kind customary in real estate development, nor transfers of Limited Partnership interests or transfers of General Partner interests caused by the removal of the General Partner pursuant to the terms of the Partnership Agreement. "Sale Proceeds" shall be as set forth in Section 8 hereof. "Senior Loan" shall mean the senior loan being made by Umpqua Bank, concurrent to the City Loan for payment of a portion of the Acquisition Costs, and shall include any subsequent loan that refinances the initial Senior Loan, and shall include any other loan recorded senior in priority to this City Loan "Term" the term for repayment of this Note shall mean fifty-five (55) years from the Certificate of Completion.

3. LOAN REPAYMENT.

Borrower shall make payments to the City as provided in Sections 5 (Residual Receipts), 7 (Refinancing Proceeds), 8 (Sale Proceeds) and 10 (Accelerated Loan Repayment).

4. OPERATING CAPITAL IMPROVEMENT LOAN.

If the replacement reserve account (“reserves”) is depleted due to unforeseen repairs and the General Partner(s) makes a loan to the Borrower, the reserves must be fully funded to the balance of the reserve prior to disbursement for such unforeseen repairs prior to repayment of said loan. Such loan shall be repaid with net cash flow prior to the Residual Receipt split. The outstanding loan balance will be reflected in the annual report.

5. ANNUAL LOAN REPAYMENT.

5.1. After any deferred developer fee has been paid, as set forth hereinabove, the Borrower shall thereafter make a loan payment to the City annually, in the amount of the lesser of the outstanding balance due under this Note, plus any accrued interest thereon, or the City’s Percentage of the Residual Receipts, as provided in this Section 5.

5.2. Within one hundred twenty (120) days after the year in which the construction of the Project is completed, and on or before the 120th day of each Calendar Year thereafter, the Borrower shall submit to the City a detailed statement of Gross Revenues and Operating Expenses attributable to the Property for the applicable Calendar Year, along with a computation of the amount of the Residual Receipts applicable to such Calendar Year with which to make a City Loan payment then due.

5.3. Except as otherwise provided in Section 4, the Borrower shall pay to the City the City’s Percentage of the Residual Receipts as payment of principal and interest under this Note. The remaining amount of the Residual Receipts shall remain with the Borrower to be used by Borrower in accordance with the terms of the Partnership Agreement, including, without limitation, for distribution to the partners of the Borrower.

EXHIBIT 5
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City Rental Rehabilitation Program Loan Note

5.4. The Residual Receipts payment shall be made not later than one hundred fifty (150) days after the close of the Calendar Year. Such payment shall be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City by Borrower pursuant to the terms of the Loan Documents; second to any accrued but unpaid interest, if any; and third, to reduce the principal balance of the City Loan. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of an Event of Default (as such term is defined in the Loan Agreement), all amounts received by City from any party shall be applied in such order as City, in its sole discretion, may elect.

6. RESERVED.

7. LOAN REPAYMENT FROM REFINANCING PROCEEDS.

The Borrower shall make a loan payment to the City from every approved Refinancing that occurs during the term of this Note not to exceed the outstanding balance of principal and interest on this Note, to the extent of the City’s Percentage (50%) of the Refinancing Proceeds (if any). If any of the other soft lenders request a share of refinancing proceeds, the City shall split the City’s Percentage (50%) of the Refinancing Proceeds on a pro rata basis with the other soft lender(s) that are requesting a share of the Refinancing Proceeds. The pro rata distribution shall be based on the initial principal balances of each respective soft loan of the soft lender(s) that are requesting a share of Refinancing Proceeds. If none of the other soft lenders request a share of the Refinancing Proceeds, the City shall receive the full 50% as the City’s Percentage. The Refinancing Proceeds shall be calculated as follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the amount necessary to pay in full all amounts owing on the Senior Loan; next, the Borrower shall pay to the City, the City’s Percentage of the then remaining unapplied Refinancing Proceeds not to exceed the outstanding balance on this Note. The remaining Refinancing Proceeds shall remain with Borrower to be used by Borrower as determined in accordance with the terms of the Partnership Agreement, including, without limitation, for distribution to the partners of the Borrower. Such payment shall be due within 30 days of the date of such Refinancing, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the City Loan. The City shall not be required to reconvey the lien of the City Deed of Trust if Refinancing Proceeds are insufficient to repay the City Loan in full.

8. LOAN REPAYMENT FROM SALE PROCEEDS.

The Borrower shall make a loan payment, not to exceed the outstanding balance of principal and interest on this Note, to the City from any approved Sale that occurs during the term of the City Loan, to the extent of the City’s Percentage (50%) of the Sale Proceeds, as follows. If any of the other soft lenders request a share of Sale Proceeds, the City shall split the City’s Percentage (50%) of the Sale Proceeds on a pro rata basis with the other soft lender(s) that are requesting a share of the Sale Proceeds. The pro rata distribution shall be based on the initial principal balances of each respective soft loan of the soft lender(s) that are requesting a share of Sale Proceeds. If none of the other soft lenders request a share of the Sale Proceeds, the City shall receive the full 50% as the City’s EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
Percentage. The Sale Proceeds shall be calculated as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full all amounts owing on the Senior Loan; next the Borrower shall pay to the City the City’s Percentage of the then remaining unapplied Sale Proceeds, not to exceed the outstanding amount of principal and interest due on this Note. The remaining Sale Proceeds shall remain with Borrower. Such payment shall be due on the date of such Sale, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the City Loan. The City shall not be required to reconvey the lien of the City Deed of Trust if Sale Proceeds are insufficient to repay the City Loan in full.

9. BUY OUT OPTION.

Prior to the initial disbursement under this Note, the Borrower shall grant to the City a right of first refusal (subject to any purchase option and/or right for first refusal granted to one or more of the General Partner(s) of the Borrower and any rights of the investor limited partner of Borrower under the Partnership Agreement) (the “City Right of First Refusal”) to acquire the Property if Borrower desires to transfer the Property to an entity that is not affiliated with one or more of Borrower’s general partners. The City Right of First Refusal shall be in form and substance acceptable to the City, shall comply with all applicable Tax Credit requirements and shall, at minimum, include that the purchase price will not be less than the amount of any bona fide third party offer received by Borrower. The City Right of First Refusal is hereby subordinated to the Senior Loan Deed of Trust and the other Senior Loan Documents, and in any event, the City Right of First Refusal shall automatically terminate, without any further action by Borrower, the City or any other party upon the initial disbursement under this Note. Senior Lender is hereby made a third party beneficiary of the immediately preceding sentence, and such sentence shall not be amended or deleted without Senior Lender’s prior written consent.

10. ACCELERATED LOAN PAYMENT.

The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following:
(a) Sale or Refinancing of the Property as provided further in Section 15 hereof; unless: (i) in the case of a Sale in which the City’s Percentage of the Sale Proceeds are insufficient to repay in full the City Loan, the City approves such sale and the purchaser assumes the balance of the City Loan in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the City’s Percentage of the Refinancing Proceeds are insufficient to repay in full the City Loan, the City approves such Refinancing and the Borrower remains obligated pursuant to the terms of this Note; (b) if an Event of Default occurs pursuant to Section 16 hereof; or (c) The date that is fifty-five (55) years after the date of execution of the Certificate of Completion.

EXHIBIT 5
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8 Westview House
City Rental Rehabilitation Program Loan Note

11. PREPAYMENT.

Borrower may prepay the outstanding principal balance under this Note, in whole or in part, together with any accrued but unpaid interest, if any, and other sums owed to the City under this Note, if any, at any time without penalty. In the event of prepayment by Borrower, the Loan Agreement (only with respect to any continuing obligations of Borrower that survive repayment in full of the loan) and the Affordability Restrictions on Transfer of Property shall remain intact, and shall be unaffected by the prepayment of this Note by the Borrower.

12. LAWFUL MONEY.

Principal and interest are payable in lawful money of the United States of America.

13. APPLICATION OF PAYMENTS; LATE CHARGES.
(a) Any payments received by the City pursuant to the terms hereof shall be applied first to sums, other than principal and interest, due the City pursuant to this Note, next to the payment of all interest accrued to the date of such payment, and the balance, if any, to the payment of principal.
(b) If any payment is not received by the City within thirty (30) days following the due date thereof, then in addition to the remedies conferred upon the City pursuant to this Note and the other Loan Documents: (i) a late charge of four percent (4%) of the amount due and unpaid will be added to the delinquent amount to compensate the City for the expense of handling the delinquency; and (ii) the amount due and unpaid, excluding the late charge, shall bear interest at twelve percent (12%) per annum, or the maximum amount allowed by law, whichever is less, computed from the date on which the amount was due and payable until paid. Without prejudice to the rights of the City hereunder or under any of the other Loan Documents, Borrower shall indemnify the City against, and shall pay the City on demand, any expense or loss which it may sustain or incur as a result of the failure by Borrower to pay when due any installment of interest and/or principal, fees, or other amounts payable to the City under this Note or any other Loan Document, to the extent that any such expense or loss is not recovered pursuant to such foregoing provisions. A certificate of the City setting forth the basis for the determination of the amounts necessary to indemnify the City in respect of such expenses or direct loss, submitted to Borrower by the City, shall be conclusive and binding for all purposes except as corrected by Borrower notice to City within ten (10) days of receipt of such certificate from City.

14. SECURITY.

This Note is secured by the City Deed of Trust.

15. ACCELERATION BY REASON OF TRANSFER OR FINANCING.

15.1. In order to induce City to make the City Loan evidenced hereby, Borrower EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
agrees that in the event of any transfer of the Property without the prior written consent of City (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the Senior Loan Deed of Trust), City shall have the absolute right at its option, upon at least 30 days’ prior written notice to Borrower, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. City may grant or deny such consent in its sole and absolute discretion and, if consent should be given, any such transfer shall be subject to this Section 15, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall release Borrower from all liability thereunder from and after the date of such assumption.

15.2. As used herein, "transfer" includes the Sale, agreement to sell, transfer or conveyance of the Property, 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 the lease of all or substantially all of the Property. 'Transfer' shall not include the leasing of individual residential units on the Property, so long as Borrower complies with the provisions of the Loan Agreement and the Affordable Housing Restrictions relating to such leasing activity, nor shall it include a conveyance of the Property to a limited partnership in which a general partner of Borrower or an affiliate of a general partner of Borrower is a general partner, or to a corporation that is wholly owned by the Borrower or a general partner of Borrower and that is formed for the sole purpose of owning and operating the Property, or the sale back to the Borrower. In the event of any Refinancing or partial Refinancing in an amount in excess of the balance of the Senior Loan, without the prior written consent of City (which consent City may grant or deny in its sole discretion), then the entire outstanding balance of the City Loan together with all accrued and unpaid interest, shall be repaid to the City at the time of each Refinancing or partial Refinancing.

15.3. For the avoidance of doubt, a "transfer” shall not include (i) a transfer of any general partner’s interest in Borrower when made in connection with the exercise by the Borrower’s limited partner (the "Limited Partner") of its rights upon a default by a general partner under the Borrower’s Partnership Agreement or upon a general partner’s withdrawal in violation of the Partnership Agreement, so long as the removal and substitution of the defaulting general partner is made within thirty (30) days of such default or, if such removal and substitution cannot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to remove and substitute the general partner with a reasonable period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the Property to the managing general partner of Borrower pursuant to the right of first refusal or to the general partners of Borrower pursuant to the purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner’s interest in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a limited partner of the Borrower.

16. EVENT OF DEFAULT.

EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
Subject to the provisions hereof, the occurrence of any of the following shall be deemed to be an event of default ("Event of Default'') hereunder: (a) failure by Borrower to make any payments provided for herein, and if such default is not made good within the earlier of fifteen (15) days of written notice to Borrower of such default or thirty (30) days after such payment was due; or (b) failure by Borrower to perform any covenant or agreement in the City Deed of Trust, the Loan Agreement, or the Affordability Restrictions on Transfer of Property within thirty (30) days after written demand therefor by City (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Borrower fail to promptly commence such cure, and diligently and continuously prosecute same to completion).

17. CURE BY LIMITED PARTNER.

The City acknowledges that the Limited Partner of Borrower shall have the right, but not the obligation to cure any default hereunder. Any cure made or tendered by such Limited Partner shall be accepted as if made by Borrower.

18. REMEDIES.

Upon the occurrence and during the continuance of an Event of Default, after any applicable notice has been provided and the expiration of any applicable cure period therefore, City may declare all sums evidenced hereby immediately due and payable by delivery to the Trustee named in the City Deed of Trust securing this Note, and to Borrower, written declaration of default and demand for sale, and written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and City may foreclose on the City Deed of Trust. City shall also deposit with Trustee the City Deed of Trust, this Note and all documents evidencing expenditures secured thereby and evidenced hereby. No delay or omission on the part of the City in exercising any right under this Note or under any of the other Loan Documents shall operate as a waiver of such right.

19. ATTORNEYS' FEES.

If this City Loan Note is not paid when due or if any Event of Default occurs, Borrower promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorneys' fees, whether or not any action or proceeding is brought to enforce the provisions hereof.

20. SEVERABILITY.

Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

21. CALCULATION OF INTEREST.

EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
Interest hereunder shall be calculated on the basis of a three hundred sixty (360) day year consisting of twelve (12) months of thirty (30) days each, except that interest due and payable for a period less than a full month shall be calculated by dividing (a) the product of (i) the actual number of days elapsed in such period, (ii) the outstanding principal balance hereunder during that period and (iii) the Note interest rate in effect hereunder during that period by (b) 360.

22. NUMBER AND GENDER.

In this Note the singular shall include the plural and the masculine shall include the feminine and neuter gender, and vice versa, if the context so requires.

23. NON-RECOURSE.

The City Loan is a nonrecourse obligation of the Borrower. Neither Borrower nor any other party, including Borrower’s partners, shall have any personal liability for repayment of the City Loan or for any other amounts under any of the documentation evidencing, securing or describing the City Loan. The sole recourse of City under this Note and the City Deed of Trust for repayment of the City Loan and for such other amounts arising therefrom shall be the exercise of its rights against the Property and related security thereunder.

24. SUBORDINATION.

Any agreement by the City to subordinate the City Deed of Trust and/or Regulatory Agreements to an encumbrance securing and/or evidencing Approved Financing (each such Approved Financing, a "Senior Loan"), will be subject to the satisfaction of each of the following conditions:

1. All of the proceeds of the proposed Senior Loan, less any transaction costs, are used to provide acquisition, construction and/or permanent financing for the Project, or any combination thereof;

2. The proposed lender of a Senior Loan (each a "Senior Lender") must be a state or federally chartered financial institution, a nonprofit corporation or a public entity that is not affiliated with Borrower;

3. Borrower demonstrates to the City's satisfaction that subordination of the City Deed of Trust and/or Affordability Restrictions on Transfer of Property is necessary to secure adequate acquisition, construction and/or permanent financing to ensure the viability of the Project, including the operation of the Project as affordable housing, as required by the Loan Documents. To satisfy this requirement, Borrower must provide to the City, in addition to any other information reasonably required by the City, evidence demonstrating that the proposed amount of the Senior Loan is necessary to provide adequate construction and/or permanent financing to ensure the viability of the Project, and adequate financing for the Project would not be available without the proposed subordination;
EXHIBIT 5
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City Rental Rehabilitation Program Loan Note

4. The subordination agreement(s) is structured to minimize the risk that the City Deed of Trust and/or Affordability Restrictions on Transfer of Property will be extinguished as a result of a foreclosure by the Senior Lender or other holder of the Senior Loan. To satisfy this requirement, the subordination agreement must provide the City with adequate rights to cure any defaults by Borrower, including:
(i) providing the City or its successor with copies of any notices of default at the same time and in the same manner as provided to Borrower; and (ii) providing the City with a cure period of at least sixty (60) days to cure any default;

5. The subordination(s) of the City Loan is effective only during the original term of the Senior Loan and any extension of its term that is approved in writing by the City;

6. No subordination may limit the effect of the City Deed of Trust and/or the Affordability Restrictions on Transfer of Property before a foreclosure, nor require the consent of the Senior Lender prior to the City exercising any remedies available to the City under the Loan Documents; and

7. Upon a determination by the City Executive Director that the conditions in this Section have been satisfied, the Executive Director or his/her designee, will be authorized to execute the approved subordination agreement without the necessity of any further action or approval by the City Council. Execution of any subordination agreement will evidence and constitute the determination of the City that all requirements of this Section have been satisfied or waived.

Notwithstanding anything to the contrary contained in the Loan Documents, with prior 30-days written notice to City, Borrower may refinance the Senior Loan with a nonprofit, commercial, governmental or institutional lender without the prior consent of the City (“Refinanced Senior Indebtedness”), and the City hereby agrees to subordinate the lien of its Deed of Trust (but not the Affordability Restrictions on Transfer of Property) to the Refinanced Senior Indebtedness and the lien of any deed of trust or mortgage securing the Refinanced Senior Indebtedness, provided that the principal balance of the Refinanced Senior Indebtedness does not exceed the then outstanding principal balance of the Senior Loan plus the costs incurred in securing the Refinanced Senior Indebtedness.

25. RESERVED.

26. RESERVED.

27. FORCE MAJEURE.

Notwithstanding specific provisions of this Note, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the City or any other public or governmental City or entity (except that any act or failure to act of City shall not excuse performance by City); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within thirty (30) days after the commencement of the cause. Times of performance under this Note may also be extended in writing by the City and the Borrower.

28. ASSIGNMENTS.

The City, and the assignee of the City, shall have the right to assign this Note and the City Deed of Trust securing this Note, without any further act of Borrower. The assignee shall give notice to Borrower as soon as practicable after such assignment. {signatures on following page}
EXHIBIT 5
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City Rental Rehabilitation Program Loan Note
This Note is hereby agreed to and executed on the date first set forth above. “BORROWER”
Westview House LP,
a California limited partnership
By: Westview House CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By: _________________________
Kyle Paine
Its: President
By: Westview Mercy House CHDO, LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By: _________________________
Lawrence G. Haynes, Jr.

Its: Chief Executive Officer
EXHIBIT 5
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Exhibit F:

Affordability
Restrictions on
Transfer of Property
EXHIBIT 5
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1 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council

SPACE ABOVE THIS LINE FOR RECORDING USE

FREE RECORDING REQUESTED
[Government Code Section 6103]

RENTAL REHABILITATION PROGRAM

AFFORDABILITY RESTRICTIONS

ON TRANSFER OF PROPERTY
(2530 & 2534 Westminster Avenue, Santa Ana, California)

THESE RENTAL REHABILITATION PROGRAM AFFORDABILITY
RESTRICTIONS ON TRANSFER OF PROPERTY (the “Restrictions”) are entered into as of May 26, 2022, by and between and Westview House LP, a California limited partnership (“Developer”), and the City of Santa Ana, a charter city and municipal corporation (“City”).

RECITALS:

A. Developer is the owner of that certain real property located at 2530 and 2534 Westminster Avenue (“Property”), located in the City of Santa Ana, more particularly described in Exhibit A, which is attached hereto and incorporated herein by this reference.

B. The Developer and the City have entered into that certain Rental Rehabilitation Program Loan Agreement, dated on or about the date hereof (“Loan Agreement”), for the purpose of providing eighty-four (84) units of housing that will be affordable to Extremely Low Income and Low Income households (“Restricted Units”), with one un-restricted unit reserved for an on-site manager, to which these Restrictions are attached as Exhibit F (any capitalized term that is not otherwise defined in these Restrictions shall have the meaning ascribed to such term in the Loan Agreement).

C. The Loan Agreement provides, among other things, for the use of the Property for affordable housing with all Restricted Units being restricted to Extremely Low Income and Low Income households, at Affordable Rent(s).

D. The Loan Agreement contains certain provisions relating to the use of the Property.

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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property

NOW, THEREFORE, CITY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS:

1. Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that Developer, such successors, and such assigns shall use the Property exclusively to provide affordable housing of Extremely Low Income and Low Income households, as provided in these Restrictions and in the Loan Agreement.

2. Developer, for itself and its successors and assigns, hereby covenants and agrees that all of the apartments in the Property (less one manager’s unit) (the “Units”) shall be rented exclusively, at Affordable Rent, to Extremely Low Income and Low Income households to the extent provided for herein. Area median income levels and Affordable Rents are subject to adjustment from time to time as provided in Section 3 below.

3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF

THE PROPERTY

3.1. Use Covenants and Restrictions.
(a) The Project shall consist of eighty-five (85) units, including one (1) on-site manager’s unit. Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property that Developer will make all Restricted Units on the Property available to Extremely Low Income households and Low Income households at rents affordable to such households for fifty-five (55) years from the issuance of the Certificate of Completion. The City permits the Developer to limit the eligibility and/or give preference to a particular segment of the population in accordance with applicable state and federal laws. (b) At initial lease up, households in the Restricted Units cannot earn more than the Extremely Low Income limits and the Low Income limits as published by HUD for the Orange County, California PMSA, adjusted for household size. Rental increases shall be in conformance with federal and state law. (c) The rents for the Restricted Units must not exceed the applicable rents for the 30% Income Level for the Extremely Low Income Units and the 60% Income Level for the Low Income Units as published by the California Tax Credit Allocation Committee (TCAC).
(d) Twenty-six (26) Extremely Low Income Units, consisting of twenty-three (23) one-bedroom units and three (3) two-bedroom units, shall be designated as permanent supportive housing units for persons experiencing chronic homelessness (PSH Units).
(e) Maximum Occupancy will be two (2) people per room plus one (1).

Example for a two-bedroom unit, five (5) people would be maximum occupancy. (f) Developer must have a written lease between tenant and owner for EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property a period of at least one year, unless a shorter period is mutually agreed upon. Leases must be consistent with Section 7.

3.2. Affordability Levels/Unit Mix:

The affordability levels/unit mix for the Restricted Units in the Project are as follows:

Unit Size
30% TCAC AMI 60% TCAC AMI
No. Total
Units
Current
Rent
No.

Units
Current
Rent
1 Bedroom 23 $756 23
2 Bedroom 3 $908 3
3 Bedroom 21 $1,049 13 $2,098 34
4 Bedroom 16 $1,170 8 $2,341 24
Total 63 21 84
The remaining unit will be an un-restricted 2-bedroom unit reserved for the onsite manager. (1) Annually with the financial statements, the Developer shall provide an annual report of rents and occupancy of all Restricted Unitsto verify compliance with affordability requirements
The affordable rents charged at the Project for the Restricted Units must comply with the more stringent of the standards set forth by TCAC and the requirements of Section 6(b) of the CSCDA Regulatory Agreement, as defined in Section 24 hereof..

A utility allowance must be deducted from the maximum affordable rent charged at the Project for each Restricted Unit.

Initial rents may be recalculated to allowable rental amounts at the time of initial lease-up following completion of construction in accordance with any changes in allowable rent and income tables as published by HUD and TCAC.

3.3. Rent Increases.

On an annual basis, the City shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by HUD and TCAC. In no event can Developer charge any tenant more than such amount.

All rent increases on the Restricted Units are subject to City approval pursuant to the terms of this Section. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the City a schedule of any proposed increase in the rent. The City will disapprove a rent increase if it does not comply with the restrictions set forth in Section 3.2 above.
(a) Termination of Tenancy. Developer may not terminate the tenancy EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property or refuse to renew the lease of tenant except for serious or repeated violation of the terms and conditions of the Lease; for violation of applicable federal, state, or local law; for completion of the transitional housing tenancy period (if the housing is transitional); or for other good cause. Any termination or refusal to renew must be preceded by not less than thirty (30) days by the Developer’s service upon the tenant of a written notice specifying the grounds for the action.
(b) Non-Qualifying Adjusted Income. Subject to the applicable requirements and provisions of, and changes to, Section 42 and 142(d) of the Internal Revenue Code of 1986, as amended (the “Code”), if, upon recertification of the income of a tenant of a Restricted Unit, the Developer determines that a tenant has an adjusted income exceeding 30% of the applicable Median Income for the Area or 60% of the applicable Median Income for the Area, as applicable, in each case, adjusted for household size as provided in Section 3.2 above, such tenant may be permitted to continue to occupy the Restricted Unit at the rental rate as provided for in Section 3.2 above, until the tenant chooses to vacate the Restricted Unit. After the Restricted Unit is vacated, the Restricted Unit shall be re-rented to a tenant pursuant to the terms, covenants and conditions of these Restrictions.

3.4. Loss of Project-Based Voucher Subsidy.

It is anticipated that during the Term of Agreement the Project will maintain not less than 26 Project-Based Voucher (“PBV”) Restricted Units (“PBV Restricted Units”), supported by Project-Based Section 8 rental subsidy payments ("Rental Subsidy"). If, during the Term of Agreement, there is a reduction, termination or nonrenewal of the Rental Subsidy through no fault of Developer, such that the Rental Subsidy shown on the Project Budget is no longer available (or available in a lesser amount), Developer may request approval of the City (a) to remove the PSH designation for one or more of the twenty-six (26) PSH Units, (b) to allow households with adjusted incomes that do not exceed sixty percent (60%) of AMI, adjusted for actual household size, to occupy the extremely-low income units (i.e., a unit previously restricted to households with adjusted incomes that do not exceed 30% of AMI), and (c) to increase the rent on one or more of the PBV Restricted Units, to rents that are affordable to households with an adjusted income that does not exceed sixty percent (60%) of AMI, adjusted for household size appropriate for the PBV Restricted Unit.

Any requested removal of the PSH Unit designation and/or any requested rent increase is subject to the following requirements: (a) concurrently with the request, Developer shall provide the City with evidence of the anticipated reduction, termination, or nonrenewal of the Rental Subsidy; (b) a Management Plan (as defined in Section 6.1(d) of the Loan Agreement) for the Project for the City’s approval pursuant to Sections 6.1(d) and Exhibit G of the Loan Agreement, showing the impact of the loss or reduction of the Rental Subsidy; (c) a proposed operating budget reflecting the rent increases (the “Operating Budget”); and (d) a description of efforts to obtain alternate sources of rent. The number of PBV Restricted Units subject to the rent increase and the amount of the proposed increase may not be greater than the number or amount required to ensure that the Project generates sufficient income to cover its operating costs, required deposits to replacement EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property reserves, and debt service on approved financing as shown on the Operating Budget, and as is necessary to maintain the financial stability of the Project. In addition, upon a reduction, termination or nonrenewal of the Rental Subsidy as described above, Developer hereby agrees to the following:
(a) Developer shall use good faith commercially reasonable efforts to obtain alternative sources of rental subsidies and shall provide the City with annual progress reports on efforts to obtain alternative sources of rental subsidies that would allow the rents to be reduced. Upon receipt of any alternative rental subsidies, Developer shall reduce the rents back to the original restrictions to the extent that the alternative rental subsidies provide sufficient income to cover the operating costs, required replacement reserves and debt service of the Project as shown on the Operating Budget. (b) Developer shall provide tenants in the PBV Restricted Units with notice of any rent increase pursuant to this Section 3.4, and shall notify the tenant that if they have received a tenant-based voucher from the Housing Authority of the City of Santa Ana they may use the tenant-based voucher for their PBV Restricted Unit. (c) All rent increases for the PBV Restricted Units are subject to City approval pursuant to the terms of this Section 3.4. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to the City a schedule of any proposed increase in the rent. The City will disapprove a rent increase if it does not comply with the restrictions set forth in this Section 3.4. Notwithstanding the foregoing, rent increases for the PBV Restricted Units shall be subject to review and approval of the City.

Developer shall give tenants of all PBV Restricted Units written notice at least sixty (60) days prior to any rent increase.

3.5. Reserved.

4. Developer, its successors and assigns shall not charge rents for the Restricted Units in excess of the amounts set forth herein, as adjusted on the basis of the revised schedules of area median incomes issued from time-to-time by HUD. The City shall notify Developer in writing of the adjusted allowable maximum incomes and rents.

5. Developer shall adopt and include as part of its Management Plan (described in Section 11 below), written tenant selection policies and criteria for the Restricted Units that meet the following requirements:

5.1. Are consistent with the purpose of providing housing for Extremely Low and Low Income households;

5.2. Are reasonably related to program eligibility and the applicants’ ability to perform the obligations of the lease;

5.3. Give reasonable consideration to the housing needs of households that EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property would have a preference under 42 CFR §906.211 (Federal selection preferences for admission to Public Housing);

5.4. Provide for:
(a) The selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and (b) The prompt written notification to any rejected applicant of the grounds for any rejection;

5.5. Subject to compliance with applicable California and federal fair housing laws and Section 142(d) and Section 42 of the Code, local preference for Santa Ana residents and workers in tenant selection shall be a requirement of the Project. Subject to applicable laws and Section 142(d) and Section 42 of the Code and regulations governing nondiscrimination and preferences in housing occupancy required by HUD or the State of California, as well as the City of Santa Ana Affordable Housing Funds Policies and Procedures, the Developer shall give preference in leasing units in the following order of priority:
(a) First priority shall be given to persons who have been permanently displaced or face permanent displacement from housing in Santa Ana as a result of any of the following:
(i) A redevelopment project undertaken pursuant to
California’s Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) -- applicable only to projects funded by the Low and Moderate Income Housing Asset Fund;
(ii) Ellis Act, owner-occupancy, or removal permit eviction; (iii) Earthquake, fire, flood, or other natural disaster; (iv) Cancellation of a Housing Choice Voucher HAP Contract by property owner; or
(v) Governmental Action, such as Code Enforcement.
(b) Second priority shall be given to persons who are either:
(i) Residents of Santa Ana; and/or
(ii) Working in Santa Ana at least 32 hours per week for at least the last 6 months.

The Restricted Units will still be available to the general public, as required under Section 142(d) of the Code and Section 42 of the Code, and these preferences do not restrict the availability of the units to the general public.

5.6. Carry out the Affirmative Marketing procedures of the City of Santa Ana, which are designed to provide information and otherwise attract eligible persons from all racial, ethnic and gender groups in the housing market area to the units. .

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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property

6. Developer, its successors and assigns, shall not refuse to lease a unit to a holder of a rental voucher under 24 CFR part 982 (Housing Choice Voucher Program) or to a holder of a comparable document evidencing participation in a federally funded tenant-based assistance program because of the status of the prospective tenant as a holder of such certificate of family participation, rental voucher, or comparable tenant-based assistance document. Total rents charged to the tenant for the tenant’s share of rent shall not exceed the allowable rents as described above.

7. Any lease of any of the units must be for not less than one year, unless by mutual agreement between the tenant and the Developer. Should the tenant and Developer agree to a term of less than one year, said agreement shall be expressed in some type of written form, signed by the tenant, and maintained in the tenant’s rental file held by the Developer.

The lease may not contain any of the following provisions (in which references to “owner” shall mean the Developer, its successors or assigns):

7.1. Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of the owner in a lawsuit brought in connection with the lease;

7.2. Agreement by the tenant that the owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing Unit after the tenant has moved out of the Unit. The owner may dispose of this personal property in accordance with state law;

7.3. Agreement by the tenant not to hold the owner or the owner’s agent legally responsible for any action or failure to act, whether intentional or negligent;

7.4. Agreement of the tenant that the owner may institute a lawsuit without notice to the tenant;

7.5. Agreement by the tenant that the owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties;

7.6. Agreement by the tenant to waive any right to a trial by jury;

7.7. Agreement by the tenant to waive the tenant’s right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and

7.8. Agreement by the tenant to pay attorney’s fees or other legal costs even if the tenant wins in a court proceeding by the owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses.

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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property

8. Developer, its successors or assigns, must adhere to state law requirements with regard to termination of tenancy.

9. Developer shall maintain the improvements on the Property in compliance with all applicable housing quality standards [24CFR 92.504 (c)(6)] and state and local code requirements (California Health and Safety Code section 33418), and shall keep the Property free from any unreasonable accumulation of debris or waste materials. Developer shall also maintain in a healthy condition any landscaping planted on the Property.

10. Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, mental or physical disability, marital status, national origin or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property, as required by the Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations.

11. Not later than fifteen (15) business days prior to the Close of Escrow, Developer shall submit to the Executive Director a Management Plan in a form that is acceptable to the Executive Director, including, but not limited to, the components listed below.

Approval of the Management Plan must be obtained from the Executive Director not later than the time for the Close of Escrow. Developer shall manage the Restricted Units in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by the Executive Director, for the term of the income and rent restrictions contained in these Restrictions. The components of the Management Plan shall include:

11.1. Management Agent. Developer shall submit the name and qualifications of the proposed Management Agent. The Executive Director shall approve or disapprove the proposed Management Agent in writing based on the experience and qualifications of the Management Agent.

11.2. Management Agreement. Developer shall submit a copy of the proposed management agreement specifying the amount of the management fee, and the relationship and division of responsibilities between Developer and Management Agent.

11.3. Annual Budget and Projected Cash Flows. Prior to the Closing, and annually thereafter not later than seventy-five (75) days after the close of each calendar year thereafter until the Loan is repaid in full, Developer shall submit a projected operating budget and cash flow to the Executive Director. The budget and cash flow shall be in a form that is acceptable to the Executive Director.

11.4. Tenant Selection Policies. Developer shall include in the Management EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property Plan the tenant selection policies in accordance with Section 5, above.

12. If at any time the City determines that the units are not being managed or maintained in accordance with the approved Management Plan, the City shall send the Developer a detailed description of the management deficiencies (a “Deficiency Notice”).

If the deficiencies set forth in the Deficiency Notice are not cured within sixty (60) days (or such longer period as may be reasonably required to cure the deficiency), the Executive Director may require Developer to change management practices or to terminate the management contract and designate and retain a different management agent. The management agreement shall provide that it is subject to termination by Developer without penalty, upon thirty (30) days prior written notice, at the direction of the Executive Director upon failure to cure a Deficiency Notice within the time period specified above. Within thirty (30) days following a direction of the Executive Director to replace the management agent in accordance with the terms hereof, the Developer shall select another management agent or make other arrangements satisfactory to the Executive Director or designee for continuing management of the units.

12.1. Marketing Plan. The marketing plan will apply to all of the units in the Project, except the one manager’s unit. The Developer shall submit a marketing plan for review and approval by the Executive Director which approval will not be unreasonably withheld, conditioned or delayed. The marketing plan must contain procedures that ensure marketing of the Restricted Units to Extremely Low Income and Low Income households throughout the City. Such procedures shall be applicable for initial rent-up and ongoing marketing of the units throughout the term of these Restrictions. Developer shall advertise vacancies of the Restricted Units in general distribution newspapers that circulate throughout the City. Where the Developer utilizes other forms of advertising, such advertising shall also be distributed throughout the City.

13. The covenants established in these Restrictions and any amendments hereto approved by the City and Developer shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City and their respective successors and assigns. These Restrictions shall remain in effect for fifty-five (55) years from the issuance of the Certificate of Completion. In its discretion, the City may defer repayment of the Loan or the City may agree to such reasonable modifications to the requirements of these Restrictions, as they may determine are necessary for the continued maintenance and operation of the Restricted Units. The covenants against discrimination shall remain in effect for the period of these Restrictions.

14. Developer shall not request disbursement of Rental Rehabilitation Program funds until the funds are needed to pay eligible costs. The City shall have the right to disapprove any request if the City determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the Loan Agreement and these Restrictions [24 CFR 92.504 (c)(10)].

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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property

15. Maintenance; Compliance with Law.

During the term of these Restrictions, Developer agrees to maintain all interior and exterior improvements, including landscaping, on the Project in good condition, repair and sanitary condition (and, as to landscaping, in a healthy condition) and in accordance with any Management Plan approved by the City under these Restrictions (including without limitation any landscaping and signage), as the same may be amended from time to time, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Developer acknowledges the great emphasis the City places on quality maintenance to protect its investment and to provide quality low income housing for its constituents and to ensure that all City subsidized affordable housing projects within the City are not allowed to deteriorate due to deficient maintenance. In addition, Developer shall keep the Project free from all graffiti and any accumulation of debris or waste material. Developer shall promptly make all repairs and replacements necessary to keep the Project in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials.

In the event that Developer breaches any of the covenants contained in this Section 15 and such default continues for a period of five (5) days after written notice from the City (with respect to graffiti, debris, waste material, and general maintenance) or thirty (30) days after written notice from the City (with respect to landscaping and building improvements), then the City, in addition to whatever other right or remedy it may have under the Loan Agreement, the other Loan Documents, these Restrictions or at law or in equity, shall have the right to enter upon the Project and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City shall be permitted (but is not required) to enter upon the Project and perform all acts and work necessary to protect, maintain and preserve the improvements and landscaped areas on the Project. Developer shall promptly pay to the City, as applicable, the amount of the expenditure arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, including a fifteen percent (15%) administrative charge.

16. Developer shall prepare, maintain and submit to the City, as appropriate, the following records and reports in compliance with 24 CFR 92.504 (c)(12):

16.1. Annual Reports. Developer shall file with the City an Annual Report (herein referred to as the “Annual Report”) by June 15th of each calendar year, commencing with the end of the calendar year (or portion thereof) in which the Real Estate Closing occurs. The Annual Report shall contain a certification by Developer as to such information as the City Executive Director may then require, including, but not limited to, the following:
(a) The fiscal condition of the Project, including the Annual Budget and Project Cash Flow report required by Section 11.3 which shall include a financial statement for the previous calendar year that includes a balance sheet and a profit and loss statement EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property indicating any surplus or deficit in operating accounts; a detailed itemized listing of income and expenses; and the amounts of any fiscal reserves. Such Annual Budget and financial statement shall be prepared in accordance with generally accepted accounting practices.

The City Executive Director may require that the financial statement be audited at Developer’s expense by an independent certified public accountant acceptable to the Executive Director.
(b) Any substantial physical defects in the Project, including a description of any major repair or maintenance work undertaken or needed in the previous and current years. Such statement shall describe what steps Developer has taken in order to maintain the Project in a safe and sanitary condition in accordance with applicable housing and building codes and the property standards set forth in 24 CFR 92.251. (c) The occupancy of the units indicating the income of each current resident and the current rents charged each resident and whether those rents include utilities, including records that demonstrate that the Project meets the requirements of 24 CFR 92.253 for tenant and participant protection and these Restrictions. (d) General management performance, including tenant relations and other relevant information.
(e) Records that demonstrate that the units meet the affordability requirements of 24 CFR 92.252, for the required period of affordability. (f) Evidence of a currently paid hazard insurance policy in accordance with the requirements of Section 3 of the City/Rental Rehabilitation Program Deed of Trust, with a loss payable endorsement naming the City as a loss payee(s) together with other approved lenders (as their interests may appear), with a “Replacement Cost Endorsement” in amount sufficient to prevent Developer or City from becoming a coinsurer 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 the Executive Director.
(g) Evidence of a currently paid liability insurance policy, naming the City as additional insured and in a form approved by the City Attorney with coverage as described in the Loan Agreement.
(h) Termite reports pertaining to the Property every fifth (5th) year. (i) Such other information as may be reasonably required by the Executive Director or his/her designee.

16.2. Records and Audits. Developer shall maintain the following general program records, and make them available for inspection by the City, the State or HUD:
(a) records which demonstrate that the project meets the property standard specified in 24 CFR 92.251;
EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property (b) records which demonstrates that the project meets the requirements of 24 CFR 92.252;
(c) records which demonstrate compliance with the tenant and participant protections, as specified in 24 Section 29.253; (d) records which demonstrate compliance with the Equal Opportunity and Fair Housing requirements outlined in these Restrictions. (i) Intentionally omitted;
(ii) documentation of actions undertaken to meet the equal opportunity requirements of 24 CFR 92.350, which implements Section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u);
(iii) documentation and data on the steps taken to implement Developer’s outreach programs to minority-owned and women-owned businesses to meet the minority outreach requirements of 24 CFR 92.350;
(e) documentation of the steps taken to carry out an affirmative marketing program in accordance with 24 CFR 92.351, if applicable; (f) if applicable, records which demonstrate compliance with the requirements relating to relocation of displaced persons, as described in 24 CFR 92.353.

At a minimum, these shall include project occupancy lists identifying the name and address of all persons occupying the project property up until the date of the Real Estate Closing (i.e., the date on which Developer obtained site control); (g) if applicable, records concerning lead-based paint in accordance with 24 CFR 92.355;
(h) if applicable, records which support any requests for waivers of the conflict of interest prohibition as stated in 24 CFR 92.356; (i) records of certifications of contractor qualifications as they relate to the debarment and suspension requirement as stated in 24 CFR 92.357 and 24 CFR Part 24; and
(j) any other reports issued by other monitoring agencies.

16.3. All records pertaining to each calendar year of Rental Rehabilitation Program funds must be retained for the most recent five year period, except that records of individual tenant income verifications, project rents and project inspections must be retained for the most recent five year period, until five years after the affordability period terminates (24 CFR 92.508). Developer shall cooperate with the City to retain all books and records relevant to the Loan Agreement for a minimum of five years after the expiration of the Loan Agreement and any and all amendments hereto, or for five years after the conclusion or resolution of any and all audits or litigation relevant to the Loan EXHIBIT 5
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City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property Agreement, whichever is later. The City, the State, the Office of the Auditor General of HUD, and/or their representatives shall have unrestricted reasonable access to all locations, books, and records for the purpose of monitoring, auditing, or otherwise examining said locations, books, and records with or without prior notice.

16.4. If so directed by the City, the State or HUD upon termination of the Loan Agreement, Developer shall cause all records, accounts, documentation and all other materials relevant to the work to be delivered to the City, the State or HUD, as depository.

16.5. All records, accounts, documentation and other materials relevant to the Project shall be accessible at any time to the authorized representatives of the City, the State or HUD, on reasonable prior notice, for the purpose of examination or audit.

16.6. Pursuant to 24 CFR Part 44, the City shall perform an annual audit at the close of each calendar year in which these Restrictions are in effect. Developer shall reasonably cooperate with City in performing such audit.

17. If an event of default occurs under the terms of these Restrictions, prior to exercising any remedies hereunder, City shall give Developer written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Developer shall have such period to effect a cure prior to exercise of remedies by the City under these Restrictions. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Developer: (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 Developer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. Any cure made or tendered by such limited partner shall be accepted as if made by Developer.

The City is a beneficiary of the terms and provisions of these Restrictions and the covenants herein, both for and in their own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit these Restrictions and the covenants running with the land have been provided. Upon the occurrence of an event of default and the expiration of the notice and cure period specified above, the City shall have the right to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which they or any other beneficiaries of these Restrictions and covenants are entitled.

18. Default.

Each of the following shall constitute an "Event of Default" by Developer under these Restrictions:

18.1. Failure to Make Payments. Developer fails to make any payment due the City under these Restrictions within thirty (30) days after receiving written notice for said payment from the City;
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18.2. Non-Monetary Failure to Perform. Developer fails to timely perform, comply with or observe any of the terms, covenants, or conditions of these Restrictions (other than those provisions elsewhere referred to in this Section 18) and such failure continues uncured or without Developer commencing to diligently cure for thirty (30) days after notice thereof in writing is given by the City to Developer, provided that if Developer has commenced cure but cannot complete such cure reasonably within thirty (30) days, Developer shall have ninety (90) days from the date of notice to cure such failure without such failure constituting an event of default;

18.3. Senior Loan Document Breach. Any default or breach of Developer which continues uncured after the expiration of any applicable cure period under the Loan Agreement (including, but not limited to, the obligations of the Developer under Section 6 of the Loan Agreement), any Loan Document or any other loan document including, but not limited to, the Senior Loan Documents, as defined and set forth in the Loan Agreement;

18.4. Voluntary Suspension. The voluntary suspension of Developer's business or the dissolution or termination of the partnership (if any) constituting Developer;

18.5. Unauthorized Transfer. Developer’s sale or other transfer of the Project in violation of this Agreement;

18.6. Fraud or Material Misstatement or Omissions. Any fraudulent act or intentional material omission of Developer pertaining to or made in connection with the Loan, Loan Documents or the Project that is not cured within thirty (30) days after written notice to Developer, unless such act or omission is not capable of cure;

18.7. Insolvency. A court having jurisdiction shall have made or entered any decree or order: (i) adjudging Developer to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking reorganization of Developer or seeking any arrangement for Developer under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of Developer in bankruptcy or insolvency or for any of their properties; or (iv) directing the winding up or liquidation of Developer, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days, unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such lesser time period will apply under this section as well; or Developer shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note; or

18.8. Project Monies. Developer’s intentional misapplication or embezzlement of Project monies.

19. Reserved.

EXHIBIT 5
City Council 39 – 452 5/17/2022
15 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property

20. Remedies.

The occurrence of any Event of Default shall, either at the option of the City or automatically where so specified, relieve the City of any obligation to make or continue the Loan and shall give the City the right to proceed with any and all remedies set forth in these Restrictions or otherwise available at law or in equity or by statute (and all of the City's rights and remedies shall be cumulative), including but not limited to the following:

20.1. Acceleration of Note. The City shall have the right to cause all indebtedness of the Developer to the City under the Note, together with any accrued interest thereon, to become immediately due and payable. The Developer waives all right to presentment, demand, protest or notice of protest, or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured party under the law, including the Uniform Commercial Code, including foreclosure under the Deed of Trust. The Developer shall be liable to pay the City on demand all expenses, costs and fees (including, without limitation, reasonable attorneys' fees and expenses) paid or incurred by the City in connection with the enforcement of this provision, provided that such expenses, costs and fees shall be subordinate to the Senior Loan made to Developer and the Senior Loan Documents.

20.2. Specific Performance. The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Developer to perform its obligations and covenants under these Restrictions or to enjoin acts on things, which may be unlawful, or in violation of the provisions of these Restrictions. The Developer shall be liable to pay the City on demand all expenses, costs and fees (including, without limitation, reasonable attorneys’ fees and expenses) paid or incurred by the City in connection with the enforcement of these Restrictions.

20.3. Right to Cure at Developer's Expense. The City shall have the right to cure any monetary Event of Default by Developer under these Restrictions. The Developer agrees to reimburse the City for any funds advanced by the City to cure a monetary default by Developer upon demand therefore, together with interest thereon at the rate of twelve percent (12%) per annum or the maximum rate permitted by law, whichever rate is lesser, from the date of expenditure until the date of reimbursement.

20.4. Remedies Cumulative. No right, power, or remedy given to the City by the terms of these Restrictions is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Developer and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.

20.5. Waiver of Terms and Conditions. No waiver of any default or breach by Developer hereunder shall be implied from any omission by the City to take action on EXHIBIT 5
City Council 39 – 453 5/17/2022
16 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. The consent or approval by the City to or of any act by Developer requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under these Restrictions or the Loan Documents, nor shall it invalidate any act done pursuant to notice of default, or prejudice the City in the exercise of any right, power, or remedy hereunder or under the Loan Documents, unless in the exercise of any such right, power, or remedy all obligations of Developer to City are paid and discharged in full.

21. The covenants and agreements contained herein shall run with the land and not be personal obligations of Developer. Upon the sale, conveyance or other transfer of the Property (a “Transfer”) and the assumption of the obligations hereunder by a transferee, Developer’s liability for performance shall be terminated as to any obligation to be performed hereunder after the date of such Transfer.

22. The Loan Agreement and all of its attachments shall be enforceable by City in accordance with the terms thereof. Each of the Loan Agreement, the Affordability Restrictions on Transfer of Property, the City/Rental Rehabilitation Program Loan Note and the City/Rental Rehabilitation Program Deed of Trust provide a means of enforcement by the City if Developer is in breach of its obligations hereunder and thereunder, including liens on the Property, use and deed restrictions and covenants running with the land [24 CFR 92.504 (c) (13)].

23. Additional Terms.

23.1. Indemnity. To the fullest extent permitted by law, the Developer agrees to indemnify, hold harmless and defend the City and its elected officials, officers, governing members, employees, attorneys and agents (collectively, the "Indemnified Parties"), from and against any and all losses, damages, claims, actions, liabilities, costs and expenses of any and every conceivable nature, kind or character (including, without limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject to under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to:
(a) these Restrictions or the execution or amendment thereof in connection with the transactions contemplated thereby;
(b) Developer’s ownership or operation of the Property and the Project or any act or omission of the Developer or any of its agents, contractors, servants, employees or licensees in connection with the Property and the Project, the operation of the Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, EXHIBIT 5
City Council 39 – 454 5/17/2022
17 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property installation, operation or rehabilitation of, the Project or any part thereof; (c) any lien or charge upon payments by the Developer to the City, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the City in respect of any portion of the Project; (d) any violation of any environmental law, rule or regulation with respect to, or the release of any toxic substance from, the Property or the Project or any part thereof; or
(e) any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact by the Developer contained in any Loan Document or any of the documents or instruments relating to said Loan Documents that the City relied upon in making the Loan; except to the extent such damages are caused by the gross negligence or willful misconduct of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Developer, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment and payment for of counsel selected by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement.

23.2. Time. Time is of the essence in these Restrictions.

23.3. Construction. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, associations, partnerships and corporations, and words of either gender shall include the other gender.

23.4. Waiver of Jury Trial. Unless prohibited by Federal, State or local laws, each party to these Restrictions hereby expressly waives any right to trial by jury of any claim, demand, action or cause of action arising under any Loan Document or in any way connected with or related or incidental to the dealings of the parties hereto or any of them with respect to any Loan Document, or the transactions related thereto, in each case whether now existing or hereafter arising, and whether sounding in contract or tort or otherwise; and each party hereby agrees and consents that any such claim, demand, action or cause of action shall be decided by court trial without a jury, and that any party to these Restrictions may file an original counterpart or a copy of this section with any court as written evidence of the consent of the parties hereto to the waiver of their right to trial by jury.

23.5. Nonliability. By accepting or approving anything required to be performed or given to City under these Restrictions, City shall not be deemed to have warranted or represented the sufficiency or legal effect of the same, and no such acceptance or approval shall constitute a warranty or representation by City to anyone.

23.6. Obligations Unconditional and Independent. Notwithstanding the existence EXHIBIT 5
City Council 39 – 455 5/17/2022
18 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property at any time of any obligation or liability of City to Developer, or any claim by Developer against City, in connection with these Restrictions or otherwise, Developer hereby waives any right it might otherwise have: (a) to offset any such obligation, liability or claim against Developer’s obligations under these Restrictions; or (b) to claim that the existence of any such obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under these Restrictions.

24. CSCDA Regulatory Agreement. The parties hereto acknowledge that the Developer and California Statewide Communities Development Authority are entering into that certain Regulatory Agreement and Declaration of Restrictive Covenants (the “CSCDA Regulatory Agreement”) with respect to the Property and the issuance of taxexempt financing and further agree that as long as the CSCDA Regulatory Agreement is in effect, to the extent of any conflicting provisions between the CSCDA Regulatory Agreement and the Restrictions, the CSCDA Regulatory Agreement shall control. That notwithstanding, the fact that the Restrictions and the CSCDA Regulatory Agreement provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed.

25. Notices. All notices, demands, approvals and other communications provided for in the Loan Documents shall be in writing and be delivered to the appropriate party by personal service or U.S. mail at its address as follows:

If to Developer: Westview House LP
c/o Westview House CDP LLC
3416 Via Oporto, Suite 301
Newport Beach, CA 92663
Attn: Kyle Paine
With a copy to: Westview House Mercy House CHDO LLC
807 N. Garfield Street
Santa Ana, CA 92701
Attn: Lawrence G. Haynes, Jr.

And: Sabelhaus & Strain, LLP
1724 10th Street, Suite 110
Sacramento, CA 95811
Attn: Stephen A. Strain, Esq.

And: Chernove and Associates, Inc.
16027 Ventura Boulevard #660
Encino, CA 91436
Attn: Sheldon Chernove, Esq.

And: R4 WHCA Acquisition LP
c/o R4 Capital LLC
780 Third Avenue, 16th Floor
EXHIBIT 5
City Council 39 – 456 5/17/2022
19 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property New York, New York 10017
Attention: Marc Schnitzer
E-Mail: [email protected]
And: Frost Brown Todd LLC
400 West Market Street, Suite 3200
Louisville, Kentucky 40202
Attention: Amy Curry
If to City: City of Santa Ana
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P .0. Box 1988
Santa Ana, California 92702
With a copy to: City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor (M-29)
Santa Ana, California 92702
Addresses for notice may be changed as required by written notice to all other parties. All notices personally served shall be effective when actually received. All notices mailed shall be effective three (3) days after deposit in the U.S. Mail, postage prepaid. The foregoing notwithstanding, the non-receipt of any notice as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such notice.
{signatures on following page}
EXHIBIT 5
City Council 39 – 457 5/17/2022
20 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property IN WITNESS WHEREOF, the parties hereto have caused these Affordability Restrictions on Transfer of Property to be executed on the date set forth hereinabove.

ATTEST: CITY OF SANTA ANA
___________________________ _______________________
Daisy Gomez Kristine Ridge
Clerk of the Council City Manager
Dated: Dated:

APPROVED AS TO FORM:

SONIA R. CARVALHO, City Attorney
By: ________________________
Ryan O. Hodge
Assistant City Attorney
Dated:

RECOMMENDED FOR APPROVAL:
_______________________________
Steven A. Mendoza
Executive Director
Community Development Agency
EXHIBIT 5
City Council 39 – 458 5/17/2022
21 Westview House
City Rental Rehabilitation Program Affordability Restrictions on Transfer of Property

DEVELOPER
Westview House LP,
a California limited partnership
By: Westview House CDP LLC,
a California limited liability company
Its: Administrative General Partner
By: Community Development Partners,
a California corporation
Its: Sole Managing Member
By: _________________________
Kyle Paine
Its: President
By: Westview Mercy House CHDO, LLC,
a California limited liability company
Its: Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation
Its: Sole Managing Member
By: _________________________
Lawrence G. Haynes, Jr.

Its: Chief Executive Officer
EXHIBIT 5
City Council 39 – 459 5/17/2022
Subordination Agreement (City of Santa Ana) Form 6456 Page 1 Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
4883-3835-3436v.3 0113877-000026

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

Davis Wright Tremaine LLP
865 S. Figueroa Street
Suite 2400
Los Angeles, California 90017
Attention: Nancy Clapp, Esq.

SPACE ABOVE THIS LINE FOR RECORDER’S USE

SUBORDINATION AGREEMENT
(City of Santa Ana)
This SUBORDINATION AGREEMENT (this “Agreement”) dated as of _________________, 2022, is executed by and among (i) UMPQUA BANK, an Oregon statechartered bank (in such capacity, “Initial Funding Lender” and “Senior Lender”), as assignee of the CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, a joint exercise of powers agency, organized and existing under the laws of the State of California (“Governmental Lender”), (ii) CITY OF SANTA ANA, a charter city and municipal corporation (“Subordinate Lender”), and (iii) WESTVIEW HOUSE LP, a California limited partnership (“Borrower”).

RECITALS:

A. Pursuant to Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code (the “Act”), Governmental Lender has determined to make a tax-exempt mortgage loan to the Borrower in the maximum aggregate principal amount of $_______________ (the “Senior Tax-Exempt Loan”) and a taxable mortgage loan to Borrower in the maximum aggregate principal amount of $_________________ (the “Senior Taxable Loan”; and together with the Senior Tax-Exempt Loan, the “Senior Loan”), in each case to provide for the financing of an 85- unit rental housing development project (the “Project”) on the “Land” (“Land”) described in the “Senior Secured Instrument” (as defined below). The Senior Loan will be made pursuant to that certain Borrower Loan Agreement (as amended from time to time, the “Senior Loan Agreement”) dated as of _______________ 1, 2022, between Governmental Lender, as lender, and Borrower, as borrower, and disbursed pursuant to that certain Construction Funding Agreement (the “Construction Funding Agreement”) dated as of even date herewith, by and between Borrower and Senior Lender. The Senior Tax-Exempt Loan is evidenced by, among other things, that certain promissory note dated as of even date herewith, made by Borrower to the order of Governmental Lender in the face principal amount of the Senior Tax-Exempt Note (the “Senior Tax-Exempt Note”), and the Senior Taxable Loan is evidenced by that certain promissory note dated as of even date herewith, made by Borrower to the order of Governmental Lender in the face principal amount of Senior Taxable Loan (the “Senior Taxable Note”; and together with the Senior Tax-Exempt Note, the “Senior Note”).

EXHIBIT 6
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Subordination Agreement (City of Santa Ana) Form 6456 Page 2 Fannie Mae 08-13 © 2013 Fannie Mae
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B. To secure Borrower’s obligations under the Senior Loan Agreement, the Construction Funding Agreement and the Senior Note, the Borrower is executing and delivering a deed of trust for the benefit of Governmental Lender (as amended from time to time, the “Senior Security Instrument”) dated as of even date herewith, encumbering, among other things, Borrower’s fee simple interest in the Land and certain personal property described in the Mortgage (collectively, the “Mortgaged Property”).

C. Governmental Lender, in order to obtain the funds necessary to enable it to make the Senior Loan to the Borrower, has determined to obtain a loan (the “Funding Loan”) from Initial Funding Lender in the maximum aggregate principal amount of $_______________. The Funding Loan will be made by Initial Funding Lender to Governmental Lender pursuant to that certain Funding Loan Agreement (as amended from time to time, the “Funding Loan Agreement”), by and between Initial Funding Lender, as lender, and Governmental Lender, as borrower. The Funding Loan will be evidenced by, among other things, that certain California Statewide Communities Development Authority Multifamily Housing Revenue Note (Westview House) 2022 Series I-1 in the amount of $________________, and that certain California Statewide Communities Development Authority Multifamily Housing Revenue Taxable Note (Westview House) 2022 Series I-2 in the amount of $______________ (collectively, as amended from time to time, the “Funding Loan Note”) dated as of the Closing Date (as defined in the Senior Loan Agreement), each, made by Governmental Lender to the order of Initial Funding Lender. The Initial Funding Lender, pursuant to the terms and subject to the conditions of the Funding Loan Agreement, has agreed to fund the proceeds of the Funding Loan to Governmental Lender on a draw-down basis, which proceeds of the Funding Loan will in turn be used by Governmental Lender to fund the Senior Loan to the Borrower. In order to secure the repayment of the Funding Loan, Governmental Lender has pledged to Initial Funding Lender, pursuant to the terms and conditions of the Funding Loan Agreement, all of Governmental Lender’s right, title and interest in, to and under the Senior Loan, the Senior Loan Agreement, the Senior Note, the Senior Security Instrument and all of the other “Borrower Loan Documents” (as defined in the Senior Loan Agreement) (collectively, the “Senior Loan Documents”). To further evidence and perfect such pledge, Governmental Lender, substantially concurrently herewith, has duly endorsed the Senior Note to the order of Initial Funding Lender and executed and delivered to Initial Funding Lender, that certain Assignment of Deed of Trust and Related Documents (“Assignment”) dated as of even date herewith, assigning to Initial Funding Lender, among other items, all of Governmental Lender’s right, title and interest under the Senior Security Instrument. The Assignment is being recorded in the Official Records of the County of Orange, State of California (the “Official Records”), substantially concurrently herewith.

D. Borrower has requested Senior Lender to permit Subordinate Lender to loan to Borrower (1) a subordinate loan in the amount of ///[$2,003,705]/// (the “HOME Loan”), (2) a subordinate loan in the amount of ///[$___________]/// (the “Inclusionary Loan”), and (3) a subordinate loan in the amount of ///[$___________]/// (the “Rehabilitation Loan”, and together with the HOME Loan and the Inclusionary Loan, the “Subordinate Loans”), and to allow the Subordinate Loans to be secured by mortgage liens against the Mortgaged Property.

E. Upon satisfaction of all Conditions to Conversion (as defined in the Forward Purchase Agreement), the Senior Loan will convert from a construction loan to a permanent term EXHIBIT 6
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Subordination Agreement (City of Santa Ana) Form 6456 Page 3 Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
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loan. On the Conversion Date, Citibank, N.A., a national banking association (“Permanent Lender”), shall purchase the Funding Loan Note and take anq assignment from Initial Funding Lender of the Senior Loan Documents, and become the “Senior Lender” hereunder. Upon Conversion (as defined in the Forward Purchase Agreement), the Borrower Loan Documents shall include that certain ______________________________ by and between Borrower and Permanent Lender (the “Permanent Loan Agreement”) and all other ____________________ described in the Permanent Loan Agreement.

F. Senior Lender has agreed to permit the Subordinate Loans and to allow the subordinate mortgage liens against the Mortgaged Property subject to all of the conditions contained in this Agreement.

AGREEMENTS:

NOW, THEREFORE, in order to induce the Senior Lender to permit the Subordinate Lender to make the Subordinate Loans to Borrower and to place a subordinate mortgage lien against the Mortgaged Property, and in consideration thereof, Senior Lender, Subordinate Lender and Borrower agree as follows:

1. Recitals.

The recitals set forth above are incorporated herein by reference.

2. Definitions.

In addition to the terms defined in the Recitals to this Agreement, for purposes of this Agreement the following terms have the respective meanings set forth below:
“Affiliate” means, when used with respect to a Person, any corporation, partnership, joint venture, limited liability company, limited liability partnership, trust or individual Controlled by, under common Control with, or which Controls such Person, and in all cases any other Person that holds fifty percent (50%) or more of the ownership interests in such Person. “Borrower” means the Person named as such in the first paragraph on page 1 of this Agreement, any successor or assign of Borrower, including without limitation, a receiver, trustee or debtor-inpossession and any other Person (other than Senior Lender) who acquires title to the Mortgaged Property after the date of this Agreement.
“Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) a day on which Senior Lender or Subordinate Lender is not open for business, or (d) a day on which the Federal Reserve Bank of New York is not open for business.
“Condemnation Action” means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect.
“Control” (including with correlative meanings, the terms “Controlling,” “Controlled by” and EXHIBIT 6
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Subordination Agreement (City of Santa Ana) Form 6456 Page 4 Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
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“under common Control with”), as applied to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or operations of such entity, whether through the ownership of voting securities, ownership interests or by contract or otherwise.
“Default Notice” means: (a) a copy of any written notice from Senior Lender to Borrower and Subordinate Lender stating that a Senior Loan Default has occurred under the Senior Loan Documents; or (b) a copy of any written notice from Subordinate Lender to Borrower and Senior Lender stating that a Subordinate Loan Default or a default under any Unsubordinated City Regulatory Agreement has occurred, as applicable. Each Default Notice shall specify the default upon which such Default Notice is based.
“Official Records” means the Official Records of Orange County, California. “Person” means an individual, an estate, a trust, a corporation, a partnership, a limited liability company or any other organization or entity (whether governmental or private). “Senior Lender” means the Person named as such in the first paragraph on page 1 of this Agreement.

When any other Person becomes the legal holder of the Senior Note, such other Person shall automatically become the Senior Lender.
“Senior Loan” has the meaning set forth in Recital A, above. “Senior Loan Agreement” has the meaning set forth in Recital A, above. Prior to the Conversion Date, the Senior Loan Agreement shall be supplemented by the Construction Funding Agreement and, from and after the Conversion Date, the Senior Loan Agreement shall be supplemented by the Permanent Loan Agreement.
“Senior Loan Default” means the occurrence of an “Event of Default” as that term is defined in the Senior Loan Documents.
“Senior Loan Documents” has the meaning set forth in Recital C, above. From and after the Conversion Date, the “Senior Loan Documents” shall also include the Permanent Loan Agreement and the other “Loan Documents” described therein.
“Senior Note” has the meaning set forth in Recital A, above. “Senior Security Instrument” has the meaning set forth in Recital B, above. “Subordinate Lender” means the Person named as such in the first paragraph on page 1 of this Agreement, any successor or assign of Subordinate Lender, or any other Person who becomes the legal holder of any Subordinate Note after the date of this Agreement. “Subordinate Loan Agreements” means, collectively, (a) that certain HOME Loan Agreement dated as of May 26, 2022, (b) that certain Inclusionary Housing Program Loan Agreement dated as of May 26, 2022, and (c) that certain Rental Rehabilitation Program Loan Agreement dated as of May 26, 2022, each, by and between Subordinate Lender and Borrower.

EXHIBIT 6
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Subordination Agreement (City of Santa Ana) Form 6456 Page 5 Fannie Mae 08-13 © 2013 Fannie Mae
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“Subordinate Loan Default” means a default by Borrower in performing or observing any of the terms, covenants or conditions in the Subordinate Loan Documents to be performed or observed by it, which continues beyond any applicable period provided in the Subordinate Loan Documents for curing the default.
“Subordinate Loan Documents” means the Subordinate Loan Agreements, Subordinate Notes, the Subordinate Mortgages, any UCC-1 financing statement filed showing Borrower, as debtor, and Subordinate Lender, as secured party, filed in connection with the Subordinate Loans, and all other documents evidencing, securing or otherwise executed and delivered in connection with the Subordinate Loans.
“Subordinate Loans” has the meaning set forth in Recital D, above. “Subordinate Mortgages” means, collectively, (a) that certain City HOME Deed of Trust and Assignment of Rents dated as of May 26, 2022, (b) that certain City Inclusionary Housing Program Deed of Trust and Assignment of Rents dated as of May 26, 2022, and (c) that certain City Rental Rehabilitation Program Deed of Trust and Assignment of Rents dated as of May 26, 2022, each, executed by Borrower in favor of Subordinate Lender, and recorded in the Official Records substantially concurrently herewith, encumbering the Mortgaged Property as security for the applicable Subordinate Loan.
“Subordinate Notes” means, collectively, (a) that certain City HOME Loan Note Secured By Subordinated Deed of Trust to the City of Santa Ana, California dated as of May 26, 2022, executed by Borrower to the order of Subordinate Lender, in the face principal amount of $2,003,705, evidencing the HOME Loan, (b) that certain City Inclusionary Housing Fund Loan Note Secured By Subordinated Deed of Trust to the City of Santa Ana, California dated as of May 26, 2022, executed by Borrower to the order of Subordinate Lender, in the face principal amount of $1,514,113, evidencing the Inclusionary Loan, and (c) that certain City Rental Rehabilitation Program Loan Note Secured By Subordinated Deed of Trust to the City of Santa Ana, California dated as of May 26, 2022, executed by Borrower to the order of Subordinate Lender, in the face principal amount of $386,523, evidencing the Rehabilitation Loan. “Unsubordinated City Regulatory Agreements” means, collectively, (a) that certain Affordability Restrictions on Transfer of Property dated May 26, 2022 (the “HOME Regulatory Agreement”), (b) that certain Inclusionary Housing Program Affordability Restrictions on Transfer of Property dated May 26, 2022 (the “Inclusionary Regulatory Agreement”), and (c) that certain Rental Rehabilitation Program Affordability Restrictions on Transfer of Property dated May 26, 2022 (the “Rehabilitation Regulatory Agreement”), each, executed by and between Borrower and Subordinate Lender, and recorded in the Official Records substantially concurrently herewith.

3. Permission to Place Mortgage Lien Against Mortgaged Property.

Senior Lender agrees, notwithstanding the prohibition against inferior liens on the Mortgaged Property contained in the Senior Loan Documents and subject to the provisions of this Agreement, to permit Subordinate Lender to record the Subordinate Mortgages, the EXHIBIT 6
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Subordination Agreement (City of Santa Ana) Form 6456 Page 6 Fannie Mae 08-13 © 2013 Fannie Mae
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Unsubordinated City Regulatory Agreements, and other recordable Subordinate Loan Documents against the Mortgaged Property to secure Borrower’s obligation to repay the Subordinate Notes and all other obligations, indebtedness and liabilities of Borrower to Subordinate Lender under and in connection with the Subordinate Loans. Such permission is subject to the condition that each of the representations and warranties made by the Borrower and the Subordinate Lender in Section 4 is true and correct on the date of this Agreement and on the date on which the proceeds of the Subordinate Loans are disbursed to the Borrower. If any of the representations and warranties made by the Borrower and the Subordinate Lender in Section 4 is not true and correct on both of those dates, the provisions of the Senior Loan Documents applicable to unpermitted liens on the Mortgaged Property shall apply.

4. Borrower’s and Subordinate Lender’s Representations and Warranties.

Borrower and Subordinate Lender each makes the following representations and warranties to Senior Lender:
(a) Subordinate Loan Documents.

The Subordinate Loans are evidenced by the Subordinate Notes and is secured by the Subordinate Mortgages, the Subordinate Loan Agreements and the other Subordinate Loan Documents.
(b) Relationship of Borrower to Subordinate Lender and Senior Lender.

The Subordinate Lender is not an Affiliate of the Borrower and is not in possession of any facts which would lead it to believe that the Senior Lender is an Affiliate of the Borrower. (c) Term.

The terms of the Subordinate Notes do not end before the stated term of the Senior Note. (d) Subordinate Loan Documents and Unsubordinated City Regulatory Agreement.

The executed Subordinate Loan Documents and the Unsubordinated City Regulatory Agreements are substantially in the same forms as those submitted to, and approved by, Senior Lender prior to the date of this Agreement. Upon execution and delivery of the Subordinate Loan Documents and the Unsubordinated City Regulatory Agreements, Borrower shall deliver to Senior Lender an executed copy of each of the Subordinate Loan Documents and the Unsubordinated City Regulatory Agreements, certified to be true, correct and complete.

5. Deliveries.

Upon execution and delivery of the Senior Loan Documents, Borrower shall deliver to Subordinate Lender an executed copy of each of the Senior Loan Documents, certified to be true, correct and complete.

EXHIBIT 6
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6. Terms of Subordination.
(a) Agreement to Subordinate.

Senior Lender and Subordinate Lender agree that (1) the Unsubordinated City Regulatory Agreements shall remain senior to the lien of the Senior Instrument and all other Senior Loan Documents, (2) subject to the terms of paragraph (c) below in this Section 6, the indebtedness evidenced by the Subordinate Loan Documents is and shall be subordinated in right of payment, to the extent and in the manner provided in this Agreement, to the prior payment in full of the Indebtedness evidenced by the Senior Loan Documents, and (3) the liens, terms, covenants and conditions of the Subordinate Mortgages and the other Subordinate Loan Documents are and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Senior Security Instrument and the other Senior Loan Documents and to all advances heretofore made or which may hereafter be made pursuant to the Senior Security Instrument and the other Senior Loan Documents (including but not limited to, all sums advanced for the purposes of (A) protecting or further securing the lien of the Senior Security Instrument, curing defaults by Borrower under the Senior Loan Documents or for any other purpose expressly permitted by the Senior Loan Documents, or (B) constructing, renovating, repairing, furnishing, fixturing or equipping the Mortgaged Property).
(b) Subordination of Subrogation Rights.

Subordinate Lender agrees that if, by reason of its payment of real estate taxes or other monetary obligations of Borrower, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents or the Unsubordinated City Regulatory Agreements, it acquires by right of subrogation or otherwise a lien on the Mortgaged Property which (but for this subsection) would be senior to the lien of the Senior Security Instrument, then, in that event, such lien shall be subject and subordinate to the lien of the Senior Security Instrument. (c) Payments Before Senior Loan Default.

Notwithstanding anything to the contrary in this Agreement, until Subordinate Lender receives a Default Notice (or otherwise acquires actual knowledge) of a Senior Loan Default, Subordinate Lender shall be entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan Documents.
(d) Payments After Senior Loan Default.

Borrower agrees that, after it receives a Default Notice (or otherwise acquires knowledge) of a Senior Loan Default, it will not make any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorneys’ fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent. Subordinate Lender agrees that, after it receives a Default Notice from Senior Lender with written instructions directing Subordinate Lender not to accept payments from Borrower on account of the Subordinate Loans, it will not accept any payments under or pursuant to the Subordinate Loan Documents (including but not EXHIBIT 6
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limited to principal, interest, additional interest, late payment charges, default interest, attorneys’ fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent or until the Senior Loan has been repaid in full. If Subordinate Lender receives written notice from Senior Lender that the Senior Loan Default which gave rise to Subordinate Lender’s obligation not to accept payments has been cured, waived, or otherwise suspended by Senior Lender, the restrictions on payment to Subordinate Lender in this Section 6 shall terminate, and Senior Lender shall have no right to any subsequent payments made to Subordinate Lender by Borrower prior to Subordinate Lender’s receipt of a new Default Notice from Senior Lender in accordance with the provisions of this Section 6(d). (e) Remitting Subordinate Loan Payments to Senior Lender.

If, after Subordinate Lender receives a Default Notice from Senior Lender in accordance with Section 6(d), Subordinate Lender receives any payments under the Subordinate Loan Documents, Subordinate Lender agrees that such payment or other distribution will be received and held in trust for Senior Lender and unless Senior Lender otherwise notifies Subordinate Lender in writing, will be promptly remitted, in kind to Senior Lender, properly endorsed to Senior Lender, to be applied to the principal of, interest on and other amounts due under the Senior Loan Documents in accordance with the provisions of the Senior Loan Documents. By executing this Agreement, Borrower specifically authorizes Subordinate Lender to endorse and remit any such payments to Senior Lender, and specifically waives any and all rights to have such payments returned to Borrower or credited against the Subordinate Loans. Borrower and Senior Lender acknowledge and agree that payments received by Subordinate Lender, and remitted to Senior Lender under this Section 6, shall not be applied or otherwise credited against the Subordinate Loans, nor shall the tender of such payment to Senior Lender waive any Subordinate Loan Default which may arise from the inability of Subordinate Lender to retain such payment or apply such payment to the Subordinate Loans.
(f) Notice of Payment from Other Persons.

Subordinate Lender agrees to notify (telephonically or via email, followed by written notice) Senior Lender of Subordinate Lender’s receipt from any Person other than Borrower of a payment with respect to Borrower’s obligations under the Subordinate Loan Documents, promptly after Subordinate Lender obtains knowledge of such payment. (g) Agreement Not to Commence Bankruptcy Proceeding.

Subordinate Lender agrees that during the term of this Agreement it will not commence, or join with any other creditor in commencing any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings against or with respect to Borrower, without Senior Lender’s prior written consent.

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7. Default Under Subordinate Loan Documents or Unsubordinated City Regulatory Agreements.
(a) Notice of Subordinate Loan Default and Cure Rights.

During the term of this Agreement, Subordinate Lender shall deliver to Senior Lender a Default Notice within five (5) Business Days in each case where Subordinate Lender has given a Default Notice to Borrower. Failure of Subordinate Lender to send a Default Notice to Senior Lender shall not prevent the exercise of Subordinate Lender’s rights and remedies under the Subordinate Loan Documents or the Unsubordinated City Regulatory Agreements, as appliable, subject to the provisions of this Agreement. Senior Lender shall have the right, but not the obligation, to cure any Subordinate Loan Default or any default under any Unsubordinated City Regulatory Agreement within sixty (60) days following the date of such notice; provided, however that Subordinate Lender shall be entitled, during such sixty (60) day period, to continue to pursue its rights and remedies under the Subordinate Loan Documents or the Unsubordinated City Regulatory Agreements, as applicable, to the extent permitted under Section 7(b). All amounts paid by Senior Lender in accordance with the Senior Loan Documents to cure a Subordinate Loan Default or a default under any Unsubordinated City Regulatory Agreement shall be deemed to have been advanced by Senior Lender pursuant to, and shall be secured by, the Senior Loan Agreement and the Senior Security Instrument.
(b) Subordinate Lender’s Agreement to Standstill.

If a Subordinate Loan Default or a default under any Unsubordinated City Regulatory Agreement occurs and is continuing, the Subordinate Lender agrees that, without the Senior Lender’s prior written consent, it will not accelerate the Subordinate Loans, commence foreclosure proceedings with respect to the Mortgaged Property, collect rents, appoint (or seek the appointment of) a receiver or institute any other collection or enforcement action. (c) Cross Default.

Borrower and Subordinate Lender agree that a Subordinate Loan Default and/or a default under the any Unsubordinated City Regulatory Agreement shall constitute a Senior Loan Default under the Senior Loan Documents and Senior Lender shall have the right to exercise all rights or remedies under the Senior Loan Documents in the same manner as in the case of any other Senior Loan Default. If Subordinate Lender notifies Senior Lender in writing that any Subordinate Loan Default or of any default under any Unsubordinated City Regulatory Agreement of which Senior Lender has received a Default Notice has been cured or waived, as determined by Subordinate Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of the Mortgaged Property pursuant to its rights under the Senior Loan Documents, any Senior Loan Default under the Senior Loan Documents arising solely from such Subordinate Loan Default or default under any Unsubordinated City Regulatory Agreement shall be deemed cured, and the Senior Loan shall be reinstated, provided, however, that Senior Lender shall not be required to return or otherwise credit for the benefit of Borrower any default rate interest or other default related charges or payments received by Senior Lender during such Senior Loan Default.

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8. Default Under Senior Loan Documents.
(a) Notice of Senior Loan Default and Cure Rights.

Senior Lender shall deliver to Subordinate Lender a Default Notice within five (5) Business Days in each case where Senior Lender has given a Default Notice to Borrower. Failure of Senior Lender to send a Default Notice to Subordinate Lender shall not prevent the exercise of Senior Lender’s rights and remedies under the Senior Loan Documents, subject to the provisions of this Agreement. The Subordinate Lender shall have the right, but not the obligation, to cure any such Senior Loan Default as provided below. Subordinate Lender shall have up to thirty (30) days from the date of the Default Notice to cure any monetary default under the Senior Loan Documents; provided, however, that the Senior Lender shall be entitled during such 30-day period to continue to pursue its remedies with respect to the Mortgaged Property. Subordinate Lender shall have up to sixty (60) days from the date of the Default Notice to cure a non-monetary default if during such 60- day period Subordinate Lender keeps current all payments required by the Senior Loan Documents.

In the event that such a non-monetary default creates an unacceptable level of risk relative to the Mortgaged Property, or Senior Lender’s secured position relative to the Mortgaged Property, as determined by Senior Lender in its sole discretion, then Senior Lender may exercise during such 60- day period all available rights and remedies to protect and preserve the Mortgaged Property and the rents, revenues and other proceeds from the Mortgaged Property. All amounts paid by the Subordinate Lender to the Senior Lender to cure a Senior Loan Default shall be deemed to have been advanced by the Subordinate Lender pursuant to, and shall be secured by the lien of, the Subordinate Mortgages.
(b) Cross Default.

Subordinate Lender agrees that, notwithstanding any contrary provision contained in the Subordinate Loan Documents, a Senior Loan Default shall not constitute a default under the Subordinate Loan Documents (if no other default has occurred under the Subordinate Loan Documents) until either (1) Senior Lender has accelerated the maturity of the Senior Loan, or (2) Senior Lender has taken affirmative action to exercise its rights under the Senior Loan Documents to collect rent, to appoint (or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale contained in) the Senior Loan Documents. At any time after a Senior Loan Default is determined to constitute a default under the Subordinate Loan Documents, Subordinate Lender shall be permitted to pursue its remedies for default under the Subordinate Loan Documents, subject to the restrictions and limitations of this Agreement. If at any time Borrower cures any Senior Loan Default to the satisfaction of Senior Lender, as evidenced by written notice from Senior Lender to Subordinate Lender, any default under the Subordinate Loan Documents arising from such Senior Loan Default shall be deemed cured and the Subordinate Loans shall be retroactively reinstated as if such Senior Loan Default had never occurred.

9. Conflict.

Borrower, Senior Lender and Subordinate Lender each agrees that, in the event of any conflict or inconsistency between the terms of the Senior Loan Documents, the Subordinate Loan Documents, the Unsubordinated City Regulatory Agreements and the terms of this Agreement, the EXHIBIT 6
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terms of this Agreement shall govern and control solely as to the following: (a) the relative priority of the security interests of Senior Lender and Subordinate Lender in the Mortgaged Property; (b) the timing of the exercise of remedies by Senior Lender and Subordinate Lender under the Senior Loan Documents and the Subordinate Loan Documents and/or the Unsubordinated City Regulatory Agreements, respectively; and (c) solely as between Senior Lender and Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which Senior Lender and Subordinate Lender have agreed to as expressly provided in this Agreement. Borrower acknowledges that the terms and provisions of this Agreement shall not, and shall not be deemed to: extend Borrower’s time to cure any Senior Loan Default or Subordinate Loan Default and/or default under any Unsubordinated City Regulatory Agreement, as the case may be; give Borrower the right to notice of any Senior Loan Default or Subordinate Loan Default and/or default under any Unsubordinated City Regulatory Agreement, as the case may be other than that, if any, provided, respectively under the Senior Loan Documents or the Subordinate Loan Documents and/or any Unsubordinated City Regulatory Agreement; or create any other right or benefit for Borrower as against Senior Lender or Subordinate Lender.

10. Rights and Obligations of Subordinate Lender Under the Subordinate Loan Documents and of Senior Lender under the Senior Loan Documents.

Subject to each of the other terms of this Agreement, all of the following provisions shall supersede any provisions of the Subordinate Loan Documents covering the same subject matter:
(a) Protection of Security Interest.

Subordinate Lender shall not, without the prior written consent of Senior Lender in each instance, take any action which has the effect of increasing the indebtedness outstanding under, or secured by, the Subordinate Loan Documents, except that Subordinate Lender shall have the right to advance funds to cure Senior Loan Defaults pursuant to Section 8(a) and advance funds pursuant to the Subordinate Loan Documents for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Mortgaged Property and curing other defaults by Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty.

Following the occurrence of (1) a Condemnation Action, or (2) a fire or other casualty resulting in damage to all or a portion of the Mortgaged Property (collectively, a “Casualty”), at any time or times when the Senior Security Instrument remains a lien on the Mortgaged Property the following provisions shall apply:
(A) Subordinate Lender hereby agrees that its rights (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Condemnation Action or a Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a Condemnation Action or a Casualty shall be and remain subject and subordinate in all respects to Senior Lender’s rights under the Senior Loan Documents with respect thereto, and Subordinate Lender shall be bound by any settlement or adjustment of a claim EXHIBIT 6
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resulting from a Condemnation Action or a Casualty made by Senior Lender; provided, however, this subsection or anything contained in this Agreement shall not limit the rights of Subordinate Lender to file any pleadings, documents, claims or notices with the appropriate court with jurisdiction over the proposed Condemnation Action or Casualty; and
(B) all proceeds received or to be received on account of a Condemnation Action or a Casualty, or both, shall be applied (either to payment of the costs and expenses of repair and restoration or to payment of the Senior Loan) in the manner provided by the Senior Lender Loan Documents; provided, however, that if Senior Lender is entitled to and elects to apply such proceeds to payment of the principal of, interest on and other amounts payable under the Senior Loan, any proceeds remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the Senior Loan shall be paid to, and may be applied by, Subordinate Lender in accordance with the applicable provisions of the Subordinate Loan Documents, provided however, Senior Lender agrees to consult with Subordinate Lender in determining the application of Casualty proceeds, provided further however that in the event of any disagreement between Senior Lender and Subordinate Lender over the application of Casualty proceeds, the decision of Senior Lender, in accordance with the rights under its Senior Loan Documents, shall prevail.
(c) Insurance.

Subordinate Lender agrees that all original policies of insurance required pursuant to the Senior Security Instrument shall be held by Senior Lender. The preceding sentence shall not preclude Subordinate Lender from requiring that it be named as a loss payee, as its interest may appear, under all policies of property damage insurance maintained by Borrower with respect to the Mortgaged Property, provided such action does not affect the priority of payment of the proceeds of property damage insurance under the Senior Security Instrument, or that it be named as an additional insured under all policies of liability insurance maintained by Borrower with respect to the Mortgaged Property.
(d) No Modification of Subordinate Loan Documents or Unsubordinated City Regulatory Agreements.

Borrower and Subordinate Lender each agree that, until the principal of, interest on and all other amounts payable under the Senior Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender in each instance, increase the amount of any Subordinate Loan, increase the required payments due under any Subordinate Loan, decrease the term of any Subordinate Loan, increase the interest rate on any Subordinate Loan, or otherwise amend any Subordinate Loan terms or any Unsubordinated City Regulatory Agreement in a manner that creates an adverse effect upon Senior Lender under the Senior Loan Documents. Any unauthorized amendment of the Subordinate Loan Documents or any Unsubordinated City Regulatory Agreement or assignment of Subordinate Lender’s interest in any Subordinate Loan without Senior Lender’s consent shall be void ab initio and of no effect whatsoever and Subordinate EXHIBIT 6
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Lender agrees that it shall not transfer or assign any Subordinate Loan or any Subordinate Loan Document without the prior written consent of the Senior Lender.

11. Conversion, Modification or Refinancing of Senior Loan.

Subordinate Lender consents to any agreement or arrangement in which Senior Lender waives, postpones, extends, reduces or modifies any provisions of the Senior Loan Documents, including any provision requiring the payment of money. Subordinate Lender further agrees that its agreement to subordinate hereunder shall extend to the Permanent Loan Agreement and the other “Loan Documents” described therein and any amendments or additional documents executed in connection with the Conversion Date and the Conversion of the Senior Loan to a term loan, as well as any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Loan (including reasonable and necessary costs associated with the closing and/or the refinancing) and, in the event of new mortgage debt, Subordinate Lender shall execute and deliver to Senior Lender a new subordination agreement on the same terms and conditions as this Subordination Agreement; and that all the terms and covenants of this Agreement shall inure to the benefit of any holder of any such refinanced debt; and that all references to the Senior Loan, the Senior Note, the Senior Loan Agreement, the Senior Security Instrument, the Senior Loan Documents and Senior Lender shall mean, respectively, the refinance loan, the refinance note loan agreement, the mortgage securing the refinance note, all documents evidencing securing or otherwise pertaining to the refinance note and the holder of the refinance note. Following the Conversion Date, all terms and covenants of this Agreement shall inure to the benefit of any holder of the Senior Loan, and all references herein to the Senior Loan Agreement shall mean the Senior Loan Agreement as supplemented by the Permanent Loan Agreement.

12. Default by Subordinate Lender or Senior Lender.

If Subordinate Lender or Senior Lender defaults in performing or observing any of the terms, covenants or conditions to be performed or observed by it under this Agreement, the other, non-defaulting lender shall have the right to all available legal and equitable relief.

13. Special Provisions Regarding Unsubordinated City Regulatory Agreements (a) Transfers. Notwithstanding anything set forth in the Unsubordinated City Regulatory Agreements to the contrary, nothing in the Unsubordinated City Regulatory Agreements shall be deemed to restrict or limit, or require the consent of Subordinate Lender to, the following: (i) any foreclosure or deed in lieu of foreclosure of the Senior Security Instrument by Senior Lender or its successor, assigns, or nominee (a “Foreclosure Action”), or (ii) the first subsequent transfer by Senior Lender or its successors, assigns or nominee following a Foreclosure Action. Neither the successor owner initially acquiring title to the Mortgaged Property as a result of a Foreclosure Action, nor its immediate successor in interest, shall be subject to any of the limitations upon creation of indebtedness nor creation of any lien securing indebtedness set forth in the Unsubordinated City Regulatory Agreements; provided that any subsequent mortgagee or lienholder with respect to such indebtedness shall agree that in the event of foreclosure or deed in lieu of foreclosure, the transferee under such foreclosure agrees that it will take subject to the Unsubordinated City Regulatory Agreement; and provided further that all other subsequent EXHIBIT 6
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encumbrances shall be subject to Subordinate Lender’s approval under the Unsubordinated City Regulatory Agreement. Any sale, assignment or transfer of the Mortgaged Property following a transfer pursuant to a Foreclosure Action (other than the first transfer thereafter) shall be subject to Subordinate Lender’s rights under the Unsubordinated City Regulatory Agreement to approve such transfer, except that Subordinate Lender agrees that its decision to approve any such sale, assignment or other transfer will be based solely upon whether the proposed transferee is qualified to manage and operate affordable housing projects similar to the Mortgaged Property, and the Subordinate Lender will not unreasonably withhold, delay or condition its consent to any such proposed transfer.
(b) Compliance with Subordinate Loan Documents. Notwithstanding anything to the contrary set forth in the Unsubordinated City Regulatory Agreements, from and after any foreclosure or deed in lieu of foreclosure, neither Senior Lender nor any successor in interest to the Property following any foreclosure or deed in lieu of foreclosure of the Senior Deed of Trust (collectively, the “Successor Owner”), shall be obligated to comply with the terms of any Subordinate Loan Document, and neither Senior Lender nor any Successor Owner shall have any obligation to repay the Subordinate Loans.
(c) Indemnification Provisions in Unsubordinated City Regulatory Agreements.

Notwithstanding anything to the contrary set forth in the Unsubordinated City Regulatory Agreements, in no event shall Senior Lender or any Successor Owner be liable to Subordinate Lender for amounts due to the Subordinate Lender under the Unsubordinated City Regulatory Agreements as the result of an act or a failure to act occurring prior to the date on which Senior Lender or its successor, assigns, or nominee acquires title to the Mortgaged Property by foreclosure or deed in lieu of foreclosure.
(d) Default Under Unsubordinated City Regulatory Agreements. No Successor Owner shall be required to cure any default under the Unsubordinated City Regulatory Agreements first occurring prior to the date upon which such Successor Owner acquired title to the Mortgaged Property, except that each Successor Owner shall be required to cure continuing defaults under the Unsubordinated City Regulatory Agreement related to the Mortgaged Property; provided further, however, that each such Successor Owner shall have 120 days after the date upon which it acquires title to the Mortgaged Property to cure such continuing defaults, or, if any such continuing default is not reasonably susceptible to a cure by such Successor Owner within such period, to commence curing such default (and in such latter case, such Successor Owner shall thereafter continuously and diligently pursue the cure of such default to completion).

14. Reinstatement.

To the extent that Borrower makes a payment to Senior Lender or Senior Lender receives any payment or proceeds of the collateral securing the Senior Loan for Borrower’s benefit, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable doctrine, then to the extent of such payment or proceeds received and not retained by Senior Lender, this Agreement shall be reinstated and continue in full force and effect until full and final payment shall have been made EXHIBIT 6
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to Senior Lender. Subordinate Lender agrees to hold in trust for Senior Lender and promptly remit to Senior Lender any payments received by Subordinate Lender after such invalidated, rescinded or returned payment was originally made.

15. Notices.

Each notice, request, demand, consent, approval or other communication (hereinafter in this Section referred to collectively as “notices” and referred to singly as a “notice”) which the Senior Lender or the Subordinate Lender is required or permitted to give to the other party pursuant to this Agreement shall be in writing and shall be deemed to have been duly and sufficiently given if: (a) personally delivered with proof of delivery thereof (any notice so delivered shall be deemed to have been received at the time so delivered); or (b) sent by Federal Express (or other similar national overnight courier) designating early morning delivery (any notice so delivered shall be deemed to have been received on the next Business Day following receipt by the courier); or (c) sent by United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any notice so sent shall be deemed to have been received two days after mailing in the United States), addressed to the respective parties as follows:

SENIOR LENDER:

Umpqua Bank
One Capitol Mall, Suite 610
Sacramento, California 95814
Attention: Monica Sharp
SUBORDINATE LENDER:

City of Santa Ana
City Manager
20 Civic Center Plaza
P.O. Box 1988
Santa Ana, California 92702
With a copy to:

City of Santa Ana
City Attorney
20 Civic Center Plaza, 7th Floor (M-29)
Santa Ana, California 92702
Either party may, by notice given pursuant to this Section, change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses for its notices, but notice of a change of address shall only be effective upon receipt.

EXHIBIT 6
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16. General.
(a) Assignment/Successors.

This Agreement shall be binding upon Borrower, Senior Lender and Subordinate Lender and shall inure to the benefit of the respective legal successors, transferees and assigns of Borrower, Senior Lender and Subordinate Lender. Borrower shall not assign any of its rights and obligations under this Agreement without the prior written consent of Senior Lender and Subordinate Lender.
(b) No Partnership or Joint Venture.

Senior Lender’s permission for the placement of the Subordinate Loan does not constitute Senior Lender as a joint venturer or partner of Subordinate Lender. Neither party hereto shall hold itself out as a partner, agent or Affiliate of the other party hereto. (c) Senior Lender’s and Subordinate Lender’s Consent.

Wherever Senior Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Senior Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement. Wherever Subordinate Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Subordinate Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement.
(d) Further Assurances.

Subordinate Lender, Senior Lender and Borrower each agrees, at Borrower’s expense, to execute and deliver all additional instruments and/or documents reasonably required by any other party to this Agreement in order to evidence that the Subordinate Mortgages are subordinate to the lien, covenants and conditions of the Senior Loan Documents, or to further evidence the intent of this Agreement.
(e) Amendment.

This Agreement shall not be amended except by written instrument signed by all parties hereto.
(f) Governing Law.

This Agreement shall be governed by the laws of the jurisdiction in which the Mortgaged Property is located without giving effect to any choice of law provisions thereof that would result in the application of the laws of another jurisdiction. Senior Lender, Subordinate Lender and Borrower agree that any controversy arising under or in relation to this Security Instrument shall be litigated exclusively in the jurisdiction in which the Mortgaged Property is located. The state and federal courts and authorities with jurisdiction in such locale shall have exclusive jurisdiction over all controversies that arise under or in relation to this Agreement. The parties hereto EXHIBIT 6
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irrevocably consent to service, jurisdiction, and venue of such courts for any such litigation and waive any other venue to which any might be entitled by virtue of domicile, habitual residence or otherwise.
(g) Severable Provisions.

If any provision of this Agreement shall be invalid or unenforceable to any extent, then the other provisions of this Agreement, shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
(h) Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one (1) and the same instrument.
(i) Sale of Senior Loan.

Nothing in this Agreement shall limit Senior Lender’s (including any assignee or transferee of Senior Lender) right to sell or transfer the Senior Loan, or any interest in the Senior Loan. The Senior Loan or a partial interest in the Senior Loan (together with this Agreement and the other Loan Documents) may be sold one or more times without prior notice to Borrower. [Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, Borrower, Senior Lender and Subordinate Lender have signed and delivered this Agreement under seal (where applicable) or have caused this Agreement to be signed and delivered under seal (where applicable) by a duly authorized representative.

Where applicable law so provides, Borrower, Senior Lender, and Subordinate Lender intend that this Agreement shall be deemed to be signed and delivered as a sealed instrument.

SENIOR LENDER:

UMPQUA BANK,
an Oregon state-chartered bank
By: _______________________________
Monica Sharp
Vice President
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BORROWER:

WESTVIEW HOUSE LP,
a California limited partnership
By: Westview House CDP LLC,
a California limited liability company,
its Administrative General Partner
By: Community Development Partners,
a California corporation,
its sole Managing Member
By: _____________________________
Kyle Paine
President
By: Westview Mercy House CHDO LLC,
a California limited liability company,
its Managing General Partner
By: Mercy House CHDO, Inc.,
a California nonprofit public benefit corporation,
its sole Managing Member
By: _____________________________
Lawrence G. Haynes, Jr.

Executive Director
Address:

Westview House LP
c/o Community Development Partners
3416 Via Oporto, Suite 301
Newport Beach, California 92663
Attention: President
EXHIBIT 6
City Council 39 – 478 5/17/2022
Subordination Agreement (City of Santa Ana) Form 6456 Page S-3 Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
4883-3835-3436v.3 0113877-000026
SUBORDINATE LENDER:

CITY OF SANTA ANA,
a charter city and municipal corporation
By: _____________________________________
Kristine Ridge
City Manager
ATTEST:

By: __________________________________
Daisy Gomez
Clerk of the Council
Dated: _________________________________
APPROVED AS TO FORM:

SONIA R. CARVALHO, City Attorney
By: __________________________________
Ryan O. Hodge
Assistant City Attorney
Dated: _________________________________
RECOMMENDED FOR APPROVAL:

By: __________________________________
Steven A. Mendoza
Executive Director
Community Development Agency
Dated: _________________________________
May 5, 2022
EXHIBIT 6
City Council 39 – 479 5/17/2022
Subordination Agreement (City of Santa Ana) Form 6456 Page A-1 Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
4883-3835-3436v.3 0113877-000026

EXHIBIT A
Legal Description
EXHIBIT 6
City Council 39 – 480 5/17/2022
Subordination Agreement (County of Orange) Form 6456
Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
4883-3835-3436v.3 0113877-000026

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California )
) ss
County of _______________________ )
On ________________________, 2022 before me, ____________________________________, a Notary Public, personally appeared __________________________________________, who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument.

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

WITNESS my hand and official seal.

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

EXHIBIT 6
City Council 39 – 481 5/17/2022
Subordination Agreement (City of Santa Ana) Form 6456
Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
4883-3835-3436v.3 0113877-000026

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

WITNESS my hand and official seal.

EXHIBIT 6
City Council 39 – 482 5/17/2022
Subordination Agreement (City of Santa Ana) Form 6456
Fannie Mae 08-13 © 2013 Fannie Mae
[Westview House]
4883-3835-3436v.3 0113877-000026

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

WITNESS my hand and official seal.

EXHIBIT 6
City Council 39 – 483 5/17/2022
RESOLUTION NO. 2022-____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA

APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES

DEVELOPMENT AUTHORITY OF EXEMPT FACILITY BONDS FOR A

QUALIFIED RESIDENTIAL RENTAL PROJECT FOR WESTVIEW HOUSE WHEREAS, Westview House LP, a California limited partnership (the “Borrower”) or a partnership of which Community Development Partners (the “Developer”) or a related person to the Developer is the general partner, has requested that the California Statewide Communities Development Authority (the “Authority”) adopt a plan of financing providing for the issuance of exempt facility bonds for a qualified residential rental project pursuant to Section 142(a)(7) of the Internal Revenue Code of 1986 (the “Code”) in one or more series issued from time to time, including bonds issued to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed $45,000,000 in aggregate principal amount (the “Bonds”), to finance or refinance the acquisition, construction, improvement and equipping of a multifamily rental housing project located at 2530 & 2534 Westminster Avenue, Santa Ana, California (the “Project”); and
WHEREAS, pursuant to Section 147(f) of the Code, the issuance of the Bonds by the Authority must be approved by the “applicable elected representative” of the governmental units on whose behalf such bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a public hearing held following reasonable public notice; and WHEREAS, the members of the City Council of the City of Santa Ana (the “City Council”) are the elected legislative members of the City and are one of the “applicable elected representatives” required to approve the issuance of the Bonds under Section 147(f) of the Code; and
WHEREAS, the Authority has requested that the City Council approve the issuance of the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 9 of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1, 1988 (the “Agreement”), among certain local agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following notice duly given, held a public hearing regarding the issuance of the Bonds, and now desires to approve the issuance of the Bonds by the Authority;

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS:

Section 1. The above recitals are true and correct.

Section 2. The City Council hereby approves the issuance of the Bonds by the Authority.

It is the purpose and intent of the City Council that this resolution constitute approval of the issuance of the Bonds by the Authority, for the purposes of (a) Section 147(f) of the Code by the applicable elected representative of the governmental unit having jurisdiction over the area in which the Project is located, in accordance with said Section 147(f) and (b) Section 9 of the Agreement.

EXHIBIT 7
City Council 39 – 484 5/17/2022
Section 3. The issuance of the Bonds shall be subject to approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City shall have no responsibility or liability whatsoever with respect to repayment or administration of the Bonds.

Section 4. The adoption of this Resolution shall not obligate the City or any department thereof to: (i) provide any financing with respect to the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary with respect to the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further action with respect to the Authority or its membership therein.

Section 5. The City Manager and applicable Executive Directors of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents that they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing approved hereby.

Section 6. This resolution shall take effect immediately upon adoption.

ADOPTED this 17th day of May, 2022.
_______________________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:

Sonia R. Carvalho
City Attorney
By:__________________________
Ryan O. Hodge
Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
EXHIBIT 7
City Council 39 – 485 5/17/2022
Public Works Agency
www.santa-ana.org/pw
Item # 40
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
May 17, 2022
TOPIC: Resolution Adjusting Solid Waste Rates

AGENDA TITLE
Public Hearing - Adopt Resolution Adjusting the Solid Waste Rates

RECOMMENDED ACTION
Hold a public hearing and adopt a resolution adjusting the solid waste rates effective July 1, 2022.

DISCUSSION
In September 2016, Governor Jerry Brown signed Senate Bill (SB) 1383 into law, setting statewide methane reduction targets. The targets include requirements to reduce organic waste sent to landfills, such as food waste, paper products, and green waste, by 75 percent, and increase the rescue of edible food by 20 percent by 2025.

To achieve this goal, SB 1383 requires cities to implement the following actions by January 1, 2022: adopt a mandatory recycling ordinance; provide new organics recycling services to all residential, multi-family properties, and commercial businesses; develop an edible food recovery program; purchase organic materials and recycled content paper products; require franchise solid waste services provider to comply with SB 1383 through the City franchise agreement; and establish compliance, enforcement, education, and reporting programs.

In order to comply with SB 1383 requirements, to expand programing and services, and due to the expiration of the current solid waste agreement, the City Council entered into a new exclusive franchise agreement for the collection of solid waste on August 17, 2021, with services commencing July 1, 2022. The agreement includes rates for existing and new services. As such, staff recommends the adoption of a resolution adjusting solid waste collection rates (Exhibit 1).

Typical Residential Bill Impact
The typical rate of a residential curbside cart customer will increase $0.37 per month, effective July 1, 2022. The rate adjustment is based on the actual cost to provide services.

When compared to neighboring cities, the typical Santa Ana customer will continue to pay City Council 40 – 1 5/17/2022
Adopt Resolution Adjusting Solid Waste Rates
May 17, 2022

Page 2 ends

Santa Ana City CouncilMay 17, 2022

Santa Ana City Council
May 17, 2022