Agenda packet — Santa Ana City Council, June 21, 2022 (part 13 of 15)

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 Senior Loan following the Conversion Date and the purchase by Permanent Lender of the Senior Loan and any amendments or additional EXHIBIT 7
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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.

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 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 EXHIBIT 7
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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 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.

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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 (prior to the Conversion Date):

U.S. Bank National Association
1307 Washington Avenue
Suite 300
St. Louis, Missouri 63103
Attention: Director of LIHTC Asset Management
With a copy to:

California Community Reinvestment Corporation
100 W. Broadway
Suite 1000
Glendale, California 91210
Attention: President
SENIOR LENDER (from and after the Conversion Date):

California Community Reinvestment Corporation
100 W. Broadway
Suite 1000
Glendale, California 91210
Attention: President
SUBORDINATE LENDER:

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

City of Santa Ana
City Attorney
20 Civic Center Plaza
7 th 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.

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.

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(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 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:

U.S. BANK NATIONAL ASSOCIATION,
a national banking association
By: ________________________________
Jennifer L. Stolen
Vice President
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BORROWER:

WASHINGTON SANTA ANA HOUSING PARTNERS, L.P.,
a California limited partnership
By: Related/Washington Santa Ana Development Co., LLC,
a California limited liability company,
its Administrative General Partner
By: ____________________________________
Frank Cardone
President
By: Supportive Housing LLC,
a California limited liability company,
its Managing General Partner
By: A Community of Friends,
a California nonprofit public benefit corporation,
its sole member/manager
By: ____________________________________
Dora Leong Gallo
President and Chief Executive Officer
Address:

Washington Santa Ana Housing Partners, L.P.
c/o The Related Companies of California LLC
18201 Von Karman Avenue
Suite 900
Irvine, California 92612
Attention: Frank Cardone
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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: _________________________________
June 9, 2022
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EXHIBIT A
Legal Description
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Exhibit A
Legal Description (After Lot Merger)
PARCEL 1:

THAT PORTION OF THE RANCHO SANTIAGO DE SANTA ANA IN THE CITY OF

SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA PER MAP RECORDED IN BOOK 3 PAGE 420 OF PATENTS, RECORDS OF LOS ANGELES COUNTY IN THE

OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST TERMINUS OF THAT CERTAIN COURSE ON THE

SOUTHWEST LINE OF SAID LAND SHOWN AS HAVING A BEARING AND DISTANCE OF “NORTH 60°05’57” EAST 133.86 FEET” PER RECORD OF SURVEY NO. 2002-1059 RECORDED IN BOOK 194 PAGES 28 THROUGH 36 OF RECORD OF SURVEYS IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA; THENCE ALONG SAID SOUTHWEST LINE NORTH 60°05'57" EAST, 133.81 FEET; THENCE NORTH 64°53'54" EAST, 193.71 FEET;
THENCE NORTH 21°00'44" WEST, 62.74 FEET;
THENCE NORTH 21°00'43" WEST, 224.19 FEET;
THENCE NORTH 32°46'09" WEST, 150.43 FEET TO THE BEGINNING OF A NONTANGENT CURVE, CONCAVE NORTHERLY AND HAVING A RADIUS OF 45.00 FEET, A RADIAL LINE TO SAID BEGINNING OF CURVE BEARS NORTH 82°28'26" EAST; THENCE SOUTHERLY ALONG SAID CURVE, 166.04 FEET, THROUGH A CENTRAL ANGLE OF 211°24'37" TO THE BEGINNING OF A REVERSE CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 71.00 FEET, A RADIAL LINE TO SAID BEGINNING OF CURVE BEARS SOUTH 66°06'57" EAST;
THENCE NORTHEASTERLY ALONG SAID CURVE, 52.77 FEET, THROUGH A CENTRAL ANGLE OF 42°35'14";
THENCE NORTH 55°21'04" WEST, 25.14 FEET;
THENCE SOUTH 00°16'37" WEST, 621.36 FEET TO THE POINT OF BEGINNING.

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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.

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

WITNESS my hand and official seal.

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

WITNESS my hand and official seal.

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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

County of Orange
OC Community Resources/
Housing & Community Development
1501 E. St. Andrew Place, 1st Floor,
Santa Ana, CA 92705
Attn: Director
_______________________________________________________________________________

SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is entered into as of June ___, 2022 by and among (i) COUNTY OF ORANGE, a political subdivision of the state of California, (the "County") (ii) CITY OF SANTA ANA, a charter city and municipal corporation (the "Subordinate Lender"), and (iii) WASHINGTON SANTA ANA HOUSING PARTNERS, L.P., a California limited partnership (the "Borrower").

Recitals
A. The County has made or is making a loan (the "Senior Mortgage Loan") to the Borrower in the original principal amount of $2,280,701. The Senior Mortgage Loan is or will be secured by a senior mortgage lien (the "Senior Mortgage") on a multifamily housing project known as Crossroads at Washington, located in the City of Santa Ana, CA (the "Property”) and as more fully described in Exhibit “A” attached hereto. The Borrower's obligation to repay the Senior Mortgage Loan is evidenced by a Promissory Note of even date herewith (the "Senior Mortgage Note").

B. The Borrower has obtained two (2) loans from Subordinate Lender totaling $4,644,909 as follows: a loan of HOME Investment Partnerships Program (HOME) funds totaling $3,007,489; and a loan from the City of Santa Ana Neighborhood Stabilization Program totaling $1,637,420 (collectively, the "Subordinate Loans") which Subordinate Loans will be secured by, among other things, two mortgage liens against the Property.

D. The County has agreed to permit the Subordinate Loans to remain as subordinate mortgage liens against the Property subject to all of the conditions contained in this Agreement.

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E. The Subordinate Lender has agreed to subordinate its mortgage liens to the lien of the Senior Mortgage.

NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference and made a part of this Agreement, the County, the Subordinate Lender and the Borrower agree as follows:

1. 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 (the term "control" for these purposes shall mean the ability, whether by the ownership of shares or other equity interests, by contract or otherwise, to elect a majority of the directors of a corporation, to make management decisions on behalf of, or independently to select the managing partner of, a partnership, or otherwise to have the power independently to remove and then select a majority of those individuals exercising managerial authority over an entity, and control shall be conclusively presumed in the case of the ownership of 50% or more of the equity interests). "Borrower" means Washington Santa Ana Housing Partners, L.P and any other Person (other than the County) who acquires title to the Property after the date of this Agreement.
"Business Day" means any day other than Saturday, Sunday or a day on which the County or Subordinate Lender is not open for business.
"County" means the County of Orange a political subdivision of the state of California.

"Default Notice" means: (a) a copy of the written notice from the County to the Borrower stating that a Senior Mortgage Loan Default has occurred under the Senior Mortgage Loan; or (b) a copy of the written notice from the Subordinate Lender to the Borrower stating that a Subordinate Loan Default has occurred under one or both of the Subordinates Loan, or that a Regulatory Agreement Default has occurred under the County Regulatory Agreement. Each Default Notice shall specify the default upon which such Default Notice is based.
"Person" means an individual, estate, trust, partnership, corporation, limited liability company, limited liability partnership, governmental department or agency or any other entity EXHIBIT 8
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which has the legal capacity to own property.
"Regulatory Agreement Default" means a default by the Borrower in performing or observing any of the terms, covenants or conditions in the County Regulatory Agreement to be performed or observed by it, which continues beyond any applicable period provided in the County Regulatory Agreement for curing the default
"Senior Mortgage Loan Default" means the occurrence of either a default by the Borrower in performing or observing any of the terms, covenants or conditions in the Senior Mortgage Loan Documents to be performed or observed by it, which continues beyond any applicable period provided in the Senior Mortgage Loan Documents for curing the default, or an "Event of Default" as that term is defined in the Senior Mortgage Loan Documents. "Senior Mortgage Loan Documents" means the Senior Mortgage Note and all other documents evidencing, securing or otherwise executed and delivered in connection with the Senior Mortgage Loan.
"Subordinate Lender" means the City of Santa Ana, a charter city and municipal corporation, and any other Person who becomes the legal holder of the Subordinate Notes after the date of this Agreement.
"Subordinate Loan Default" means a default by the 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 Notes, the Subordinate Mortgages, and all other documents evidencing, securing or otherwise executed and delivered in connection with the Subordinate Loans.
"Subordinate Mortgages" means the mortgages or deeds of trust encumbering the Property as security for the Subordinate Loans, which were previously recorded in the applicable land records.
"Subordinate Notes" means the promissory notes issued by the Borrower to the Subordinate Lender, or order, to evidence the Subordinate Loans.

2. Permission to Place Mortgage Lien Against Property.

The County has agreed and hereby consents to, notwithstanding the prohibition against inferior liens on the Property contained in the Senior Mortgage Loan Documents and subject to the provisions of this Agreement, the Subordinate Mortgages and other recordable Subordinate Loan EXHIBIT 8
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Documents against the Property (which are subordinate in all respects to the lien of the Senior Mortgage) which secure the Borrower's obligation to repay the Subordinate Notes and all other obligations, indebtedness and liabilities of the Borrower to the Subordinate Lender under and in connection with the Subordinate Loans. Such consent is subject to the condition that each of the representations and warranties made by the Borrower and the Subordinate Lender in Section 3 are true and correct as of the date of this Agreement. If any of the representations and warranties made by the Borrower and the Subordinate Lender in Section 3 is not true and correct as of the date of this Agreement, the provisions of the Senior Mortgage Loan Documents applicable to unpermitted liens on the Property shall apply.

3. Borrower's and Subordinate Lender's Representations and Warranties.

A. The Borrower and the Subordinate Lender each makes the following representations and warranties to the County:
(a) Relationship of Borrower to Subordinate Lender and Borrower.

The Subordinate Lender is not an Affiliate of the Borrower and is not in possession of any facts that would lead it to believe that the Subordinate Lender is an Affiliate of the Borrower.

B. The Borrower makes the following representations and warranties to the County and the Subordinate Lender:
(a) Subordinate Loan Documents. The executed Subordinate Loan Documents are substantially in the same forms as those submitted to, and approved by, County prior to the date of this Agreement. Borrower shall deliver to County an executed copy of each of the Subordinate Loan Documents, certified to be true, correct and complete. (b) Senior Loan Documents. The executed Senior Loan Documents are substantially in the same forms as, when applicable, those submitted to Subordinate Lender prior to the date of this Agreement. 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.

4. Terms of Subordination.
(a) Subordinate Lender Agreement to Subordinate. The County and the Subordinate Lender agree that: (i) 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 Mortgage Loan Documents, and (ii) 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 Mortgage and the other Senior Mortgage EXHIBIT 8
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Loan Documents and to all advances heretofore made or which may hereafter be made pursuant to the Senior Mortgage and the other Senior Mortgage Loan Documents (including but not limited to, all sums advanced for the purposes of (1) protecting or further securing the lien of the Senior Mortgage, curing defaults by the Borrower under the Senior Mortgage Loan Documents or for any other purpose expressly permitted by the Senior Mortgage, or (2) constructing, renovating, repairing, furnishing, fixturing or equipping the Property). (b) Subordinate Lender Subordination of Subrogation Rights. The Subordinate Lender agrees that if, by reason of its payment of real estate taxes or other monetary obligations of the Borrower, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents, it acquires by right of subrogation or otherwise a lien on the Property which (but for this subsection) would be senior to the lien of the Senior Mortgage, then, in that event, such lien shall be subject and subordinate to the lien of the Senior Mortgage.
(c) Payments Before Senior Mortgage Loan Default. Until the Subordinate Lender receives a Default Notice of a Senior Mortgage Loan Default from the County, the 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 Mortgage Loan Default. The Borrower agrees that, after it receives notice (or otherwise acquires knowledge) of a Senior Mortgage 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, attorney's fees, or any other sums secured by the Subordinate Mortgage) without the County's prior written consent. The Subordinate Lender agrees that, after it receives a Default Notice from the County with written instructions directing the Subordinate Lender not to accept payments from the Borrower on account of the Subordinate Loans, it will not accept any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorney's fees, or any other sums secured by the Subordinate Mortgages) without the County's prior written consent. If the Subordinate Lender receives written notice from the County that the Senior Mortgage Loan Default which gave rise to the Subordinate Lender's obligation not to accept payments has been cured, waived, or otherwise suspended by the County, the restrictions on payment to the Subordinate Lender in this Section 4 shall terminate, and the County shall have no right to any subsequent payments made to the Subordinate Lender by the Borrower prior to the Subordinate Lender's receipt of a new Default Notice from the County in accordance with the provisions of this Section 4(d). (e) Remitting Subordinate Loan Payments to County. If, after the Subordinate Lender receives a Default Notice from the County in accordance with subsection (d) above, the Subordinate Lender receives any payments under the Subordinate Loan Documents, the EXHIBIT 8
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Subordinate Lender agrees that such payment or other distribution will be received and held in trust for the County and unless the County otherwise notifies the Subordinate Lender in writing, will be promptly remitted, in kind to the County, properly endorsed to the County, to be applied to the principal of, interest on and other amounts due under the Senior Mortgage Loan Documents in accordance with the provisions of the Senior Mortgage Loan Documents.

By executing this Agreement, the Borrower specifically authorizes the Subordinate Lender to endorse and remit any such payments to the County, and specifically waives any and all rights to have such payments returned to the Borrower or credited against the Subordinate Loans.

Borrower and County acknowledge and agree that payments received by the Subordinate Lender, and remitted to the County under this Section 4, shall not be applied or otherwise credited against the Subordinate Loans, nor shall the tender of such payment to the County waive any Subordinate Loan Default which may arise from the inability of the Subordinate Lender to retain such payment or apply such payment to the Subordinate Loans. (f) Subordinate Lender Agreement Not to Commence Bankruptcy Proceeding. The 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 with respect to the Borrower, without the County's prior written consent.

5. Default Under Subordinate Loan Documents.
(a) Notice of Default and Cure Rights. The Subordinate Lender shall deliver to the County a Default Notice within five (5) Business Days in each case where the Subordinate Lender has given a Default Notice to the Borrower. Failure of the Subordinate Lender to send a Default Notice to the County shall not prevent the exercise of the Subordinate Lender's rights and remedies under the Subordinate Loan Documents, subject to the provisions of this Agreement. The County shall have the right, but not the obligation, to cure any Subordinate Loan Default or Regulatory Agreement Default (as applicable) within sixty (60) days following the date of such notice; provided, however that the Subordinate Lender shall be entitled, during such sixty (60) day period, to continue to pursue its rights and remedies under the Subordinate Loan Documents. All amounts paid by the County in accordance with the Senior Mortgage Loan Documents to cure a Subordinate Loan Default or Regulatory Agreement Default (as applicable) shall be deemed to have been advanced by the County pursuant to, and shall be secured by the lien of, the Senior Mortgage. (b) Subordinate Lender's Exercise of Remedies After Notice to County. If a Subordinate Loan Default or Regulatory Agreement Default occurs and is continuing, the Subordinate Lender agrees that, without the County's prior written consent, it will not commence foreclosure proceedings with respect to the Property under the Subordinate Loan EXHIBIT 8
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Documents or exercise any other rights or remedies it may have under the Subordinate Loan Documents, including, but not limited to accelerating one or both of the Subordinate Loans, collecting rents, appointing (or seeking the appointment of) a receiver or exercising any other rights or remedies thereunder unless and until it has given the County at least sixty (60) days' prior written notice; during such sixty (60) day period, however, the Subordinate Lender shall be entitled to exercise and enforce all other rights and remedies available to the Subordinate Lender under the Subordinate Loan Documents and/or under applicable laws. (c) Cross Default. The Borrower and the Subordinate Lender agree that any of a Subordinate Loan Default, or Regulatory Agreement Default shall constitute a Senior Mortgage Loan Default under the Senior Mortgage Loan Documents and the County shall have the right to exercise all rights or remedies under the Senior Mortgage Loan Documents in the same manner as in the case of any other Senior Mortgage Loan Default. If the Subordinate Lender notifies the County in writing that any Subordinate Loan Default or Regulatory Agreement Default of which the County has received a Default Notice has been cured or waived, as determined by the Subordinate Lender in its sole discretion, then provided that County has not conducted a sale of the Property pursuant to its rights under the Senior Mortgage Loan Documents, any Senior Mortgage Loan Default under the Senior Mortgage Loan Documents arising solely from such Subordinate Loan Default or Regulatory Agreement Default shall be deemed cured, and the Senior Mortgage Loan shall be reinstated, provided, however, that the County shall not be required to return or otherwise credit for the benefit of the Borrower any default rate interest or other default related charges or payments received by the County during such Senior Mortgage Loan Default.

6. Default Under Senior Mortgage Loan Documents.
(a) Notice of Default and Cure Rights. The County shall deliver to the Subordinate Lender a Default Notice within five (5) Business Days in each case where the County has given a Default Notice to the Borrower. Failure of the County to send a Default Notice to the Subordinate Lender shall not prevent the exercise of the County'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 Mortgage Loan Default within sixty (60) days following the date of such notice; provided, however, that the County shall be entitled during such sixty (60) day period to continue to pursue its remedies under the Senior Mortgage Loan Documents. Subordinate Lender may have up to ninety (90) days from the date of the Default Notice to cure a non-monetary default if during such ninety (90) day period Subordinate Lender keeps current all payments required by the Senior Mortgage Loan Documents. In the event that such a non-monetary default creates an unacceptable level of risk relative to the Property, or County's secured position relative to the Property, as determined by County in its sole discretion, then County may exercise during such ninety (90) day period all available rights and remedies to protect and preserve the Property and the rents, revenues and other proceeds from the Property. All EXHIBIT 8
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amounts paid by the Subordinate Lender to the County to cure a Senior Mortgage 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. The Subordinate Lender agrees that, notwithstanding any contrary provision contained in the Subordinate Loan Documents, a Senior Mortgage Loan Default shall not constitute a default under the Subordinate Loan Documents if no other default occurred under the Subordinate Loan Documents until either (i) the County has accelerated the maturity of the Senior Mortgage Loan, or (ii) the County has taken affirmative action to exercise its rights under the Senior Mortgage 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 Mortgage. At any time after a Senior Mortgage Loan Default is determined to constitute a default under the Subordinate Loan Documents, the 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 the Borrower cures any Senior Mortgage Loan Default to the satisfaction of the County, as evidenced by written notice from the County to the Subordinate Lender, any default under the Subordinate Loan Documents arising from such Senior Mortgage Loan Default shall be deemed cured and the Subordinate Loans shall be retroactively reinstated as if such Senior Mortgage Loan Default had never occurred.

7. Conflict.

The Borrower, the County and the Subordinate Lender each agrees that, in the event of any conflict or inconsistency between the terms of the Senior Mortgage Loan Documents, the Subordinate Loan Documents, and the terms of this Agreement, the terms of this Agreement shall govern and control solely as to the following: (a) the relative priority of the security interests of the County and the Subordinate Lender in the Property; (b) the timing of the exercise of remedies by the County and the Subordinate Lender under the Senior Mortgage and the the Subordinate Mortgages, respectively; and (c) solely as between the County and the Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which the County and the 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 Mortgage Loan Default or Subordinate Loan Default, as the case may be; give the Borrower the right to notice of any Senior Mortgage Loan Default or Subordinate Loan Default, as the case may be other than that, if any, provided, respectively under the Senior Mortgage Loan Documents, the Subordinate Loan Documents; or create any other right or benefit for Borrower as against County or Subordinate Lender.

8. Rights and Obligations of the Subordinate Lender Under the Subordinate Loan Documents and of the County under the Senior Mortgage Loan Documents.

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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. The Subordinate Lender shall not, without the prior written consent of the County 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 the Subordinate Lender shall have the right to advance funds to cure Senior Mortgage Loan Defaults pursuant to Section 6(a) above and advance funds pursuant to the Subordinate Mortgages for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Property and curing other defaults by the Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of: a taking or threatened taking by condemnation or other exercise of eminent domain of all or a portion of the Property (collectively, a "Taking"); or the occurrence of a fire or other casualty resulting in damage to all or a portion of the Property (collectively, a "Casualty"), at any time or times when the Senior Mortgage remains a lien on the Property the following provisions shall apply:
(1) The Subordinate Lender hereby agrees that its rights (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Taking and/or a Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a Taking or a Casualty shall be and remain subordinate in all respects to the County's rights under the Senior Mortgage Loan Documents with respect thereto, and the Subordinate Lender shall be bound by any settlement or adjustment of a claim resulting from a Taking or a Casualty made by the County; provided, however, this subsection and/or anything contained in this Agreement shall not limit the rights of the Subordinate Lender to file any pleadings, documents, claims or notices with the appropriate court with jurisdiction over the proposed Taking and/or Casualty; and
(2) All proceeds received or to be received on account of a Taking 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 Mortgage Loan) in the manner determined by the County in its sole discretion; provided, however, that if the County elects to apply such proceeds to payment of the principal of, interest on and other amounts payable under the Senior Mortgage Loan, any proceeds remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the Senior Mortgage Loan shall be paid to, and may be applied by, the Subordinate Lender in accordance with the applicable provisions of the Subordinate Loan Documents, provided however, the County agrees to consult with the Subordinate Lender in determining the application of Casualty proceeds, provided further however that in the event of any disagreement between the County and the Subordinate Lender over EXHIBIT 8
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the application of Casualty proceeds, the decision of the County, in its sole discretion, shall prevail.
(c) No Modification of Subordinate Loan Documents. The Borrower and the Subordinate Lender each agrees that, until the principal of, interest on and all other amounts payable under the Senior Mortgage Loan Documents have been paid in full, it will not, without the prior written consent of the County in each instance, increase the amount of the Subordinate Loans, increase the required payments due under the Subordinate Loans, decrease the term of the Subordinate Loans, increase the interest rate on the Subordinate Loans, or otherwise amend the terms of the Subordinate Loans in a manner that creates an adverse effect upon the County under the Senior Mortgage Loan Documents. Any unauthorized amendment of the Subordinate Loan Documents or assignment of the Subordinate Lender's interest in the Subordinate Loans without the County's consent shall be void ab initio and of no effect whatsoever.

9. Modification or Refinancing of Senior Mortgage Loan.

Subject to the final sentence hereof, the Subordinate Lender consents to any agreement or arrangement in which the County waives, postpones, extends, reduces or modifies any provisions of the Senior Mortgage Loan Documents, including any provision requiring the payment of money.

Subordinate Lender further agrees that its agreement to subordinate hereunder shall extend to any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Mortgage Loan (including reasonable and necessary costs associated with the closing and/or the refinancing); 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 Mortgage Loan, the Senior Mortgage Note, the Senior Mortgage, the Senior Mortgage Loan Documents and County shall mean, respectively, the refinance loan, the refinance note, the mortgage securing the refinance note, all documents evidencing securing or otherwise pertaining to the refinance note and the holder of the refinance note.

Notwithstanding anything to the contrary in this Section 9, the County shall not, without the prior written consent of the Subordinate Lender in each instance, which will not be unreasonably withheld, take any action which has the effect of increasing the indebtedness outstanding under, or secured by, the Senior Mortgage Loan Documents, increasing the required payments due under the Senior Mortgage Loan, decreasing the term of the Senior Mortgage Loan, or increasing the interest rate on the Senior Mortgage Loan (other than on account of regular fluctuations in the variable interest rate on the Senior Mortgage Loan or in connection with charging default rate of interest following a Senior Mortgage Loan Default), except that the Senior Lender shall have the right to advance funds to cure Subordinate Loan Defaults pursuant to Section 5(a), above, and advance funds pursuant to the Senior Mortgage Loan Documents for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Property, curing other defaults by Borrower under the Senior Mortgage Loan Documents, or protecting the Senior Lender’s security interest in the Property.

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10. Default by the Subordinate Lender or County.

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

11. 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 County 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 next Business Day 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 (2) days after mailing in the United States), addressed to the respective parties as follows:

COUNTY:

County of Orange
OC Community Resources/
Housing & Community Development
1501 E. St. Andrew Place, 1st Floor,
Santa Ana, CA 92705
Attn: Director
SUBORDINATE LENDER:

City of Santa Ana
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P .0. Box 1988
Santa Ana, California 92702
BORROWER:

Washing Santa Ana Housing Partners, L.P.
c/o The Related Companies of California, LLC
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18201 Von Karman Avenue, Suite 900
Irvine, CA 92612
Attention: President
c/o A Community of Friends
3701 Wilshire Boulevard, Suite 700
Los Angeles, CA 90010
Attention: Dora Leong Gallo, President and Chief
Executive Officer
With copy to: Bocarsly Emden Cowan Esmail & Arndt, LLP
633 West Fifth Street, 64th Floor
Los Angeles, California 90071
Attention: Nicole Deddens, Esq.

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.

12. General.
(a) Assignment/Successors. This Agreement shall be binding upon the Borrower, the County and the Subordinate Lender and shall inure to the benefit of the respective legal successors and assigns of the County and the Subordinate Lender. (b) No Partnership or Joint Venture. The County's permission for the placement of the Subordinate Loan Documents does not constitute the County as a joint venturer or partner of the Subordinate Lender. Neither party hereto shall hold itself out as a partner, agent or Affiliate of the other party hereto.
(c) County's and Subordinate Lender's Consent. Wherever the County's consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by the County in its sole and absolute discretion, unless otherwise expressly provided in this Agreement. Wherever the Subordinate Lender's consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by the Subordinate Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement.
(d) Further Assurances. The Subordinate Lender, the County and the Borrower each agree, at the 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 (i) evidence that the Subordinate Mortgages are subordinate to the lien, covenants and conditions of the EXHIBIT 8
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Senior Mortgage or (ii) 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 State of California.
(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) Term. The term of this Agreement shall commence on the date hereof and shall continue until the earliest to occur of the following events: (i) the payment of all of the principal of, interest on and other amounts payable under the Senior Mortgage Loan Documents; (ii) the payment of all of the principal of, interest on and other amounts payable under the Subordinate Loan Documents, other than by reason of payments which the Subordinate Lender is obligated to remit to the County pursuant to Section 4 hereof; (iii) the acquisition by the County of title to the Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the Senior Mortgage; or (iv) the acquisition by the Subordinate Lender of title to the Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, one of the Subordinate Mortgages, but only if such acquisition of title does not violate any of the terms of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.
- SIGNATURE PAGES FOLLOW -
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COUNTY:

COUNTY OF ORANGE, a political subdivision of the state of California
By:____________________________________
Julia Bidwell, OC Community Resources,
Housing and Community Development

APPROVED AS TO FORM

COUNTY COUNSEL

ORANGE COUNTY, CALIFORNIA
By
Deputy
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BORROWER:

WASHINGTON SANTA ANA HOUSING, L.P.,
a California limited partnership,
By: Related/Washington Santa Ana
Development Co., LLC, a California
limited liability company,
its Administrative General Partner
By:

Frank Cardone, President
By: Supportive Housing LLC, a California
limited liability company, its Managing
General Partner
By: A Community of Friends, a
California nonprofit public benefit
corporation, its sole
member/manager
By: _____
Dora Leong Gallo
President and CEO
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SUBORDINATE LENDER
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
June 9, 2022
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Exhibit A
Legal Description (After Lot Merger)
PARCEL 1:

THAT PORTION OF THE RANCHO SANTIAGO DE SANTA ANA IN THE CITY OF

SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA PER MAP RECORDED IN BOOK 3 PAGE 420 OF PATENTS, RECORDS OF LOS ANGELES COUNTY IN THE

OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST TERMINUS OF THAT CERTAIN COURSE ON THE

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FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 6103 & 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

SPACE ABOVE THIS LINE FOR RECORDING USE

FREE RECORDING REQUESTED
[Government Code Section 6103]

DEVELOPMENT IMPACT FEE DEFERRAL AGREEMENT
between

THE CITY OF SANTA ANA
a charter city and municipal corporation of the State of California and
Washington Santa Ana Housing Partners, L.P.
a California limited partnership
[Dated as of June 21, 2022]
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DEVELOPMENT IMPACT FEE DEFERRAL AGREEMENT

1. PARTIES AND EFFECTIVE DATE.

This Development Impact Fee Deferral Agreement (“Agreement”) is entered into on this 21st day of June, 2022, by and between the City of Santa Ana, a charter city and municipal corporation of the State of California (“City”), and Washington Santa Ana Housing Partners, L.P., a California limited partnership (“Owner”). City and Owner are sometimes individually referred to herein as “Party” and collectively as “Parties.”

2. RECITALS.

2.1 Owner is the owner of a leasehold interest in that certain real property in the City of Santa Ana, California, that includes land owned by both the Housing Authority of the City of Santa Ana, a public body, corporate and politic, and the County of Orange, and more particularly described in Exhibit “A” attached hereto and incorporated herein by this reference and as evidenced by that certain Memoranda of Lease between _____, which was recorded in the Official Records of Orange County, California on _____, as Document No. ____ (“Property”).

The Housing Authority and the County of Orange have executed a Joint Powers Agreement to provide a combined site for the project that includes both the Housing Authority property and the County of Orange property, which will be combined and owned as tenants in common. Owner is the developer of the affordable rental residential community at 1126, 1136, & 1146 East Washington Avenue, Santa Ana, CA 92701, (APNs 398-092-14 and 398-092-13) consisting of 85 new affordable units and 1 manager’s unit, with 42 two, three- and four-bedroom units for large families, and 43 studio, one- and two-bedroom affordable units for persons experiencing homelessness. 100% of the units will be for extremely low-income households at 30% Area Median Income. Owner has received City approval and is in the process of obtaining the building permits;

2.2 Prior to issuance of any building permits, the City currently requires the payment of various development impact fees for all residential projects to help address the impacts of new development;

2.3 On May 11, 2022, Owner submitted a written request formally requesting the deferral of specific development impact fees for the Property pursuant to California Government Code section 66007; and,

2.4 City and Owner desire to execute this Agreement to defer certain development impact fees applicable to the Property and place a lien on the Property to secure payment of these fees, pursuant to the terms and conditions set forth herein.

3. TERMS.

3.1 Deferral of Development Impact Fees.

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3.1.1 Deferral of Development Impact Fees. City and Owner agree that the development impact fees (“Subject Fee(s)”) and amount as shown on Exhibit “B,” for the Property ordinarily due before issuance of a building permit for any new affordable residential units on the Property (including manager’s units) will be deferred until immediately prior to the final inspection or issuance of a certificate of occupancy for any new residential units on the Property, whichever occurs first (“Deferral Period”). City and Owner acknowledge and agree that the City Council may, in its sole and absolute discretion and during a regular, regular adjourned, or special meeting of the City Council, extend the deadline for payment of the Subject Fees without obtaining the approval of Owner or an amendment or modification of this Agreement. Any extension granted by the City Council pursuant to this Section 3.1.1 shall automatically be deemed to be part of the Deferral Period for purposes of this Agreement.

3.1.2 Payment of Subject Fees. Owner, or its successor in interest to the Property or any portion thereof, shall be liable for the payment of the Subject Fees pursuant to this Agreement. The Subject Fees for a residential building constructed on the Property shall be due and payable at the termination of the Deferral Period. No certificate of occupancy shall be issued for the building, any portion, or any residential units thereof on the Property unless and until all Subject Fees ordinarily required to have been paid absent this Agreement have been paid in full.

3.1.3 Subject Fee Amount. Except as may otherwise be provided for by a statutory development agreement for the Property, as approved by the City, the amount of the Subject Fee for each residential unit to be developed on the Property shall be determined according to the rate of the Subject Fee adopted by the City and in effect on the date when the building permit for the residential building is issued by the City. Upon issuance of each building permit, the City shall complete and attach the form set forth in Exhibit “B” to this Agreement to reflect the amount of the Subject Fee applicable at the time of issuance of that building permit and attach a copy of the building permit, which shall collectively thereafter be incorporated as part of this Agreement.

3.1.4 Obligation for Payment of Subject Fee. Owner hereby acknowledges and agrees that Owner’s obligation to pay the Subject Fees shall continue and remain an obligation of Owner, or any successors in interest of Owner, including, without limitation, any successor in interest to the Property or any portion of the Property. Without limiting the nature of the foregoing, any Subject Fees that remain unpaid following the time that they are required to be paid may be collected by the City as a personal obligation of the Owner, or any successor of Owner, as a special assessment against the property (collected at the same time and in the same manner as ad valorem property taxes), or by any combination of the foregoing.

3.2 Covenant of Owner. Owner covenants that he, she or it is eligible to enter into this Agreement and has fulfilled the requirements for approval of deferral of the Subject Fees.

Should Owner and/or the Property be deemed at any time prior or subsequent to execution of this Agreement to be ineligible for a deferral of Subject Fees regardless of whether Owner intentionally or unintentionally misrepresented to the City that Owner was eligible for a deferral of Subject Fees, City may terminate this Agreement and require all Subject Fees ordinarily required to have been paid absent this Agreement to be immediately paid in full.

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3.3 Recordation of Agreement. Upon the execution of this Agreement, the City shall cause this Agreement to be recorded in the Official Records of the County of Orange, California.

All costs assessed by the County of Orange for recordation of this Agreement shall be paid by the Owner.

3.4 Lien against Property. From and after its execution, this Agreement shall contractually bind Owner to pay all Subject Fees as provided in this Agreement, and shall constitute a lien against the Property in an amount equal to the total Subject Fees, pursuant to Government Code section 66007(c)(2). Upon payment to City of the total amount of the Subject Fees for the Property, City shall, at the request of the Owner, execute and record in the Official Records of the County of Orange, California, a release of the lien from the Property in substantially the form of Exhibit “C” which is attached hereto and incorporated herein by this reference. At the request of the Owner, the City shall deliver a copy of the executed and recorded release of the lien to Owner. No partner of Owner shall have any personal liability for the payment of any Subject Fees.

3.5 Breach Won't Defeat Lien. The breach of any of the provisions of this Agreement, or any lien (or a foreclosure thereof) pursuant to this Agreement, shall not defeat or render invalid the lien of any duly recorded mortgage or deed of trust encumbering the Property or any portion thereof which is/are made in good faith and for value, provided that all provisions of this Agreement shall be binding and effective against any owner operating the Property who acquires the Property by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.

3.6 Covenants Run With Land. Notwithstanding Section 3.6, each and all of the promises, covenants and conditions of this Agreement and all liens against the Property subject to this Agreement shall, as provided in Government Code section 66007, run with the Property and shall be binding upon a party upon having or acquiring any right, title or interest in or to the Property or any portion thereof.

3.7 Sale of Property. Pursuant to Government Code section 66007(c)(3), Owner shall notify City in writing within three (3) business days of the sale or transfer of all or any portion of the Property by Owner.

3.8 Invalidity of Lien. The invalidity or unenforceability of any lien provided for under this Agreement shall not affect the contractual obligation of Owner to pay any and all Subject Fees for the Property, nor shall the sale, lease or any encumbrance of the Property release the Owner of this contractual obligation.

3.9 Rights Not Granted Under Agreement. This Agreement is not, and shall not be construed to be, an approval or a granting of any right or entitlement (vested or otherwise) by City concerning any development on the Property, or any other project, development or other construction by Owner within the City. This Agreement does not, and shall not be construed to, exempt Owner from paying any fees for any entitlements, permits, licenses or other approvals that may be required by the City or other public entity with jurisdiction over the Property at the time required by the City or other public entity with jurisdiction over the Property, or any other project development or other construction by Owner. This Agreement does not, and shall not be construed to, exempt Owner from any requirement to obtain permits or other discretionary or EXHIBIT 9
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non-discretionary approvals as may be necessary for the development, maintenance or operation of the development on the Property or any other project, development or other construction by Owner within the City. This Agreement does not, and shall not be construed to, exempt Owner or the Property from the application or exercise of the City’s or any of its related agencies’ power of eminent domain or its police powers, including, but not limited to, the regulation of land uses, and the taking of any actions necessary to protect the health, safety and welfare.

3.10 Cumulative Remedies. The rights or remedies of the City, as provided in this Agreement, or pursuant to any applicable laws, rules or regulations, may be pursued singly, successively, together or otherwise against the Property, Owner or its transferees, at the sole discretion of the City. The City’s failure to exercise any such right or remedy shall in no event be construed as a waiver or release of such rights or remedies, or of the right to exercise them at any later time.

3.11 Indemnification. Owner agrees to indemnify, defend and hold harmless the City, its elected officials, officers, agents and employees from and against all claims, demands, costs, damages, liabilities and obligations of any kind or nature arising out of the deferral provided by the City to Owner, this Agreement, or both, including without limitation, all costs of collection, including actual attorneys’ and expert witness fees.

3.12 Successors and Assigns. Owner may not assign this Agreement, in whole or in part, without the prior written consent of the City, which may be given, withheld or conditioned in the City’s sole and absolute discretion. Any attempt to assign this Agreement without the City’s prior written consent shall be null and avoid. This Agreement shall be binding on any and all permitted successors and assigns of Owner.

3.13 Governing Laws. This Agreement shall be governed by the laws of the State of California, without regard to the conflict of laws principles. The Superior Courts of the State of California in the County of Orange, California, shall have exclusive jurisdiction of any litigation between the City and Owner arising out of this Agreement. Owner hereby expressly waives the provisions of any federal or state law providing for a change of venue to any other state court or to federal district court, due to any reason whatsoever, including, without implied limitation, the fact that the City is a party to this Agreement, due to any diversity of citizenship between the City and Owner, or due to the fact that a federal question may be involved. Without limiting the generality of the foregoing, Owner expressly waives, to the maximum legal extent, the benefit of California Code of Civil Procedure Section 394 and all other state and federal statutes and judicial decisions of similar effect.

3.14 Notices. All notices required to be delivered under this Agreement or applicable law shall be delivered by personal delivery, express mail or by United States mail, certified, postage prepaid. Notices personally delivered or delivered by express mail shall be deemed received upon receipt. Notices delivered by certified mail shall be deemed received the earlier of three (3) days following deposit of such notice with the United States Postal Service or actual receipt. Notices shall be sent as follows:

To City: City of Santa Ana
Community Development Agency
EXHIBIT 9
City Council 68 – 396 6/21/2022
20 Civic Center Plaza (M-26)
P.O. Box 1988
Santa Ana, CA 92702-1988
Attention: Housing. Manager
With copy to: Office of City Attorney
City of Santa Ana
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702
To Owner: Washington Santa Ana Housing Partners, L.P.
c/o The Related Companies of California, LLC
19201 Von Karman Avenue, Suite 900
Irvine, CA 92612
Attention: President
c/o A Community of Friends
3701 Wilshire Boulevard, Suite 700
Los Angeles, CA 90010
Attention: Dora Leong Gallo
President and Chief Executive Officer
With a copy to:

Bocarsly Emden Cowan Esmail & Arndt LLP
633 W. 5th Street, 64th Floor
Los Angeles. CA 90071
Attention: Lance Bocarsly, Esq.

3.15 Attorneys’ Fees and Costs. Should the City or Owner bring any action or proceeding against the other, and if such action or proceeding is related to the interpretation or enforcement of this Agreement or in any way relates to or arises due to the existence of this Agreement, then the prevailing party in that action or proceeding shall be entitled to recover from the non-prevailing party, in addition to all other relief to which the prevailing party may be entitled, its actual litigation costs and attorneys’ and expert witness fees. The “prevailing party” shall be as determined by the court in accordance with the provisions of California Code of Civil Procedure Section 1032. Recoverable litigation costs and attorneys’ fees include those incurred by the prevailing party in the enforcement of any judgment or other judicial order, and during, the defense of any appeal taken from such underlying judgment or other judicial order.

3.16 Entire Agreement. This Agreement constitutes the entire agreement of City and Owner as to the deferral of impact fees and supersedes all previous agreements, oral or written, on the subject matter of this Agreement.

3.17 Modification. This Agreement may be amended or modified only by an agreement in writing signed by each of the parties hereto.

EXHIBIT 9
City Council 68 – 397 6/21/2022

3.18 Headings. Section headings contained in this Agreement are for convenience only, and shall not impact the construction or interpretation of any provision.

3.19 Severability. If any provision or clause of this Agreement or any application of it to any person, firm, organization, partnership or corporation is held invalid, such invalidity shall not affect any other provision of this Agreement, and the Agreement shall be construed as if such provisions or clauses did not exist.

3.20 Time is of the Essence. Time is of the essence in this Agreement.

3.21 No Third Party Beneficiaries. This Agreement and the performance of the City’s and Owner’s obligations hereunder are for the sole and exclusive benefit of the City and Owner. No person or entity who or which is not a signatory to this Agreement shall be deemed to be benefited or intended to be benefited by any provision hereof, and no such person or entity shall acquire any rights or causes of action against either the City or Owner hereunder as a result of the City’s or Owner’s performance or nonperformance of their respective obligations under this Agreement.

3.21 Counterparts. This Agreement may be signed by the Parties in different counterparts and the signature pages combined shall create a single document binding on all parties.
[Signatures on Following Page]
EXHIBIT 9
City Council 68 – 398 6/21/2022
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written.

OWNER
Washington Santa Ana Housing Partners, L.P.,
a California limited partnership
By: Related/Washington Santa Ana Development Co., LLC,
a California limited liability company,
its Administrative General Partner
By:________________________________
Frank Cardone, President
By: Supportive Housing LLC,
a California limited liability company,
its Managing General Partner
By:A Community of Friends,
a California nonprofit public benefit corporation,
its sole member/manager
By: ________________________________
Dora Leong Gallo,
President and Chief Executive Officer
EXHIBIT 9
City Council 68 – 399 6/21/2022
EXHIBIT 9
City Council 68 – 400 6/21/2022
ATTEST: CITY OF SANTA ANA
___________________________ _______________________
Daisy Gomez Kristine Ridge
Clerk of the Council City Manager
Dated: Dated:

PROPERTY OWNER:

HOUSING AUTHORITY OF THE CITY OF SANTA ANA
_______________________________
Steven A. Mendoza
Executive Director
APPROVED AS TO FORM:

SONIA R. CARVALHO, City Attorney
By: ________________________
Ryan O. Hodge
Assistant City Attorney
Dated:
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
June 9, 2022
EXHIBIT 9
City Council 68 – 401 6/21/2022
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

COUNTY OF
On , , before me,
(here insert name and title of the officer)
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)
EXHIBIT 9
City Council 68 – 402 6/21/2022
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

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)
EXHIBIT 9
City Council 68 – 403 6/21/2022
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

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)
EXHIBIT 9
City Council 68 – 404 6/21/2022
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

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)
EXHIBIT 9
City Council 68 – 405 6/21/2022
EXHIBIT “A” TO

DEVELOPMENT IMPACT FEE DEFERRAL AGREEMENT
Legal Description of Property
EXHIBIT 9
City Council 68 – 406 6/21/2022
Exhibit A
Legal Description (After Lot Merger)
PARCEL 1:

THAT PORTION OF THE RANCHO SANTIAGO DE SANTA ANA IN THE CITY OF

SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA PER MAP RECORDED IN BOOK 3 PAGE 420 OF PATENTS, RECORDS OF LOS ANGELES COUNTY IN THE

OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST TERMINUS OF THAT CERTAIN COURSE ON THE

EXHIBIT 9
City Council 68 – 407 6/21/2022
EXHIBIT “B” TO

DEVELOPMENT IMPACT FEE DEFERRAL AGREEMENT
Subject Fees for Building Permit No. ____
The following development impact fees imposed upon the Property or portion thereof by the city of Santa Ana upon issuance of City of Santa Ana Building Permit No. ___ shall be deferred pursuant to the terms and conditions of this Agreement:

Fee Description Factor Factor Total
Transit Zoning Code
Traffic Impact
Mitigation Fair Share
$1,333.54 per unit 86 Units $114,685
Drainage Area
Assessment Fee $7,748.21 per acre 2.286 Acres $17,712
Sewer Connection
Fee $49.00 per F.U. 562 F.U. (est.) $25,774
Park Acquisition and
Development Fee $400,448
Fire Facilities $0.94psf 100,104 SF $94,098
TOTAL $652,717
Calculations of the final fee amounts to be determined at the time of issuance of certificate of occupancy.

EXHIBIT 9
City Council 68 – 408 6/21/2022
Exhibit “C” TO

DEVELOPMENT IMPACT FEE DEFERRAL AGREEMENT
Form Release of Lien
[Attached behind this cover page]
EXHIBIT 9
City Council 68 – 409 6/21/2022

FREE RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 6103 & 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

SPACE ABOVE THIS LINE FOR RECORDING USE

FREE RECORDING REQUESTED
[Government Code Section 6103]

RELEASE OF LIEN FOR PAYMENT OF DEVELOPMENT IMPACT FEES
The City of Santa Ana, a charter city and municipal corporation of the State of California, does hereby release that leasehold interest in certain real property, as further described in Exhibit 1 attached to this Release, from the lien for payment of certain development impact fees as created by the Development Impact Fee Deferral Agreement entered into on __________, by and between the City of Santa Ana and Washington Santa Ana Housing Partners, L.P., a California limited partnership, which was recorded on ____________________, as Document Serial No. ________ in the Official Records of the County of Orange, California (“Agreement”).

This release pertains only to the property described above and does not extend to any other property(ies). This release of lien is executed and recorded pursuant to the provisions of California Government Code section 66007.

Dated: ____________________

CITY OF SANTA ANA
By: _____________________
City Manager
Attest:
__________________________
City Clerk
EXHIBIT 9
City Council 68 – 410 6/21/2022
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

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)
EXHIBIT 9
City Council 68 – 411 6/21/2022
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DWT Comments 5/13/22
ATT Comments 5/16/22

GROUND LEASE
THIS GROUND LEASE (“Lease”) is made and effective as of the ___ day of __________, 2022 (“Effective Date”) by and between the COUNTY OF ORANGE, a political subdivision of the State of California, the HOUSING AUTHORITY OF THE CITY OF SANTA ANA, a public body, corporate and politic, as tenants-in-common (respectively, the “County” and the “Agency”, and collectively “Lessor”) and WASHINGTON SANTA ANA HOUSING PARTNERS, L.P., a California limited partnership (hereinafter called “Tenant”) (also referred to hereinafter each as “Party” or collectively as the “Parties”).

RECITALS
A. County and Agency are tenants-in-common of a certain property that encompasses the Premises (as hereinafter defined).

B. County and Agency have executed a Joint Powers Agreement (“Joint Powers Agreement”), pursuant to which the County and Agency agreed to lease the Premises to the Tenant to develop, entitle and construct an 86-unit multifamily affordable housing project, as more fully described herein, upon the fulfillment of certain conditions precedent as set forth therein.

C. The Parties have executed an Option Agreement, dated _________________February 25, 2020 (“Option Agreement”), pursuant to which the Lessor had agreed to lease the Premises to the Tenant upon the fulfillment of certain conditions precedent.

D. The County and Agency acknowledge that the conditions precedent required by the Joint Powers Agreement and Option Agreement have been fulfilled and therefore the Parties desire that Tenant shall ground lease the Premises from Lessor on the terms set forth herein.

E. Lessor and Tenant have jointly agreed to enter into this Lease as of the date set forth above.

F. On July 2, 2019, the Agency authorized the Executive Director of the Agency and the Recording Secretary to execute a pre-commitment letter with the Tenant to enter into negotiations for a sixty-five (65) year ground-lease of 1126 E. Washington Ave for the development of the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701 (APNs 398-092-13 and 398-092-14).

G. On July 2, 2019, the City of Santa Ana authorized the City Manager and the Clerk of the Council to execute a pre-commitment letter with the Tenant for $3,971,440 in affordable housing funds consisting of $963,951 in Neighborhood Stabilization Program funds and $3,007,489 in HOME Investment Partnerships Program funds, for the development of the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701 (APNs 398-092-13 and 398-092-14).

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NOW, THEREFORE, in consideration of the above recitals, which are hereby incorporated into this Lease by reference, and mutual covenants and agreements hereinafter contained, County, Agency and Tenant mutually agree to the following:

ARTICLE I

DEFINITIONS

1.1 Definitions: The following defined terms used in this Lease shall have the meanings set forth below. Other terms are defined in other provisions of this Lease, and shall have the definitions given to such terms in such other provisions.

1.1.1. “Affiliate” shall mean, with respect to any person (which as used herein includes an individual, trust or entity), any other person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such person.

1.1.2. “Agency” shall mean the Housing Authority of the City of Santa Ana, acting as the Housing Successor Agency, a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under the California Redevelopment Law. The principal office of the Agency is located at 20 Civic Center Plaza, Santa Ana, California 92702. “Agency” shall also refer to the City of Santa Ana where the context dictates, to the effect that the City of Santa Ana shall have all rights granted to the Agency hereunder.

1.1.3. “Aggregate Transfer” shall refer to the total “Ownership Interest(s)” in Tenant transferred or assigned in one transaction or a series of related transactions (other than an Excluded Transfer) occurring since the latest of (a) the Effective Date, (b) the execution by Tenant of this Lease, or (c) the most recent Tenant Ownership Change; provided, however, that there shall be no double counting of successive transfers of the same interest in the case of a transaction or series of related transactions involving successive transfers of the same interest. Isolated and unrelated transfers shall not be treated as a series of related transactions for purposes of the definition of “Aggregate Transfer.”

1.1.4. “Annual Operating Expenses” means all regular and customary annual expenses incurred in relation to the operation of the Premises, including the Improvements, as reflected on the annual budget that Tenant shall prepare and abide by each year during the Term of this Ground Lease, commencing on the Commencement Date, as approved in writing by the Lessor, in Lessor’s reasonable discretion. Said Annual Operating Expenses shall include a reasonable property management and administrative fee, fees related to the tax credit syndication of the Premises, utility charges, operating and maintenance expenses, Project property taxes and Project insurance premiums, and such other costs as approved by the Lessor, in his/her reasonable discretion.

Tenant will deliver an annual budget for the following year no later than December 1 for each year following issuance of a permanent certificate of occupancy for the Improvements. Lessor shall deliver any comments, or its approval to such operating budget within thirty (30) days of receipt thereof. If an operating budget for the following year has not been approved by Lessor and Tenant prior to January 1 of such year, the annual operating budget from the previous year, increased by three percent (3%), with the actual cost of property tax and insurance premiums, shall apply until a new operating budget is approved. Notwithstanding the foregoing, in no event shall Annual Operating Expenses include any costs, fees, fines, charges, penalties, awards, judgments or expenses (including, but not limited to legal and accounting fees and expenses) which are due to or arising out Commented [ST1]: NOTE: This conforms to the Stanton
Inn ground lease. The loans are subordinate and we need this provision to work even if there is a foreclosure and these loans go away.

Commented [ST2]: Consistent with Placentia Veterans
lease.

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of the Tenant’s (A) breach or default of any mortgage loan, (B) fraudulent acts or willful misconduct or (C) breach or default under any other contract, lease or agreement pertaining to the Project.

Annual Operating Expenses shall also not include other expenses not related to the Project’s operations such as depreciation, amortization, accrued principal and interest expense on deferred payment debt and capital improvement expenditures.

1.1.5. “Annual Project Revenue” means all annual revenue generated by the Project from any source, including, but not limited to, rent payments, governmental assistance housing payments, laundry and other vending machine and pay telephone income. Notwithstanding the foregoing, Annual Project Revenue shall not include the following items: (a) security deposits from subtenants (except when applied by Tenant to rent or other amounts owing by subtenants); (b) capital contributions to Tenant by its members, partners or shareholders (including capital contributions required to pay deferred developer fee); (c) condemnation or insurance proceeds; (d) there shall be no line item, expense, or revenue shown allocable to vacant unit(s) at the Project; or (e) receipt by an Affiliate of management fees or other bona fide arms-length payments for reasonable and necessary Operating Expenses associated with the Project.

1.1.6. “Auditor-Controller" shall mean the Auditor-Controller, County of Orange, or designee, or upon written notice to Tenant, such other person as may be designated by the Board of Supervisors.

1.1.7. “Base Rent” shall mean a total of six million four hundred and fifty thousand dollars ($6,450,000) due and owing and payable in full on the Commencement Date, but if not paid in full on the Commencement Date, then the Base Rent amount paid in accordance with this Lease, including pursuant to Article III, below, with four million, one hundred and eight thousand, one hundred and thirty-six dollars ($4,108,136) being paid to the Agency pursuant to Section 3.1.2 and two million, three hundred and forty-one thousand, eight hundred and sixty-four dollars ($2,341,864) being paid to the County pursuant to Section 3.1.1.

Address APN Size
(Acres)
Size
(SF)
Land
Percentage
Value
Allocation
City Owned Site 398-092-14 1.456 63,423 63.69% $4,108,136 County Owned Site 398-092-13 0.83 36,155 36.31% $2,341,864 Total 2.286 99,578 100.00% $6,450,000

1.1.8. “Board of Supervisors” shall mean the Board of Supervisors of the County of Orange, a political subdivision of the State of California, the governing body of the County.

1.1.9. “Certificate of Occupancy” shall mean a temporary or final certificate of occupancy (or other equivalent entitlement, however designated) which entitles Tenant to commence normal operation and occupancy of the Improvements.

1.1.10. “Chief Real Estate Officer” shall mean the Chief Real Estate Officer, County Executive Office, County of Orange, or designee, or upon written notice to Tenant, such other person as may be designated by the County Board of Supervisors.

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1.1.11. “City” shall mean the City of Santa Ana, California, a charter city and municipal corporation. “City” shall also refer to the Agency where the context dictates, to the effect that the Agency shall have all the rights granted to the City hereunder. “City Council” shall mean the City Council of the City of Santa Ana.

1.1.12. “Claims” shall mean liens, claims, demands, suits, judgments, liabilities, damages, fines, losses, penalties, costs and expenses (including without limitation reasonable attorneys' fees and expert witness costs, and costs of suit), and sums reasonably paid in settlement of any of the foregoing.

1.1.13. “Commencement Date” shall mean the date on which a Certificate of Occupancy is issued for the Project, and on which the Term shall commence and Base Rent shall become due and payable.

1.1.14. “Contractor” shall mean Tenant’s general contractor for the construction of the Improvements.

1.1.15. “County” shall mean the County of Orange, a political subdivision of the State of California.

1.1.16. “Effective Date” is defined in the introductory paragraph to this Lease and is the date on which the Tenant is entitled to commence construction pursuant to Article V, below.

1.1.17. “Event of Default” is defined in Section 11.1.

1.1.18. “Excluded Transfer” shall mean any of the following:
(a) A transfer by any direct or indirect partner, shareholder, or member of Tenant (or of a limited partnership, corporation, or limited liability company that is a direct or indirect owner in Tenant’s ownership structure) as of the Effective Date or the date on which a Tenant Ownership Change occurred as to the interest transferred, to any other direct or indirect partner, shareholder, or member of Tenant (or of a limited partnership, corporation, or limited liability company that is a direct or indirect owner in Tenant’s ownership structure) as of the Effective Date, including in each case to or from a trust for the benefit of the immediate family of any direct or indirect partner or member of Tenant who is an individual; (b) A transfer of an Ownership Interest in Tenant or in constituent entities of Tenant (i) to a member of the immediate family of the transferor (which for purposes of this Lease shall be limited to the transferor’s spouse, children, parents, siblings, and grandchildren); (ii) to a trust for the benefit of a member of the immediate family of the transferor; (iii) from such a trust or any trust that is an owner in a constituent entity of Tenant as of the Effective Date, to the settlor or beneficiaries of such trust or to one or more other trusts created by or for the benefit of any of the foregoing persons, whether any such transfer described in this subsection is the result of gift, devise, intestate succession, or operation of law; or (iv) in connection with a pledge by any partners or members of a constituent entity of Tenant to an affiliate of such partner or member; (c) A transfer of a direct or indirect interest resulting from public trading in the stock or securities of an entity, when such entity is a corporation or other entity whose stock Commented [ST3]: We need the ground lease in effect
concurrent or before closing in order to close the loan.

Must be a hard date on or before the closing date.

Commented [ST4]: We
Commented [ST5]:

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and/or securities is/are traded publicly on a national stock exchange or traded in the over-the-counter market and the price for which is regularly quoted in recognized national quotation services; (d) A mere change in the form, method, or status of ownership (including, without limitation, the creation of single-purpose entities) as long as the ultimate beneficial ownership remains the same as of the Effective Date, or is otherwise excluded in accordance with subsections (a) – (c) above;
(e) A transfer to an Affiliated nonprofit public benefit corporation or forprofit corporation, or to a limited partnership whose general partner is a nonprofit corporation, forprofit corporation or limited liability company Affiliated with the Tenant or the Tenant’s general partner, subject to the County and Agency’s right to reasonably approve the agreement to effect such assignment or transfer;
(f) The lease, assignment of lease or sublease of any individual residential unit in the Improvements;
(g) A transfer of the Tenant’s interest in the Premises by foreclosure or deed in lieu of foreclosure (i) to any bona fide third-party lender holding a lien encumbering the Premises (or its nominee), and (ii) by a Lender Foreclosure Transferee to a third-party made in accordance with Section 17.6.5;
(h) Transfers of any limited partnership or membership interest in the Tenant to an investor solely in connection with the tax credit syndication of the Premises in accordance with Section 42 of the Internal Revenue Code of 1986, as amended (the “Tax Credit Laws”), (including, without limitation, a subsequent transfer of the Limited Partner’s interest to an Affiliate of the Limited Partner), provided, such syndication shall not extend the Term of this Lease; (i) The grant or exercise of an option agreement or right of first refusal solely in connection with the tax credit syndication of the Premises in accordance with the Tax Credit Laws provided that the syndication shall not extend the Term of this Lease; (j) The removal and replacement of one or both of Tenant’s general partners pursuant to the terms of Tenant’s Partnership Agreement as of the Effective Date and replacement by the Limited Partner, or an Affiliate thereof; or
(k) Any assignment of the Lease by Tenant to an Affiliate of Tenant or to a Mortgagee as security in which there is no change to the direct and indirect beneficial ownership of the leasehold interest.

1.1.19. “Force Majeure Event” is defined in Article XIV.

1.1.20. “Hazardous Material(s)” is defined in Section 4.5.

1.1.21. “HCD” shall mean the California Department of Housing and Community Development.

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1.1.22. “Improvement Costs” shall mean the final actual construction costs incurred by Tenant in connection with the construction of the Improvements and in accordance with the terms of this Lease, excluding ordinary repair and maintenance costs and any Permitted Capital Expenditures paid for out of the Capital Improvement Fund.

1.1.23. “Improvements” shall mean and includes all buildings (including aboveground and below ground portions thereof, and all foundations and supports), building systems and equipment (such as HVAC, electrical and plumbing equipment), physical structures, fixtures, hardscape, paving, curbs, gutters, sidewalks, fences, landscaping and all other improvements of any type or nature whatsoever now or hereafter made or constructed on the Premises. The term Improvements shall mean the Initial Improvements and any replacement improvements constructed in accordance with the terms of this Lease. During the entire Term, the Improvements will be restricted to the following uses:
(a) multifamily affordable housing,
(b) permanent supportive housing units and related services, and (c) related commercial and community-serving uses as needed for the siting of the affordable housing and supportive housing units, as approved by the Lessor.

1.1.24. “Includes” shall mean “includes but is not limited to” and “including” shall mean “including but is not limited to.”

1.1.25. “Initial Improvements” shall mean the improvements first constructed by Tenant on the Premises at its sole cost and expense as more particularly described in Exhibit B attached hereto and incorporated by reference herein.

1.1.26. “Interest Rate” shall mean the lower of: (a) the reference or prime rate of U.S. Bank National Association, in effect from time to time plus three percent (3%); or (b) the highest rate of interest permissible under the Laws not to exceed the rate of twelve percent (12%) per annum.

1.1.27. “Laws” shall mean all laws, codes, ordinances, statutes, orders and regulations now or hereafter made or issued by any federal, state, county, local or other governmental agency or entity that are binding on and applicable to the Premises and Improvements.

1.1.28. “Lease” shall mean this Ground Lease (including any and all addenda, amendments and exhibits hereto), as now or hereafter amended.

1.1.29. “Leasehold Estate” is defined in Section 17.1.1.

1.1.30. “Leasehold Foreclosure Transferee” is defined in Section 17.1.2.

1.1.31. “Leasehold Mortgage” is defined in Section 17.1.3.

1.1.32. “Leasehold Mortgagee” is defined in Section 17.1.4.

1.1.33. “Lender” shall mean: (a) a bank, savings bank, investment bank, savings and loan association, mortgage company, insurance company, trust company, commercial credit Commented [ST6]: Right now this defined term isn’t used any where. I added it in two spots where I think it may have been intended.

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corporation, real estate investment trust, pension trust or real estate mortgage investment conduit; or (b) some other type of lender engaged in the business of making commercial loans, provided that such other type of lender has total assets of at least $2,000,000 and capital/statutory surplus or shareholder’s equity of at least $500,000,000 (or a substantially similar financial capacity if the foregoing tests are not applicable to such type of lender); or (c) a local, state or federal governmental entity, including but not limited to HCD, which provides predevelopment, acquisition, construction and/or permanent financing for Tenant’s acquisition and development of the Property.

1.1.34. “Lessor’s Interest” shall mean all of County’s and Agency’s interests in the real property, the Premises, this Lease as tenants-in-common and their existing and reversionary interest in the real property, Premises, as well as the Improvements upon the expiration of the Term or earlier termination thereof.

1.1.35. “Lessor Parties” shall mean, collectively and individually, the County, the Agency and their respective Affiliates, governing boards, agents, employees, members, officers, directors and attorneys.

1.1.36. “Limited Partner” shall mean any limited partner or investor member (and its successors and/or assigns) of Tenant and shall include all references to “investor” in this Ground Lease.

1.1.37. “Net Refinancing Proceeds” is defined in Section 3.2.

1.1.38. “Net Syndication Proceeds” is defined in Section 3.2.

1.1.39. “New Lease” is defined in Section 17.7.1.

1.1.40. “Operating Costs” is defined in Section 3.4.13.6.5.

1.1.41. “Trust” shall mean Orange County Housing Finance Trust, a California public agency formed pursuant to California Government Code section 6500, et. seq.

1.1.42. “Ownership Interests” shall mean the share(s) of stock, partnership interests, membership interests, other equity interests or any other direct or indirect ownership interests in Tenant, regardless of the form of ownership and regardless of whether such interests are owned directly or through one or more layers of constituent partnerships, corporations, limited liability companies, or trusts.

1.1.421.1.43. “Partnership Related Fees” shall mean the following fees of Tenant (or partners thereof pursuant to Tenant’s Partnership Agreement) which are actually paid including:
(i) a limited partner asset management fee payable to the Limited Partner in the annual amount of $5,000 (increased annually by 3%); and (ii) partnership management fee (administrative and/or managing general partner) payable to the general partners of Tenant in the aggregate annual amount of $20,00020,000 (increased annually by 3%).

Commented [LP7]: Per LPA, this fee starts at $25,000
annually, increasing by 3% thereafter. Need to confirm
initial amount.

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1.1.431.1.44. “Person” shall include firms, associations, partnerships, joint ventures, trusts, corporations and other legal entities, including public or governmental bodies, agencies or instrumentalities, as well as natural persons.

1.1.441.1.45. “Premises” shall mean that certain real property containing approximately 2.28 acres of undeveloped land in the City, together with all easements, rights and privileges appurtenant thereto, to be leased to Tenant pursuant to this Lease and on which Tenant intends to construct the Improvements. The legal description of the Premises is attached hereto as Exhibit A. A rendering showing the approximate boundaries of the Premises is attached hereto as Exhibit A-1.

1.1.451.1.46. “Project” shall mean the Improvements, and all related appurtenances, constructed by Tenant on the Premises.

1.1.461.1.47. “Rent” shall mean and includes the County Base Rent, the Agency Base Rent, and Additional Rent payable by Tenant under this Lease.

1.1.471.1.48. “Residual Receipts” means the Annual Project Revenue less (A) Annual Operating Expenses (hereinafter defined), (B) obligated debt service on Leasehold Mortgages for the funding of the Improvements approved in writing by the Lessor at the closing of the construction and permanent financing for the Improvements or as permitted hereunder or otherwise approved pursuant to Section 17.2, below, (C) payment obligations approved in writing by the Lessor at the closing of the construction financing for the Improvements, (D) Partnership Related Fees (including accrued by unpaid Partnership Related Fees from the prior year or years), (E) repayment of loans, if any, made by Limited Partner to Tenant for development and/or operating expense deficits on terms reasonably acceptable to Lessor, (F) repayment of loans, if any, made by a general partner of Tenant solely for development and/or operating expense deficits on terms reasonably acceptable to Lessor, (G) deferred developer fee, and (H) scheduled deposits to reserves approved in writing by the Lessor at the closing of the construction financing for the Improvements (or such higher reserve deposits as may be required under Leasehold Mortgagee’s loan documents executed at the construction loan closing or as reasonably required by any Leasehold Mortgagee).

1.1.481.1.49. “Risk Manager” shall mean the Manager of County Executive Office, Risk Management, County of Orange, or designee, or upon written notice to Tenant, such other person as may be designated by the Board of Supervisors and the Risk Manager for the City of Santa Ana, or designee, or upon written notice to Tenant, such other person as may be designated by the City Council.

1.1.491.1.50. “Taxes” is defined in Section 3.11.2.

1.1.51. “TCAC” is defined as the California Tax Credit Allocation Committee.

1.1.52. “Tenant Group” shall mean Tenant and Tenant’s Affiliates, agents, employees, members, officers, directors and attorneys.

1.1.53. “Tenant Ownership Change” shall mean (a) any transfer or assignment by Tenant of the Leasehold Estate or (b) any “Aggregate Transfer” of at least twenty five percent (25%) of the “Ownership Interest(s)” in Tenant, in each case that is not an “Excluded Transfer.” Commented [ST8]: We need to know that the CCRC
reserve payments required under their documents (signed at construction loan closing) are approved if higher than what is under here.

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1.1.54. “Tenant’s Partnership Agreement” shall mean Tenants Amended and Restated Agreement of Limited Partnership dated as of _______________.

1.1.55. “Term” is defined in Section 2.2.

1.1.56. “Transfer” is defined in Section 10.1.1.

1.1.57. “Transfer Notice” is defined in Section 10.4.

1.1.58. “Treasurer-Tax Collector” shall mean the Treasurer-Tax Collector, County of Orange, or designee, or upon written notice to Tenant, such other person or entity as may be designated by the Board of Supervisors.

1.1.59. “Trust MHSA Loan” shall mean that certain loan in the amount of two million, five hundred thousand dollars ($2,500,000), representing a Trust Mental Health Service Act loan from the Orange County Housing Trust to the Tenant.

1.1.60. “Utility Costs” is defined in Section 3.4.13.6.6.

1.1.601.1.61. “Work” shall mean both Tenant’s construction activity with respect to the Improvements, including permitted future changes, alterations and renovations thereto and also including, without limiting the generality of the foregoing, site preparation, landscaping, installation of utilities, street construction or improvement and grading or filling in or on the Premises.

ARTICLE II

LEASE OF PROPERTY

2.1 Lease of Premises.

2.1.1. Lessor hereby leases the Premises to Tenant for the Term, and Tenant hereby leases the Premises from Lessor for the Term, subject to the terms, conditions, covenants, restrictions and reservations of this Lease.

2.1.2. Warranty of Peaceful Possession. Lessor covenants and warrants that, subject to the Tenant’s payment of Rent and performance and observation of all of the covenants, obligations and agreements herein contained and provided to Tenant, Tenant shall and may peaceably and quietly have, hold, occupy, use and enjoy the Premises during the Term and may exercise all of its rights hereunder. Except as otherwise set forth herein, the Lessor covenants and agrees that they shall not grant any mortgage or lien on or in respect of its fee interest in the Premises unless the same is expressly subject and subordinate to this Lease or any New Lease.

2.2 Term. The “Term” of this Lease shall commence on the Effective Date of this Lease, and shall expire at 12:00 midnight Pacific Standard Time on the 62nd anniversary of the Commencement Date, unless sooner terminated as a result of Tenant’s non-compliance with any EXHIBIT 11
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terms, conditions, covenants, restrictions or reservations of this Lease. Notwithstanding the foregoing, the Term shall not exceed sixty five (65) years from the Effective Date.

2.3 Termination at End of Term. This Lease shall terminate without need of further actions of any Party at 12:00 midnight Pacific Standard Time on the last day of the Term.

2.4 Condition of the Premises. TENANT HEREBY ACCEPTS THE PREMISES “AS IS”, AND ACKNOWLEDGES THAT THE PREMISES IS IN SATISFACTORY CONDITION. COUNTY AND AGENCY MAKES NO WARRANTY, IMPLIED OR OTHERWISE, AS TO THE SUITABILITY OF THE PREMISES FOR TENANT’S PROPOSED USES. COUNTY AND AGENCY MAKE NO COVENANTS OR

WARRANTIES, IMPLIED OR OTHERWISE, RESPECTING THE CONDITION OF THE

SOIL, SUBSOIL, OR ANY OTHER CONDITIONS OF THE PREMISES OR THE

PRESENCE OF HAZARDOUS MATERIALS, NOR DOES COUNTY OR AGENCY

COVENANT OR WARRANT, IMPLIED OR OTHERWISE, AS TO THE SUITABILITY OF

THE PREMISES FOR THE PROPOSED DEVELOPMENT, CONSTRUCTION OR USE BY TENANT. COUNTY AND AGENCY SHALL NOT BE RESPONSIBLE FOR ANY LAND

SUBSIDENCE, SLIPPAGE, SOIL INSTABILITY OR DAMAGE RESULTING THEREFROM. COUNTY AND AGENCY SHALL NOT BE REQUIRED OR OBLIGATED

TO MAKE ANY CHANGES, ALTERATIONS, ADDITIONS, IMPROVEMENTS OR REPAIRS TO THE PREMISES. TENANT SHALL RELY ON ITS OWN INSPECTION AS TO THE SUITABILITY OF THE PREMISES FOR THE INTENDED USE.

TENANT INITIALS: ______ ______

2.5 Limitations of the Leasehold. This Lease and the rights and privileges granted Tenant in and to the Premises are subject to all covenants, conditions, restrictions, and exceptions of record as of the date hereof or otherwise disclosed to Tenant prior to the date hereof. Nothing contained in this Lease or in any document related hereto shall be construed to imply the conveyance to Tenant of rights in the Premises which exceed those owned by Lessor, or any representation or warranty, either express or implied, relating to the nature or condition of the Premises or County’s or Agency’s interest therein.

2.6 Tenant’s Investigation. Tenant acknowledges that it is solely responsible for investigating the Premises to determine the suitability thereof for the uses contemplated by Tenant.

Tenant further acknowledges by executing this Lease that it has completed its investigation and has made such determinations as Tenant believes may be required under the circumstances.

ARTICLE III

TOTAL RENT

3.1 Base Rent. Throughout the Term of this Lease, regardless of an earlier termination date Tenant shall pay to the County and the Agency the Base Rent as set forth herein.

3.1.1 County Base Rent. Until the satisfaction, expiration or termination of the Trust MHSA Loan, Tenant shall make annual payments to County of thirtythirteen and fifty-three and four-tenthsone hundredths of one percent (33.413.53%) of the then available Residual Receipts (defined above), but only to the extent said Residual Receipts are available, until the amount of two million, three hundred and forty-one thousand, eight hundred and sixty-four dollars ($2,341,864) is EXHIBIT 11
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fully paid (“County Base Rent”). After the satisfaction, expiration, or termination of the Trust MHSA Loan, County Base Rent shall automatically reset to thirty-three and four-tenths percent (33.4%) of the then available Residual Receipts. County Base Rent shall only become due after the Tenant has repaid that certain loan from the County awarded under the 2016 Permanent Supportive Housing Notice of Funding Availability, Addendum One, evidenced by a Loan Agreement, Promissory Note and Leasehold Deed of Trust, in the amount of $2,280,7012,650,701 (collectively, and together with the other loan documents evidencing, securing and relating to said loan from the County, the “County Loan Documents”), which is also being paid out of the same thirty-three and four-tenths percent (33.4%)applicable percentage of the Residual Receipts. On the last day of the Term the then outstanding amount of the County Base Rent shall be paid in full if not already paid by that time. County Base Rent will bear interest commencing on the Commencement Date at the simple rate of three percent (3%) per year until paid in full. Once the County Base Rent has been paid in full with interest, Tenant shall have no further obligation for County Base Rent under this Lease.

3.1.2 Agency Base Rent. Until the satisfaction, expiration or termination of the Trust MHSA Loan, Tenant shall also make annual payments to Agency of thirtytwenty-three and seventy one one-thirdhundredths of one percent (33.323.71%) of the then available Residual Receipts (defined above), but only to the extent said Residual Receipts are available, until the amount of four million, one hundred and eight thousand, one hundred and thirty-six dollars ($4,108,136) is fully paid (“Agency Base Rent”). After the satisfaction, expiration, or termination of the Trust MHSA Loan, Agency Base Rent shall automatically reset to thirty-three and three-tenths percent (33.3%) of the then available Residual Receipts. Agency Base Rent shall only become due after the Tenant has repaid those two certain loans from the City, each evidenced by a Loan Agreement, Promissory Note, Deed of Trust, and Affordability Restrictions on Transfer of Property dated _________________, 20__,for an Agency HOME loan in the amount of $3,007,489.00, and dated _________________, 20__,3,007,489.00, , for an Agency Neighborhood Stabilization Program loan in the amount of $963,951 1,637,420, for a total of $4,644,909(collectively, and together with the other loan documents evidencing, securing and relating to said loans from the Agency, the “Agency Loan Documents”), which is also being paid out of the same thirty-three and one-third percent (33.3%)applicable percentage of the Residual Receipts. On the last day of the Term the then outstanding amount of the Agency Base Rent shall be paid in full if not already paid by that time.

Agency Base Rent will bear interest commencing on the Commencement Date at the simple rate of three percent (3%) per year until paid in full. Once the Agency Base Rent has been paid in full, Tenant shall have no further obligation for Agency Base Rent under this Lease.

3.1.3 Trust MHSA Loan. The Parties recognize that during the Term of the Trust MHSA Loan, Tenant will be making annual payments to the Trust of twelve and seventy six onehundredths percent (12.76%) of the then available Residual Receipts, until the Trust MHSA Loan is fully paid. At such time as the Trust MHSA Loan has been paid in full, or has been otherwise satisfied or terminated, the County Base Rent and Agency Base Rent shall be 33.4% and 33.3%, respectively, of the then available Residual Receipts, based on the loan amounts set forth above, without further actions of the Parties.

3.2 Net Refinancing Proceeds/Net Syndication Proceeds. Any Net Refinancing Proceeds or Net Syndication Proceeds received by Tenant shall be used to pay any unpaid Base Rent.

Additionally, the Tenant’s right and obligation to use such net proceeds to pay Base Rent is subject to the rights of Leasehold Mortgagees to control the use of such proceeds pursuant to the terms of Commented [LP9]: Note – will need to confirm number of
RR loans and amounts; they differ from current loan
schedule in our LPA. Are they each paid pari passu from share of RR?
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their respective loan documents, all of which have been reviewed and reasonably approved by the Lessor and is further subject to the consent of TCAC to the extent required under the applicable regulations or the extended use agreement. Without limiting application of those loan documents and TCAC regulations and requirements, in no case shall Tenant be permitted to retain Net Refinancing Proceeds or Net Syndication Proceeds without the prior written consent of the Lessor, until full satisfaction of the unpaid Base Rent. Notwithstanding the foregoing, this Section 3.2 shall not apply to (i) any Excluded Transfer or (ii) any financing described in Section 17.2. “Net Refinancing Proceeds” shall be defined as the proceeds from the refinancing of any loan approved by Lessor hereunder or otherwise permitted under this Lease, net of all of the following: the amount of the financing which is satisfied out of such proceeds, closing costs, costs to construct and/or rehabilitate the Project, including the costs necessary to obtain refinancing proceeds (such as consultant, legal and other consultant costs), the Improvement Costs, the soft costs related to the construction and/or rehabilitation of the Project (such as architecture, engineering and other consultant costs, and all required relocation costs), and all hard costs of the rehabilitation and/or construction, all of which have been reviewed and reasonably approved by the Lessor. “Net Syndication Proceeds” shall be defined as syndication proceeds net of final Project hard and soft construction costs, including all Improvement Costs and reasonable and customary syndication closing costs, including developer fee, based on a cost certification completed at the end of construction, and syndication costs all of which has been reviewed and reasonably approved by the Lessor.

3.3 Triple Net Rent. It is the intent of the Parties that all Rent shall be absolutely net to Lessor and that, except as otherwise provided herein, Tenant will pay all costs, charges, insurance premiums, taxes, utilities, expenses and assessments of every kind and nature incurred for, against or in connection with the Premises which arise or become due during the Term as a result of Tenant’s use and occupancy of the Premises. Under no circumstances or conditions, whether now existing or hereafter arising, or whether beyond the present contemplation of the Parties, shall County or Agency be obligated or required to make any payment of any kind whatsoever or be under any other obligation or liability under this Lease except as expressly provided herein.

3.4 Insufficient Funds. For purposes of this Section 3.4, Rent shall have the same meaning as stated in Section 1.1.421.1.47. If any payment of Rent or other fees made by check is returned due to insufficient funds or otherwise, County and Agency shall have the right to require Tenant to make all subsequent Rent payments by cashier’s check, certified check or automated clearing house debit system. All Rent or other fees shall be paid in lawful money of the United States of America, without offset or deduction or prior notice or demand. No payment by Tenant or receipt by County and Agency of a lesser amount than the Rent or other fees due shall be deemed to be other than on account of the Rent or other fees due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and County and Agency shall accept such check or payment without prejudice to County’s and Agency’s right to recover the balance of the Rent or other fees or pursue any other remedy available to the County or Agency in this Lease.

3.5 Reserved.

3.6 Additional Rent.

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3.6.1. Additional Rent. During the Term, the Base Rent shall be absolutely net to County and Agency so that all costs (including but not limited to Operating Costs and Utility Costs, as defined below), fees, taxes (including but not limited to Real Estate Taxes and Equipment Taxes, as defined below), charges, expenses, impositions, reimbursements, and obligations of every kind relating to the Premises shall be paid or discharged by Tenant as additional rent (“Additional Rent”). Additional Rent shall also include such amounts as described in Article XI. As more particularly set forth in Sections 3.6.3 and 3.6.6, below, Tenant has the right to pay under protest the foregoing Additional Rent, as applicable, and defend against the same. Any imposition rebates shall belong to Tenant.

3.6.2. Taxes. During the Term, Tenant shall pay directly to the taxing authorities all Taxes (as herein defined) at least ten (10) days prior to delinquency thereof. For purposes hereof, “Taxes” shall include any form of assessment, license fee, license tax, business license fee, commercial rental tax, levy, penalty, sewer use fee, real property tax, charge, possessory interest tax, tax or similar imposition (other than inheritance or estate taxes), imposed by any authority having the direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage, flood control, water pollution control, public transit or other special district thereof, as against any legal or equitable interest of County or Agency in the Premises or any payments in lieu of taxes required to be made by County or Agency, including, but not limited to, the following:
(a) Any assessment, tax, fee, levy, improvement district tax, charge or similar imposition in substitution, partially or totally, of any assessment, tax, fee, levy, charge or similar imposition previously included within the definition of Taxes. It is the intention of Tenant and Lessor that all such new and increased assessments, taxes, fees, levies, charges and similar impositions be included within the definition of “Taxes” for the purpose of this Lease. (b) Any assessment, tax, fee, levy, charge or similar imposition allocable to or measured by the area of the Premises or the rent payable hereunder, including, without limitation, any gross income tax or excise tax levied by the city, county, state or federal government, or any political subdivision thereof, with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof;
(c) Any assessment, tax, fee, levy, charge or similar imposition upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises, including any possessory interest tax levied on the Tenant’s interest under this Lease;
(d) Any assessment, tax, fee, levy, charge or similar imposition by any governmental agency related to any transportation plan, fund or system instituted within the geographic area of which the Premises are a part.

The definition of “Taxes,” including any additional tax the nature of which was previously included within the definition of “Taxes,” shall include any increases in such taxes, levies, charges or assessments occasioned by increases in tax rates or increases in assessed valuations, whether occurring as a result of a sale or otherwise.

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3.6.3. Contest of Taxes. Tenant shall have the right to contest, oppose or object to the amount or validity of any Taxes or other charge levied on or assessed against the Premises and/or Improvements or any part thereof; provided, however, that the contest, opposition or objection must be filed before such time the Taxes or other charge at which it is directed becomes delinquent.

Furthermore, no such contest, opposition or objection shall be continued or maintained after the date the tax, assessment or other charge at which it is directed becomes delinquent unless Tenant has either: (i) paid such tax, assessment or other charge under protest prior to its becoming delinquent; or (ii) obtained and maintained a stay of all proceedings for enforcement and collection of the tax, assessment or other charge by posting such bond or other matter required by law for such a stay; or (iii) delivered to Lessor a good and sufficient undertaking in an amount specified by Lessor and issued by a bonding corporation authorized to issue undertakings in California conditioned on the payment by Tenant of the tax, assessments or charge, together with any fines, interest, penalties, costs and expenses that may have accrued or been imposed thereon within thirty (30) days after final determination of Tenant’s contest, opposition or objection to such tax, assessment or other charge.

3.6.4. Payment by Lessor. Should Tenant fail to pay any Taxes required by this Article III to be paid by Tenant within the time specified herein, subject to Tenant’s right to contest such Taxes in accordance with Section 3.6.3, and if such amount is not paid by Tenant within fifteen (15) days after receipt of Lessor’s written notice advising Tenant of such nonpayment, County and/or Agency may, without further notice to or demand on Tenant, pay, discharge or adjust such tax, assessment or other charge for the benefit of Tenant. In such event Tenant shall promptly on written demand of County or Agency reimburse County and/or Agency for the full amount paid by County and/or Agency in paying, discharging or adjusting such tax, assessment or other charge, together with interest at the Interest Rate from the date advanced until the date repaid.

3.6.5. Operating Costs. Tenant shall pay all Operating Costs during the Term prior to delinquency. As used in this Lease, the term “Operating Costs” shall mean all charges, costs and expenses related to the Premises, including, but not limited to, management, operation, maintenance, overhaul, improvement, replacement or repair of the Improvements and/or the Premises.

3.6.6. Utility Costs. Tenant shall pay all Utility Costs during the Term prior to delinquency. As used in this Lease, the term “Utility Costs” shall include all charges, surcharges, taxes, connection fees, service fees and other costs of installing and using all utilities required for or utilized in connection with the Premises and/or the Improvements, including without limitation, costs of heating, ventilation and air conditioning for the Premises, costs of furnishing gas, electricity and other fuels or power sources to the Premises, and the costs of furnishing water and sewer services to the Premises. Tenant agrees to indemnify and hold harmless the County and Agency against any liability, claim, or demand for the late payment or non-payment of Utility Costs.

ARTICLE IV

USE OF PREMISES

4.1 Permitted Use of Premises. Tenant may use the Premises for the construction, development, entitlement, operation, maintenance, replacement and repair of the Project, including the Improvements, as follows:

4.1.1. Required Services and Uses. Lessor’s primary purpose for entering into this Lease is to promote the development of the Improvements consistent with this Lease. In furtherance EXHIBIT 11
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of that purpose, Tenant shall construct and during the entire Term operate, maintain, replace and repair the Improvements in a manner consistent with the Laws and for the following uses:
(a) multifamily affordable housing, and appurtenant improvements, including, without limitation, parking,
(b) permanent supportive housing units and related services, and (c) related commercial and community-serving uses, as approved by the Lessor.

4.1.2. Ancillary Services and Uses. Subject to the prior written approval of Lessor, which approval may be granted or withheld in the sole discretion of the Lessor, Tenant may provide those additional services and uses which are ancillary to and compatible with the required services and uses set forth in Section 4.1.1., above.

4.1.3. Additional Concessions or Services. Tenant may establish, maintain, and operate such other additional facilities, concessions, and services as Tenant and Lessor may jointly from time to time reasonably determine to be reasonably necessary for the use of the Premises and which are otherwise permitted by Law for the sole purpose to provide affordable housing and/or emergency shelter.

4.1.4. Restricted Use. The services and uses listed in this Section 4.1, both required and optional, shall be the only services and uses permitted. Tenant agrees not to use the Premises for any other purpose or engage in or permit any other activity within or from the Premises unless approved in writing by the Lessor, which approval may be granted or withheld in the sole discretion of the Lessor.

4.1.5. Continuous Use. During the Term, Tenant shall continuously conduct Tenant’s business in the Premises in the manner provided under this Lease and shall not discontinue use of the Premises for any period of time except in the case of a Force Majeure Event or as permitted in advance and in writing by the Lessor.

4.1.6. Alcohol Restrictions. Tenant shall not permit the sale or service of alcoholic beverages on the Premises.

4.1.7. Permits and Licenses. Tenant shall be solely responsible to obtain, at its sole cost and expense, any and all permits, licenses or other approvals required for the uses permitted herein and shall maintain such permits, licenses or other approvals for the entire Term.

4.2 Nuisance; Waste. Tenant shall not maintain, commit, or permit the maintenance or commission of any nuisance as now or hereafter defined by any statutory or decisional law applicable to the Premises and Improvements or any part thereof. Tenant shall not commit or allow to be committed any waste in or upon the Premises or Improvements and shall keep the Premises and the Improvements thereon in good condition, repair and appearance.

4.3 Compliance with Laws. Tenant shall not use or permit the Premises or the Improvements or any portion thereof to be used in any manner or for any purpose that violates any applicable Laws. Tenant shall have the right to contest, in good faith, any such Laws, and to delay EXHIBIT 11
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compliance with such Laws during the pendency of such contest (so long as there is no material threat to life, health or safety that is not mitigated by Tenant to the satisfaction of the applicable authorities). Lessor may cooperate with Tenant in all reasonable respects in such contest, including joining with Tenant in any such contest if County and/or Agency’s joinder is required in order to maintain such contest; provide, however, that any such contest shall be without cost to Lessor, and Tenant shall indemnify, defend (with attorneys acceptable to Lessor), and hold harmless the Lessor from any and all claims, liabilities, losses, damages, or actions of any kind and nature, including reasonable attorneys’ fees, arising or related to Tenant’s failure to observe or comply with the contested Law during the pendency of the contest.

4.4 Hazardous Materials.

4.4.1. Definition of Hazardous Materials. For purposes of this Lease, the term “Hazardous Material” or “Hazardous Materials” shall mean any hazardous or toxic substance, material, product, byproduct, or waste, which is or shall become regulated by any governmental entity, including, without limitation, the County and/or Agency acting in their governmental capacity, the State of California or the United States government.

4.4.2. Use of Hazardous Materials. Except for those Hazardous Materials which are customarily used in connection with the construction, operation, maintenance and repair of the Improvements or used in connection with any permitted use of the Premises and Improvements under this Lease (which Hazardous Materials shall be used in compliance with all applicable Laws), Tenant or Tenant’s employees, agents, independent contractors or invitees (collectively “Tenant Parties”) shall not cause or permit any Hazardous Materials to be brought upon, stored, kept, used, generated, released into the environment or disposed of on, under, from or about the Premises (which for purposes of this Section shall include the subsurface soil and ground water).

4.4.3. Tenant Obligations. If the presence of any Hazardous Materials on, under or about the Premises caused or permitted by Tenant or Tenant Parties, and excluding Hazardous Materials existing on the Premises prior to the Effective Date (the “Existing Hazardous Materials”), results in (i) injury to any person, (ii) injury to or contamination of the Premises (or a portion thereof), or (iii) injury to or contamination or any real or personal property wherever situated, Tenant, at its sole cost and expense, shall promptly take all actions necessary or appropriate to return the Premises to the condition existing prior to the introduction of such Hazardous Materials to the Premises and to remedy or repair any such injury or contamination. Without limiting any other rights or remedies of County or Agency under this Lease, Tenant shall pay the cost of any cleanup or remedial work performed on, under, or about the Premises as required by this Lease or by applicable Laws in connection with the removal, disposal, neutralization or other treatment of such Hazardous Materials caused or permitted by Tenant or Tenant Parties, excluding the Existing Hazardous Materials. Notwithstanding the foregoing, Tenant shall not take any remedial action in response to the presence, discharge or release, of any Hazardous Materials on, under or about the Premises caused or permitted by Tenant or Tenant Parties, or enter into any settlement agreement, consent decree or other compromise with any governmental or quasi-governmental entity without first obtaining the prior written consent of the Lessor. All work performed or caused to be performed by Tenant as provided for above shall be done in good and workmanlike manner and in compliance with plans, specifications, permits and other requirements for such work approved by Lessor.

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4.4.4. Indemnification for Hazardous Materials.
(a) To the fullest extent permitted by law, Tenant hereby agrees to indemnify, hold harmless, protect and defend (with attorneys acceptable to Lessor) Lessor, its elected officials, officers, employees, agents, independent contractors, and the Premises, from and against any and all liabilities, losses, damages (including, but not limited, damages for the loss or restriction on use of rentable or usable space or any amenity of the Premises or damages arising from any adverse impact on marketing and diminution in the value of the Premises), judgments, fines, demands, claims, recoveries, efficiencies, costs and expenses (including, but not limited to, reasonable attorneys' fees, disbursements and court costs and all other professional or consultant's expenses), whether foreseeable or unforeseeable (collectively, "Liabilities"), arising out of the presence, use, generation, storage, treatment, on or off-site disposal or transportation of Hazardous Materials on, into, from, under or about the Premises by Tenant or Tenant Parties, and excluding all Existing Hazardous Materials. Such indemnification shall not apply to any loss, claims, liability or costs arising out of Tenant’s discovery of Existing Hazardous Materials on the Premises or the existence of Existing Hazardous Materials on the Premises.
(b) The foregoing indemnity shall also specifically include the cost of any required or necessary repair, restoration, clean-up or detoxification of the Premises and the preparation of any closure or other required plans. The forgoing indemnity obligation shall not include the cost of any repair, restoration, clean-up or detoxification of the Premises related to Existing Hazardous Materials.
(c) The foregoing indemnity and defense obligations of this Lease shall survive its expiration or termination; provided, however, that the indemnity contained in this Section

4.4.4 shall not apply to any Liabilities arising or occurring (a) prior to the Effective Date of this Ground Lease, (b) after the expiration or earlier termination of the Term of this Ground Lease, or (c) as a result of the grossly negligent or wrongful acts or omissions of Lessor, or (d) related to Existing Hazardous Materials on the Premises.
(a) To the fullest extent permitted by law, Tenant hereby agrees to indemnify, hold harmless, protect and defend (with attorneys acceptable to Lessor) Lessor, its elected officials, officers, employees, agents, independent contractors, and the Premises, from and against any and all liabilities, losses, damages (including, but not limited, damages for the loss or restriction on use of rentable or usable space or any amenity of the Premises or damages arising from any adverse impact on marketing and diminution in the value of the Premises), judgments, fines, demands, claims, recoveries, deficiencies, costs and expenses (including, but not limited to, reasonable attorneys' fees, disbursements and court costs and all other professional or consultant's expenses), whether foreseeable or unforeseeable (collectively, "Liabilities"), arising out of the presence, use, generation, storage, treatment, on or off-site disposal or transportation of Hazardous Materials on, into, from, under or about the Premises by Tenant or Tenant Parties, and excluding all Existing Hazardous Materials. To clarify, the foregoing indemnification shall not apply to any Liabilities arising out of Tenant’s discovery of Existing Hazardous Materials on the Premises or attributable to the presence of Existing Hazardous Materials on the Premises.
(b) The foregoing indemnity shall also specifically include the cost of any required or necessary repair, restoration, clean-up or detoxification of the Premises and the preparation of any closure or other required plans; provided, however, Tenant shall have no EXHIBIT 11
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obligation or responsibility for the cost of any repair, remediation, restoration, clean-up or detoxification of the Premises related to Existing Hazardous Materials. (c) The foregoing indemnity and defense obligations (and exclusions therefrom) of this Lease shall survive its expiration or termination; provided, however, that the indemnity contained in this Section 4.4.4 shall not apply to any Liabilities arising or occurring (a) prior to the Effective Date of this Ground Lease, (b) after the expiration or earlier termination of the Term of this Ground Lease, (c) as a result of the grossly negligent or wrongful acts or omissions of Lessor, or (d) related to Existing Hazardous Materials on the Premises.

4.5 Access by Lessor. Lessor reserves the right for County, Agency and their authorized representatives to enter the Premises upon two (2) business days’ prior written notice to Tenant, during normal business hours, in order to determine whether Tenant is complying with Tenant’s obligations hereunder, or to enforce any rights given to County or Agency under this Lease. Lessor and its representatives shall report to the Tenant’s on-site office and must be accompanied by a representative of Tenant at all times while on the Property and obey Tenant’s rules and regulations.

Tenant acknowledges Lessor have the authority to enter the Premises and perform work on the Premises at any time as needed to provide immediate or necessary protection for the general public.

Lessor will take all necessary measures not to unreasonably interfere with Tenant’s business at the Premises in exercising its rights under this Section.

Lessor shall indemnify and hold Tenant harmless from and against any loss, cost, damage or liability, including, without limitation, attorneys’ fees, which results from Lessor’s willful misconduct or gross negligence, or willful misconduct or gross negligence committed by any party acting under Lessor’s authority, of the rights granted by this Section 4.5.

ARTICLE V

CONSTRUCTION OF IMPROVEMENTS

5.1 Construction of Improvements.

5.1.1. Initial Improvements. Upon the fulfillment of the Preconditions set forth in Section 5.1.2, below, and payment for and issuance of all permits required under the Laws (whether from County or City in their governmental capacity, or otherwise), Tenant shall construct the Initial Improvements.

5.1.2. Preconditions. No work for development of the Initial Improvements shall be commenced, and no building or other materials shall be delivered to the Premises, until:
(a
(a) Lessor has provided approval in writing that all the conditions set forth in Section 5 of the Option Agreement have been satisfied;
(b) Tenant has obtained a permit through the City, submitted Project design, conceptual development, plans and special provisions for the construction of Improvements in accordance with the Lessor’s criteria, standard and practices; Commented [ST10]: Estoppe from Landlord must confirm
all preconditions satisfied at closing of USB loan.

Commented [ST11]: Per the recitals, I understood all
option conditions are satisfied prior to executing this Lease.

Commented [ST12]:

Commented [ST13]:

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(bc) Tenant has given Lessor written notice of the proposed commencement of construction of the Premises or the delivery of construction materials in order to allow Lessor to take all necessary actions under California Civil Code section 3094, including posting of a notice of non-responsibility at the Premises; and
(cd) Tenant has provided to Lessor evidence that (i) Tenant has entered into a Construction Contract with a Contractor in accordance with Section 5.2 below, (ii) Tenant has secured the construction funding required under Section 5.1.4 below, and (iii) Tenant has provided Lessor with assurances sufficient to construct the Initial Improvements in accordance with Section

5.3 below.

5.1.3. Utilities. To the extent not already constructed, Tenant, at no cost to Lessor, shall construct or cause to be constructed all water, gas, heat, light, power, air conditioning, telephone, broadband internet, and other utilities and related services supplied to and/or used on the Premises at Tenant’s sole cost and expense for the purposes of conducting Tenant’s operations thereon. All such utilities shall be separately metered from any utilities which may be used by County and/or Agency in conducting its operations, if any, on or about the Premises. Nothing contained in this Section is to be construed or implied to give Tenant the right or permission to install or to permit any utility poles or communication towers to be constructed or installed on the Premises.

5.1.4. Construction Funding. Prior to commencement of construction of the Initial Improvements, Tenant shall provide to Lessor evidence reasonably satisfactory to Lessor of funding available to Tenant that is sufficient to pay for Tenant’s estimated total cost of constructing the Initial Improvements, which evidence may consist of (i) a written commitment to Tenant from a Lender selected by Tenant to provide a construction loan to Tenant for the purpose of constructing the Initial Improvements (which may be secured by a Leasehold Mortgage encumbering Tenant’s leasehold interest under this Lease), (ii) actual equity funds then held by Tenant or irrevocably committed to be paid to Tenant for the purpose of constructing the Initial Improvements, or (iii) any combination of the foregoing. Tenant may from time to time change any of the foregoing funding sources and the allocation thereof, so long as the aggregate available funding continues to be sufficient to pay for Tenant’s estimated remaining cost of constructing the Initial Improvements, provided that Tenant shall promptly notify Lessor of any such change.

5.1.5. Compliance with Laws and Permits. Tenant shall cause all Improvements made by Tenant to be constructed in substantial compliance with all applicable Laws, including all applicable grading permits, building permits, and other permits and approvals issued by governmental agencies and bodies having jurisdiction over the construction thereof. No permit, approval, or consent given hereunder by County and/or Agency, in their governmental capacity, shall affect or limit Tenant’s obligations hereunder, nor shall any approvals or consents given by County and/or Agency, as a Party to this Lease, be deemed approval as to compliance or conformance with applicable governmental codes, laws, rules, or regulations.

5.1.6. Reports. Not less than monthly from the commencement of construction of the Initial Improvements, Tenant shall provide Lessor with written construction status reports in the form of AIA No. G702 (“Application and Certification for Payment”) or comparable form, augmented by oral reports if so requested by County or Agency.

Commented [ST14]: We’ll confirm in the landlord estoppel that the financing conditions are satisfied.

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5.1.7. Certificate of Occupancy. Tenant shall provide Lessor with a copy of the Certificate of Occupancy promptly following issuance thereof. The date of issuance of the Certificate of Occupancy shall be the Commencement Date hereunder.

5.1.8. Insurance. Tenant (or the Contractor, as applicable) shall deliver to Lessor both (i) certificates of insurance evidencing coverage for “builder’s risk,” as specified in Section 8.1, and (ii) evidence of worker’s compensation insurance, which provide the requisite insurance levels in accordance with Article VIII, for all persons employed in connection with the construction of any Improvements upon the Premises and with respect to whom death or bodily injury claims could be asserted against County and/or Agency or the Premises. Tenant shall (or shall cause Contractor to) maintain, keep in force and pay all premiums required to maintain and keep in said insurance herein at all times during which construction Work is in progress.

5.1.9. Mechanic’s Liens.
(a) Payment of Liens. Tenant shall pay or cause to be paid the total cost and expense of all “Work of Improvement,” as that phrase is defined in the California Mechanics’ Lien law in effect and as amended from time to time. Tenant shall not suffer or permit to be enforced against the Premises or Improvements or any portion thereof, any mechanics’, materialmen’s, contractors’ or subcontractors’ liens arising from any work of improvement, however it may arise.

Tenant may, however, in good faith and at Tenant’s sole cost and expense contest the validity of any such asserted lien, claim, or demand, provided Tenant (or any contractor or subcontractor, as applicable) has furnished the release bond (if required by County, Agency or any construction lender) required in California Civil Code section 8000 et seq. (or any comparable statute hereafter enacted for providing a bond freeing the Premises from the effect of such lien claim). In the event a lien or stop-notice is imposed upon the Premises as a result of such construction, repair, alteration, or installation, and provided the lien is not the result of actions of, or work performed by, the Lessor, Tenant shall either:
(1) Record a valid Release of Lien, or
(2) Procure and record a bond in accordance with Section 8424 of the Civil Code, which releases the Premises from the claim of the lien or stop-notice and from any action brought to foreclose the lien, or
(3) Post such security as shall be required by Tenant’s title insurer to insure over such lien or stop-notice, or
(4) Should Tenant fail to accomplish either of the three optional actions above within 30 days after Tenant receives notice of the filing of such a lien or stop-notice, it shall constitute an Event of Default hereunder.
(b) Indemnification. Tenant shall at all times indemnify, defend with counsel approved in writing by County and/or Agency and hold County and Agency harmless from all claims, losses, demands, damages, cost, expenses, or liability costs for labor or materials in connection with construction, repair, alteration, or installation of structures, improvements, equipment, or facilities within the Premises, and from the cost of defending against such claims, including reasonable attorneys’ fees and costs, but excluding any liability resulting from the gross EXHIBIT 11
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negligence or willful misconduct of Lessor, and excluding any liens resulting from the actions of, or work performed by, the Lessor.
(c) Protection Against Liens. Lessor shall have the right to post and maintain on the Premises any notices of non-responsibility provided for under applicable California law. During the course of construction, Tenant shall obtain customary mechanics’ lien waivers and releases. Upon completion of the construction of any Improvements, Tenant shall record a notice of completion in accordance with applicable law. Promptly after the Improvements have been completed, Tenant shall (or shall cause Contractor to) record a notice of completion as defined and provided for in California Civil Code section 8000 et seq. (d) Lessor’s Rights. If Tenant (or any contractor or subcontractor, as applicable) does not cause to be recorded the bond described in California Civil Code section 8000 et seq. or otherwise protect the Premises and Improvements under any alternative or successor statute, and a final judgment has been rendered against Tenant by a court of competent jurisdiction for the foreclosure of a mechanic’s, materialman’s, contractor’s or subcontractor’s lien claim, and if Tenant fails to stay the execution of judgment by lawful means or to pay the judgment, Lessor shall have the right, but not the duty to pay or otherwise discharge, stay or prevent the execution of any such judgment or lien or both. Upon any such payment by County and/or Agency, Tenant shall immediately upon receipt of written request therefor by County or Agency, reimburse County and/or Agency for all sums paid by County and/or Agency under this paragraph together with all County and/or Agency’s reasonable attorney’s fees and costs, plus interest at the Interest Rate from the date of payment until the date of reimbursement.

5.1.10. No Responsibility. Any approvals by County or Agency with respect to any Improvements shall not make County or Agency responsible for the Improvement with respect to which approval is given or the construction thereof. Tenant shall indemnify, defend and hold Lessor harmless from and against all liability and all claims of liability (including, without limitation, reasonable attorneys’ fees and costs) arising during the Term of this Lease for damage or injury to persons or property or for death of persons arising from or in connection with the Improvement or construction thereof, but excluding any liability resulting from the gross negligence or willful misconduct of Lessor, and excluding any liens resulting from the actions of, or work performed by, the Lessor.

5.2 Construction Contracts.

5.2.1. Construction Contract. Tenant shall enter into a written contract with a general contractor (“Contractor”) for construction of the Initial Improvements based upon the “Construction Contract Documents” approved pursuant to the Option Agreement. All construction of the Initial Improvements shall be performed by contractors and subcontractors duly licensed as such under the laws of the State of California. Tenant shall give Lessor a true copy of the contract or contracts with the Contractor.

5.2.2. Assignment to County and/or Agency. Tenant shall obtain the written agreement of the Contractor that, at County and/or Agency’s election and in the event that Tenant fails to perform its contract with the Contractor, such Contractor will recognize County and/or Agency as the assignee of the contract with the Contractor, and that County and/or Agency may, upon such election, assume such contract with credit for payments made prior thereto.

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Notwithstanding the foregoing, the County’s and/or Agency’s rights under this Section 5.2.2 are hereby made subject and subordinate to the lien of each Leasehold Mortgage.

5.3 Tenant’s Assurance of Construction Completion. Prior to commencement of construction of the Initial Improvements, or any phase thereof, within the Premises by Tenant, Tenant shall furnish to Lessor evidence that assures Lessor that sufficient monies will be available to complete the proposed construction. The amount of money available shall be at least the total estimated construction cost. Such evidence may take one of the following forms:

5.3.1. Performance bond and labor and materials bond in a principal sum equal to the total estimated construction cost supplied by Contractor or subcontractors, provided said bonds are issued jointly to Tenant, County, Agency and any Leasehold Mortgagees as obligees.

5.3.2. Irrevocable letter of credit issued to Lessor from a financial institution to be in effect until County and Agency acknowledges satisfactory completion of construction;

5.3.3. Cash deposited with the County or Agency (may be in the form of cashier’s check or money order or may be electronically deposited);

5.3.4. A completion guaranty, in favor of County and Agency from an Affiliate of The Related Companies of California, LLC, in a form reasonably acceptable to Lessor, coupled with a repayment guaranty in favor of the senior construction lender for its loan;

5.3.4. Any combination of the above.

All bonds and letters of credit must be issued by a company qualified to do business in the State of California and acceptable to Lessor. All bonds and letters of credit shall be in a form acceptable to Lessor, County’s Risk Manager and City’s Risk Manager in their reasonable discretion, and shall insure faithful and full observance and performance by Tenant of all terms, conditions, covenants, and agreements relating to the construction of improvements within the Premises.

Tenant shall provide or cause its Contractor to provide payment and/or performance bonds in connection with the construction of the Initial Improvements, and shall name the County and City as an additional obligee on, with the right to enforce, any such bonds.

5.4 Ownership of Improvements.

5.4.1. For purposes of this Section 5.4, “Term” shall have the meaning stated in Section 2.2.3.

5.4.2. During Term. Fee title to all personal property and Improvements constructed or placed on the Premises by Tenant and paid for by Tenant are and shall be vested in Tenant during the Term of this Lease, until the expiration or earlier termination thereof. Any and all depreciation, amortization and tax credits for federal or state purposes relating to the Improvements located on the Premises and any and all additions thereto shall be deducted or credited exclusively by Tenant during the Term. The Parties agree for themselves and all persons claiming under them that the Improvements are real property.

Commented [ST15]: We’ll want confirmation these
conditions are satified in the landlord estoppel.

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5.4.3. Upon Expiration or Earlier Termination of Term. All Improvements on the Premises at the expiration or earlier termination of the Term of this Lease shall, without additional payment to Tenant, then become Lessor’s property free and clear of all claims to or against them by Tenant and free and clear of all Leasehold Mortgages and any other liens and claims arising from Tenant’s use and occupancy of the Premises, and with Taxes paid current as of the expiration or earlier termination date. Tenant shall upon the expiration or earlier termination of the Term deliver possession of the Premises and the Improvements to Lessor in good order, condition and repair consistent with the requirements of this Lease and in compliance with all applicable laws and regulations for the occupancy of the Project, taking into account reasonable wear and tear and the age of the Improvements.

Notwithstanding anything to the contrary herein, at all times during the Term of this Lease, (i) the improvements shall be owned by Tenant, (ii) Tenant alone shall be entitled to all of the tax attributes of ownership, including, without limitation, the right to claim depreciation or cost recovery deductions and the right to claim the low-income housing tax credit described in Section 42 of the Internal Revenue Code of 1986, as amended, and (iii) Tenant shall have the right to amortize capital costs and to claim any other federal or state tax benefit attributable to the Project.

5.5 “AS-BUILT” Plans. Within sixty (60) days following completion of any substantial improvement within the Premises, Tenant shall furnish the Lessor a complete set of reproducibles and two sets of prints of “As-Built” plans and a magnetic tape, disk or other storage device containing the “As-Built” plans in a form usable by Lessor, to Lessor’s satisfaction, on Lessor’s computer aided mapping and design (“CAD”) equipment. CAD files are also to be converted to Acrobat Reader (pdf format), which shall be included on the disk or CD ROM. In addition, Tenant shall furnish Lessor copy of the final construction costs for the construction of such improvements.

5.6 Capital Improvement Fund.

5.6.1. As of the conversion of the construction financing for the Project to the term phase financing, Tenant shall establish and maintain a reserve fund (the "Capital Improvement Fund") during the Term of this Lease (as “Term” is defined in Section 2.2) in accordance with the provisions of this Section 5.6 designated to pay for Permitted Capital Expenditures (as defined below) for the Improvements during the Term of this Lease.

5.6.2. Tenant and Lessor agree and acknowledge that the purpose of the Capital Improvement Fund shall be to provide sufficient funds to pay for the costs of major replacements, renovations or significant upgrades of or to the Improvements, including without limitation building facade or structure and major building systems (such as HVAC, mechanical, electrical, plumbing, vertical transportation, security, communications, structural or roof) that significantly affect the capacity, efficiency, useful life or economy of operation of the Improvements or their major systems, after the completion of the Initial Improvements (“Permitted Capital Expenditure(s)”).

5.6.3. The Capital Improvement Fund shall not be used to fund any portion of the construction cost of the Initial Improvements. In addition, Permitted Capital Expenditures shall not include the cost of periodic, recurring or ordinary maintenance expenditures or maintenance, repairs or replacements that keep the Improvements in an ordinarily efficient operating condition, but that do not significantly add to their value or appreciably prolong their useful life. Permitted Capital Expenditures must constitute capital replacements, improvements or equipment under generally Commented [ST16]: Please include as was done in the
Stanton Inn ground lease. Thanks.

Commented [ST17]: As in Stanton Inn, the reserve deposits will commence concurrent with the conversion to the perm phase. Please sync up with that timing if possible.

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accepted accounting principles consistently applied or constitute qualifying aesthetic improvements.

Permitted Capital Expenditures shall not include costs for any necessary repairs to remedy any broken or damaged Improvements, all of which costs shall be separately funded by Tenant.

5.6.4. All specific purposes and costs for which Tenant desires to utilize amounts from the Capital Improvement Fund shall be at Tenant’s reasonable discretion and subject to Lessor's written approval as provided for in Section 5.6.9, below. Tenant shall furnish to the Lessor applicable invoices, evidence of payment and other back-up materials concerning the use of amounts from the Capital Improvement Fund.

5.6.5. The Capital Improvement Fund shall be held in an account established with a Lender acceptable to the Lessor, into which deposits shall be made by Tenant pursuant to Section

5.6.8, below.

5.6.6. Tenant shall have the right to partly or fully satisfy the Capital Improvement Fund obligations of this Section 5.6 with capital improvement reserves (or replacement reserves) required by Tenant's Leasehold Mortgagees or the Limited Partner, as long as such capital improvement reserves or replacement reserves are in all material respects administered and utilized in accordance, and otherwise comply, with the terms, provisions and requirements of this Section 5.6.

5.6.7. In the event of default by Tenant and the early termination of this Lease, the Lessor shall have full access to the Capital Improvement Fund, provided the Tenant’s Leasehold Mortgagee does not use it within a reasonable time for the purposes stated in this Section 5.6; provided, however, that Lessor’s rights under this Section 5.6.7 are hereby made subject and subordinate to the lien of each Leasehold Mortgage.

5.6.8. Commencing on the fifteenth (15th) day of the month during which the fifth (5th) anniversary of the Commencement Date occurs, and continuing on or before the fifteenth (15th) day of each month thereafter until five (5) years prior to the expiration of the Term, Tenant shall make a monthly depositan annual contribution to the Capital Improvement Fund in an amount equal to one three-hundred dollars ($300) per unit per year for 66 of the units and five hundred dollars ($500) per unit per year for the 20 MHSA units, with a ten-percent (110%) of total rent collected by Tenant from sub-tenants for the previous month escalator applied every five (5) years commencing on the date set forth in this Section 5.6.8. All interest and earnings on the Capital Improvement Fund shall be added to the Capital Improvement Fund, but shall not be treated as a credit against the Capital Improvement Fund deposits required to be made by Tenant pursuant to this Section 5.6.

5.6.9. Disbursements shall be made from the Capital Improvement Fund only for costs which satisfy the requirements of this Section 5.6. For the purpose of obtaining the Lessor's prior approval of any Capital Improvement Fund disbursements, Tenant shall submit to the Lessor on an annual calendar year basis a capital expenditure plan for the upcoming year which details the amount and purpose of anticipated Capital Improvement Fund expenditures (“Capital Improvement Plan”). Lessor shall approve or disapprove such Capital Improvement Plan within thirty (30) days of receipt, which approval shall not be unreasonably withheld, conditioned or delayed. Any expenditure set forth in the approved Capital Improvement Plan shall be considered pre-approved by Lessor (but only up to the amount of such expenditure set forth in the Capital Improvement Plan) for the duration of the upcoming year. Tenant shall have the right during the course of each year to submit to the Lessor for the Lessor's approval revisions to the then current Capital Improvement Plan, or individual expenditures not noted on the previously submitted Capital Improvement Plan.

Commented [ST18]: Capitalized reserve requirement
should match what is actually anticipated to be deposited monthly. I’m anticipating $347/unit per year with a 10% escalator every 5 years.

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In the event of an unexpected emergency that necessitates a Permitted Capital Expenditure not contemplated by the Capital Improvement Plan, the Tenant may complete such work using the funds from the Capital Improvement Fund with contemporaneous or prior (if possible) written notice to the Lessor and provide applicable documentation to the Lessor thereafter for approval. If the Lessor disapproves the emergency expenditure which was not previously approved by Lessor, Tenant shall refund the amount taken from the Capital Improvement Fund within thirty (30) days of written notice from the Lessor of its decision.

5.6.10. Notwithstanding anything above to the contrary, if Tenant incurs expenditures that constitute Permitted Capital Expenditures but which are not funded out of the Capital Improvement Fund because sufficient funds are not then available in such fund, then Tenant may credit the Permitted Capital Expenditures so funded by Tenant out of its own funds against future Capital Improvement Fund contribution obligations of Tenant; provided, that such credit must be applied, if at all, within four (4) years after such Permitted Capital Expenditure is incurred by the Tenant.

ARTICLE VI

REPAIRS, MAINTENANCE, ADDITIONS AND RECONSTRUCTION

6.1 Maintenance by Tenant. Throughout the Term of this Lease, Tenant shall, at Tenant’s sole cost and expense, keep and maintain the Premises and any and all Improvements now or hereafter constructed and installed on the Premises in good order, condition and repair (i.e., so that the Premises does not deteriorate more quickly than its age and reasonable wear and tear would otherwise dictate) and in a safe and sanitary condition and in compliance with all applicable Laws in all material respects. Tenant shall immediately notify the Lessor of any damage relating to the Premises.

6.2 Interior Improvements, Additions and Reconstruction of Improvements. Following the completion of construction of the Initial Improvements, Tenant shall have the right from time to time to make any interior improvements to the Improvements that are consistent with the Lessor’s approved use of the Premises as reflected in this Lease, without Lessor’s prior written consent, but with prior written notice to the Lessor (except in the event of an emergency, in which case no prior written notice shall be required but Tenant shall notify Lessor of any emergency work done as soon as practicable). Tenant may restore and reconstruct the Improvements into the condition such Improvements were in immediately prior to such damage or destruction, and in that process make any modifications otherwise required by changes in Laws, following any damage or destruction thereto (whether or not required to do so under Article VII); and/or to make changes, revisions or improvements to the Improvements for uses consistent with the Lessor approved use of the Premises as reflected in this Lease. Tenant shall perform all work authorized by this Section at its sole cost and expense, including, without limitation, with insurance proceeds approved for such use in accordance with Article VII, if any, and in compliance with all applicable Laws in all material respects.

6.3 All Other Construction, Demolition, Alterations, Improvements and Reconstruction. Following the completion of construction of the Initial Improvements, and except as specified in Sections 6.1 and 6.2, any construction, alterations, additions, demolition, improvements of any kind shall require the prior written consent of the Lessor, which consent shall not be unreasonably conditioned, delayed or withheld and if not contemplated pursuant to this Lease may require their respective governing body’s approval (e.g. Board of Supervisors’ and City Council Commented [ST19]: For this to be financeable, lender
needs to know that it can at least rebuild the same
approved project without the requirement of any consent from Lessor. This language conforms to the ground lease for Stanton Inn.

Commented [ST20]: Consent to make necessary requires
(even if major) should not be required. Lender needs to know that it can make repairs when necessary.

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approval). Tenant shall perform all work authorized by this Section at its sole cost and expense, including, without limitation, with insurance proceeds approved for such use in accordance with Article VII, if any, and in compliance with all applicable Laws in all material respects.

6.4 Requirements of Governmental Agencies. At all times during the Term of this Lease, Tenant, at Tenant’s sole cost and expense, shall: (i) make all alterations, improvements, demolitions, additions or repairs to the Premises and/or the Improvements required to be made by any law, ordinance, statute, order or regulation now or hereafter made or issued by any federal, state, county, local or other governmental agency or entity; (ii) observe and comply in all material respects with all Laws now or hereafter made or issued respecting the Premises and/or the Improvements (subject to Tenant’s right to contest such Laws in accordance with Section 4.4); (iv) indemnify, defend and hold County, Agency, the Premises and the Improvements free and harmless from any and all liability, loss, damages, fines, penalties, claims and actions resulting from Tenant’s failure to comply with and perform the requirements of this Article VI.

6.5 Lessor Obligations. Tenant specifically acknowledges and agrees that County, Agency and Lessor Parties do not and shall not have any obligations with respect to the maintenance, alteration, improvement, demolition, replacement, addition or repair of any Improvements.

6.6 Lessor Reservations. Without limiting Lessor’s rights with respect to the Premises, Lessor reserves for themselves, their successors and assigns those rights necessary to assure proper maintenance and operation of the Premises and to permit any steps to be taken which the Lessor deems necessary or desirable to maintain, repair, improve, modify or reconstruct the Premises. The rights reserved to Lessor in this section or any other section of this Lease shall be exercised by the Lessor at their sole discretion, unless otherwise provided herein.

ARTICLE VII

DAMAGE AND RESTORATION

7.1 Damage and Restoration. In the event the whole or any part of the Improvements shall be damaged or destroyed by fire or other casualty, damage or action of the elements which is fully covered by insurance required to be carried by Tenant pursuant to this Lease or in fact caused by Tenant, at any time during the Term, Tenant shall with all due diligence, at Tenant’s sole cost and expense, repair, restore and rebuild the Improvements on substantially the same plan and design as existed immediately prior to such damage or destruction and to substantially the same condition that existed immediately prior to such damage, with any changes made by Tenant to comply with then applicable Laws and with any upgrades or improvements that Tenant may determine in its reasonable discretion. If Tenant desires to change the use of the Premises following such casualty, then Tenant may make appropriate changes to the Premises to accommodate such changed use after approval of such change of use by the Lessor pursuant to Article IV above. This Article shall not apply to cosmetic damage or alterations. In the event that Tenant shall determine, subject to the rights of the Leasehold Mortgagees and Limited Partner, if applicable, by notice to the Lessor given by the later of ninety (90) days after the date of the damage or destruction or thirty (30) days after receipt by Tenant of any such insurance proceeds, that there are not adequate proceeds to restore the Improvements and/or the Premises to substantially the same condition in which they existed prior to EXHIBIT 11
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the occurrence of such damage or destruction, then Tenant may, with the prior consent of all Leasehold Mortgagees, terminate this Lease as of a date that is not less than thirty (30) days after the date of such notice. If Leasehold Mortgagees refuse to consent to the termination of the Lease by Tenant, the Lease and all terms and conditions shall remain in full force and effect and may be enforced without reservation by the Lessor. Subject to the rights of Leasehold Mortgagees in Section 17.9, if Tenant terminates this Lease pursuant to this Section 7.1, Tenant shall surrender possession of the Premises to the Lessor immediately and assign to the Lessor (or, if same has already been received by Tenant, pay to the Lessor) all of its right, title and interest in and to the proceeds from Tenant’s insurance upon the Premises, less (i) any costs, fees, or expenses incurred by Tenant in connection with the adjustment of the loss or collection of the proceeds, (ii) any reasonable costs incurred by Tenant in connection with the Premises after the damage or destruction, which costs are eligible for reimbursement from such insurance proceeds, (iii) any amounts applied by Leasehold Mortgagees in accordance with the terms of their respective Leasehold Mortgages, and (iv) the proceeds of any rental loss or business interruption insurance applicable prior to the date of surrender of the Premises to the Lessor.

7.2 Restoration. In the event of any restoration or reconstruction pursuant to this Section, all such work performed by Tenant shall be constructed in a good and workmanlike manner according to and in conformance with the Laws, rules and regulations of all governmental bodies and agencies and the requirements of this Lease applicable to the construction of the Initial Improvements.

7.3 No Rental Abatement. Tenant shall not be entitled to any abatement, allowance, reduction, or suspension of Rent because part or all of the Improvements become untenantable as a result of the partial or total destruction of the Improvements, and Tenant’s obligation to keep and perform all covenants and agreements on its part to be kept and performed hereunder, shall not be decreased or affected in any way by any destruction of or damage to the Improvements; except as otherwise provided herein.

7.4 Application of Insurance Proceeds. If following the occurrence of damage or destruction to the Premises or Improvements, Tenant is obligated to or determines that there are adequate proceeds to restore the Premises and Improvements pursuant to this Article VII, then all proceeds from the insurance required to be maintained by Tenant on the Premises and the Improvements shall be applied, subject to the rights of the Leasehold Mortgagees and Limited Partner, if applicable, to fully restore the same, and, subject to the rights of the Leasehold Mortgagees and Limited Partner, if applicable, any excess proceeds shall be paid to Tenant and any deficit in necessary funds plus the amount of any deductible shall be paid by Tenant. If Tenant after commencing or causing the commencement of the restoration of Premises and Improvements shall determine that the insurance proceeds are insufficient to pay all costs to fully restore the Improvements, Tenant shall pay the deficiency and shall nevertheless proceed to complete the restoration of Premises and the Improvements and pay the cost thereof. Upon lien free completion of the restoration, subject to the rights of the Leasehold Mortgagees, if applicable, any balance of the insurance proceeds remaining over and above the cost of such restoration shall be paid to Tenant.

7.5 Exclusive Remedies. Notwithstanding any destruction or damage to the Premises and/or the Improvements, Tenant shall not be released from any of its obligations under this Lease, except to the extent and upon the conditions expressly stated in this Article VII. County, Agency and Tenant hereby expressly waive the provisions of California Civil Code Sections 1932(2) and EXHIBIT 11
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1933(4) with respect to any damage or destruction of the Premises and/or the Improvements and agree that their rights shall be exclusively governed by the provisions of this Article VII.

7.6 Damage Near End of Term. If, during the last three (3) years of the Term, as applicable, the Improvements shall be damaged or destroyed for which the repair and/or replacement cost is fifty percent (50%) or more of then replacement cost of the Improvements, then Tenant shall have the option, to be exercised within ninety (90) days after such damage or destruction:

7.6.1. to notify the Lessor of its election to repair or restore the Improvements as provided in this Article VII; or

7.6.2. subject to the rights of Leasehold Mortgagees and such provisions of this Lease that survive termination, to terminate this Lease by notice to the Lessor, which termination shall be deemed to be effective as of the date of the damage or destruction. If Tenant terminates this Lease pursuant to this Section 7.6.2, Tenant shall surrender possession of the Leased Premises to the Lessor immediately and assign to the Lessor (or, if same has already been received by Tenant, pay to the Lessor) all of its right, title and interest in and to the proceeds from Tenant's insurance upon the Premises less (i) any costs, fees, or expenses incurred by Tenant in connection with the adjustment of the loss or collection of the proceeds, (ii) any reasonable costs incurred by Tenant in connection with the Premises after the damage or destruction, which costs are eligible for reimbursement from such insurance proceeds, and (iii) the proceeds of any rental loss or business interruption insurance applicable prior to the date of surrender of the Premises to the Lessor.

ARTICLE VIII

INSURANCE AND INDEMNITY

8.1 Tenant's Required Insurance.

8.1.1. Tenant agrees to purchase all required insurance at Tenant's expense and to deposit with Chief Real Estate Officer certificates of insurance, including all endorsements required herein, necessary to satisfy Chief Real Estate Officer that the insurance provisions of this Lease have been complied with and to keep such insurance coverage and the certificates and endorsements therefore on deposit with Chief Real Estate Officer during the entire term of this Lease.

8.1.2. Tenant agrees that it shall not operate on the Premises at any time the required insurance is not in full force and effect as evidenced by a certificate of insurance and necessary endorsements or, in the interim, an official binder being in the possession of Chief Real Estate Officer; rent however shall not be suspended. In no cases shall assurances by Tenant, its employees, agents, including any insurance agent, be construed as adequate evidence of insurance. Chief Real Estate Officer will only accept valid certificates of insurance and endorsements, or in the interim, an insurance binder as adequate evidence of insurance. Tenant also agrees that upon cancellation, termination, or expiration of Tenant's insurance, Chief Real Estate Officer may take whatever steps are necessary to interrupt any operation from or on the Premises until such time as the Chief Real Estate Officer reinstates the Lease.

8.1.3. If Tenant fails to provide Chief Real Estate Officer with a valid certificate of insurance and endorsements, or binder at any time during the term of the Lease, County and Tenant agree that this shall constitute a material breach of the Lease. Whether or not a notice of default has or has not been sent to Tenant, said material breach shall permit Chief Real Estate Officer to take EXHIBIT 11
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whatever steps are necessary to interrupt any operation from or on the Premises, and to prevent any persons, including, but not limited to, members of the general public, and Tenant's employees and agents, from entering the Premises until such time as the Chief Real Estate Officer is provided with adequate evidence of insurance required herein. Tenant further agrees to hold County harmless for any damages resulting from such interruption of business and possession, including, but not limited to, damages resulting from any loss of income or business resulting from Chief Real Estate Officer's action.

8.1.4. All contractors and subcontractors performing work on behalf of Tenant pursuant to this Lease shall obtain insurance subject to the same terms and conditions as set forth herein for Tenant and limits of insurance as described in Section 8.1.6 (e), Section 8.1.6 (f) and Section 8.1.6 (g). Tenant shall not allow contractors or subcontractors to work if contractors have less than the level of coverage required by County under this Lease. It is the obligation of the Tenant to provide written notice of the insurance requirements to every contractor and to receive proof of insurance prior to allowing any contractor to begin work within the Premises. Such proof of insurance must be maintained by Tenant through the entirety of this Lease and be available for inspection by Chief Real Estate Officer at any reasonable time.

8.1.5. All self-insured retentions (SIRs) shall be clearly stated on the Certificate of Insurance. Any self-insured retention (SIR) in an amount in excess of Fifty Thousand Dollars ($50,000) shall specifically be approved by the County’s Risk Manager, or designee, upon review of Tenant’s current audited financial report. If Tenant’s SIR is approved, Tenant, in addition to, and without limitation of, any other indemnity provision(s) in this Lease, agrees to all of the following:
1) In addition to the duty to indemnify and hold the County harmless against any and all liability, claim, demand or suit resulting from Tenant’s, its agents, employee’s or subcontractor’s performance of this Lease, Tenant shall defend the County at its sole cost and expense with counsel approved by Board of Supervisors against same; and 2) Tenant’s duty to defend, as stated above, shall be absolute and irrespective of any duty to indemnify or hold harmless; and
3) The provisions of California Civil Code Section 2860 shall apply to any and all actions to which the duty to defend stated above applies, and the Tenant’s SIR provision shall be interpreted as though the Tenant was an insurer and the County was the insured.

If the Tenant fails to maintain insurance acceptable to the County or City for the full term of this Lease, the County or City may terminate this Lease.

8.1.6. All policies of insurance required under this Article VIII must be issued by an insurer with a minimum rating of A- (Secure A.M. Best's Rating) and VIII (Financial Size Category as determined by the most current edition of the Best's Key Rating Guide/PropertyCasualty/United States or ambest.com). It is preferred, but not mandatory, that the insurer must be licensed to do business in the state of California.
(a) If the insurance carrier does not have an A.M. Best Rating of A-/VIII, the Chief Real Estate Officer retains the right to approve or reject a carrier after a review of the carrier's performance and financial ratings.

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(b) If the insurance carrier is not an admitted carrier in the state of California and does not have an A.M. Best rating of A-/VIII, the Chief Real Estate Officer retains the right to approve or reject a carrier after a review of the company's performance and financial ratings. (c.1) The policy or policies of insurance maintained by the TENANT DURING CONSTRUCTION shall provide the minimum limits and coverage as set forth below:

Coverages Minimum Limits
Builder's Risk (during the Construction Period)
naming retained General Contractor
Project value and no coinsurance
provision.

Commercial General Liability $5,000,000 per occurrence
$5,000,000 aggregate
Automobile Liability including coverage for owned,
non-owned and hired vehicles
$1,000,000 limit per occurrence
Workers' Compensation Statutory Minimum
Employers' Liability Insurance $1,000,000 per occurrence (c.2) The policy or policies of insurance maintained by the TENANT’S GENERAL CONTRACTOR DURING CONSTRUCTION shall provide the minimum limits and coverage as set forth below:

Coverages Minimum Limits
Commercial General Liability $5,000,000 per occurrence
$10,000,000 aggregate
Automobile Liability including coverage for owned,
non-owned and hired vehicles
$2,000,000 limit per occurrence
Workers' Compensation Statutory Minimum
Employers' Liability Insurance $1,000,000 per occurrence Contractor’s Pollution Liability including NODS $5,000,000 per claims made or per occurrence
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(d) The policy or policies of insurance maintained by the TENANT’S SUBCONTRACTORS DURING CONSTRUCTION shall provide the minimum limits and coverage as set forth below:

Coverages Minimum Limits
Commercial General Liability $1,000,000 per occurrence
$2,000,000 aggregate
Automobile Liability including coverage for owned,
non-owned and hired vehicles
$1,000,000 limit per occurrence
Workers' Compensation Statutory Minimum
Employer’s Liability Insurance (not required for
self-employed subcontractors)
$1,000,000 per occurrence
Contractor’s Pollution Liability including NODS
(Required only of those subcontractors involved in
pollution remediation)
$1,000,000 per claims made or per
occurrence
(e) The policy or policies of insurance maintained by the ARCHITECTENGINEER shall provide the minimum limits and coverage as set forth below:

Coverages Minimum Limits
Professional Liability (architect, structural,
electrical engineer, mechanical/plumbing
engineering, environmental engineer, civil engineer,
landscape architect, and geotechnical engineer)
$2,000,000 per occurrence
$2,000,000 aggregate
Commercial General Liability $1,000,000 per occurrence
$2,000,000 aggregate
Automobile Liability including coverage for owned,
non-owned and hired vehicles
$1,000,000 limit per occurrence
Workers' Compensation Statutory Minimum
Employers' Liability Insurance $1,000,000 per occurrence (f) The policy or policies of insurance maintained by the TENANT AFTER CONSTRUCTION shall provide the minimum limits and coverage as set forth below:

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Coverages Minimum Limits
Commercial General Liability
Including Sexual Misconduct (defined as abuse,
molestation and assault and battery)
$5,000,000 per occurrence
$5,000,000 aggregate
Automobile Liability including coverage for owned,
non-owned and hired vehicles
$1,000,000 limit per occurrence
Workers' Compensation Statutory Minimum
Employers' Liability Insurance $1,000,000 per occurrence Commercial Property Insurance on an "All Risk" or
"Special Causes of Loss" basis covering all
buildings, contents and any tenant improvements
including Business Interruption/Loss of Rents with
a 12 month limit
100% of the Replacement Cost Value
and no coinsurance provision
Tenant shall provide a builder’s risk policy, naming the Contractor, providing coverage for the full project value and no coinsurance provision. The policy shall provide coverage for all perils excluding earthquake, and flood. Tenant is responsible for any deductible amount. The County of Orange and the Housing Authority of the City of Santa Ana shall be named as Loss Payees as its financial interests may appear. This shall be evidenced by a Loss Payee endorsement which shall accompany the Certificate of Insurance.

The Builder's Risk policy shall not be required to cover any tools, equipment, or supplies, unless such tools, equipment, or supplies are part of the Work being constructed. The Contractor shall be responsible for securing and maintaining appropriate insurance on any tools, equipment, or supplies that are not part of the work being constructed.

The County and the Contractor waive all rights against each other and the subcontractors, subsubcontractors, officers, and employees of each other, and the Contractor waives all rights against County’s separate contractors, if any, and their subcontractors, sub-subcontractors, officers and employees for damages caused by fire or other perils to the extent paid by the Builder’s Risk insurance, except such rights as they may have to the proceeds of such insurance. The Contractor shall require of its subcontractors and sub-subcontractors by appropriate agreements, similar waivers, each in favor of all other parties enumerated in the preceding sentence. (g) The policy or policies of insurance maintained by the TENANT’S CONTRACTOR AFTER CONSTRUCTION shall provide the minimum limits and coverage as set forth below when performing maintenance and minor work after the building is in operation:

Coverages Minimum Limits
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Commercial General Liability $1,000,000 per occurrence
$2,000,000 aggregate
Automobile Liability including coverage for owned,
non-owned and hired vehicles
$1,000,000 limit per occurrence
Workers' Compensation Statutory Minimum
Employers' Liability Insurance $1,000,000 per occurrence

8.1.7. Required Coverage Forms.
(a) The Commercial General Liability coverage shall be written on Insurance Services Office (ISO) form CG 00 01, or a substitute form providing liability coverage at least as broad.
(b) The Business Auto Liability coverage shall be written on ISO form CA 00 01, CA 00 05, CA 00 12, CA 00 20, or a substitute form providing liability coverage as broad.

8.1.8. Required Endorsements. The Commercial General Liability policy shall contain the following endorsements, which shall accompany the Certificate of insurance:
1) An Additional Insured endorsement using ISO form CG 20 26 04 13 or a form at least as broad naming the County of Orange, City of Santa Ana, and their respective elected and appointed officials, officers, employees, agents as Additional Insureds. Blanket coverage may also be provided which will state, as required by Lease. 2) A primary non-contributing endorsement using ISO form CG 20 01 04 13, or a form at least as broad, evidencing that the TENANT’s insurance is primary and any insurance or self-insurance maintained by the County of Orange shall be excess and non-contributing. 3) A Products and Completed Operations endorsement using ISO Form CG2037 (ed.04/13) or a form at least as broad, or an acceptable alternative is the ISO from CG2010 (ed. 11/85). (Pertains to contractors and subcontractors performing major construction).

Contractors shall maintain Products and Completed Operations coverage for ten (10) years following completion of construction.

The Contactors Pollution Liability and Pollution Liability policies shall contain the following endorsements, which shall accompany the Certificate of Insurance:
1) An Additional Insured endorsement naming the County of Orange, City of Santa Ana, and their respective elected and appointed officials, officers, employees, and agents as Additional Insureds.
2) A primary non-contributing endorsement evidencing that the Contractor's insurance is primary and any insurance or self-insurance maintained by County shall be excess and non-contributing.

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(a) The Workers' Compensation policy shall contain a waiver of subrogation endorsement waiving all rights of subrogation against the County of Orange, City of Santa Ana, and their respective elected and appointed officials, officers, agents and employees. (b) All insurance policies required by this Lease shall waive all rights of subrogation against the County of Orange, City of Santa Ana, and their respective elected and appointed officials, officers, agents and employees when acting within the scope of their appointment or employment.
(c) The Commercial Property Building policy shall include the County of Orange and City of Santa Ana as both Named Insureds. A Certificate of Insurance shall be submitted as evidence of this requirement. The Builders’ Risk policy shall be endorsed to include the County of Orange and City of Santa Ana as Loss Payees. A Loss Payee endorsement shall be submitted with the Certificate of Insurance as evidence of this requirement. (d) Tenant shall notify County and City in writing within thirty (30) days of any policy cancellation and ten (10) days for non-payment of premium and provide a copy of the cancellation notice to the County and City. Failure to provide written notice of cancellation may constitute a material breach of the Lease, after which the County or City may suspend or terminate this Lease.
(e) The Commercial General Liability policy shall contain a severability of interests clause, also known as a "separation of insureds" clause (standard in the ISO CG 001 policy). (f) If Contractor’s Pollution Liability and Pollution Liability are claims-made policies, Contractor shall agree to maintain coverage for five (5) years following completion of the construction. If Contractor’s Professional Liability is a claims-made policy, Contractor shall agree to maintain coverage for ten (10) years following the completion of construction. Products and Completed Operations coverage shall be maintained for ten (10) years following the completion of construction.
(g) Insurance certificates should be forwarded to County and City addresses provided in Section 18.19 below. Tenant has ten (10) business days to provide adequate evidence of insurance or it shall constitute an Event of Default.
(h) County or City expressly retains the right to require Tenant to increase or decrease insurance of any of the above insurance types throughout the term of this Lease which shall be mutually agreed upon by County, City and Tenant.
(i) Chief Real Estate Officer shall notify Tenant in writing of changes in the insurance requirements consistent with subsection (h) above. If Tenant does not deposit copies of certificates of insurance and endorsements with Chief Real Estate Officer incorporating such changes within thirty (30) days of receipt of such notice, it shall constitute an Event of Default. (j) The procuring of such required policy or policies of insurance shall not be construed to limit Tenant's liability hereunder nor to fulfill the indemnification provisions and requirements of this Lease, nor in any way to reduce the policy coverage and limits available from the insurer.

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8.2 Indemnification. Tenant agrees to assume all risks, financial or otherwise, associated with the Premises. Tenant hereby releases and waives all claims and recourse against Lessor, including the right of contribution for loss or damage of persons or property, arising from, growing out of or in any way connected with or related to this Lease, including any damage to or interruption of use of the Premises including, but not limited to, loss of business, damage to, destruction of, or relocation costs of Tenant’s Improvements or impaired utility of the Premises caused by erosion, flood, or flood overflow, or caused by any action undertaken in the operation, maintenance, repair, reconstruction, replacement, enlargement or improvement of the Premises except claims arising from the gross negligence or willful misconduct of County or Agency, their officers, agents, employees and contractors. Tenant hereby agrees to indemnify, defend (with counsel approved in writing by Lessor, in Lessor’s reasonable discretion), and hold harmless, County and the Agency, their respective elected and appointed officials, officers, agents, employees and contractors against any and all claims, losses, demands, damages, cost, expenses or liability for injury to any persons or property, arising out of the operation or maintenance of the Premises, and/or Tenant’s exercise of the rights under this Lease, except for liability arising out of the gross negligence or willful misconduct of County or Agency, their elected and appointed officials, officers, agents, employees or contractors including the cost of defense of any lawsuit arising therefrom, and except for claims arising after the later to occur of the expiration or earlier termination of the Term, or the date Tenant vacates the Premises. If County and/or Agency is named as co-defendant in a lawsuit in connection with this Lease, Tenant shall notify Lessor of such fact and shall represent the County and/or Agency in such legal action unless County or Agency undertakes to represent themselves as co-defendant in such legal action, in which event, Tenant shall pay to Lessor their litigation costs, expenses, and reasonable attorneys' fees. If judgment is entered against County and/or Agency and Tenant by a court of competent jurisdiction because of the concurrent active negligence of County and/or Agency and Tenant, County, Agency and Tenant agree that liability will be apportioned as determined by the court. Neither Party shall request a jury apportionment. A judgment or other judicial determination regarding Lessor’s negligence shall not be a condition precedent to Tenant’s obligations stated in this Section.

Tenant acknowledges that it is familiar with the language and provisions of California Civil Code Section 1542 which provides as follows:

A general release does not extend to claims which the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that if known by him or her, would have materially affected his or her settlement with the debtor or released party.

Tenant, being aware of and understanding the terms of Section 1542, hereby waives all benefit of its provisions to the extent described in this paragraph.

The foregoing indemnity and defense obligations of this Lease shall survive its expiration or termination. This Section 8.2 notwithstanding, indemnification with respect to Hazardous Materials shall be governed by Section 4.4.4.

8.3 Damage to Tenant’s Premises. Lessor shall not be liable for injury or damage which may be sustained by the person, goods, wares, merchandise, or other property of Tenant, of Tenant’s employees, invitees, customers, or of any other person in or about the Premises or the Improvements caused by or resulting from any peril which may affect the Premises or Improvements, including fire, steam, electricity, gas, water, or rain which may leak or flow from or into any part of the Premises or the Improvements, whether such damage or injury results from conditions arising upon the Premises EXHIBIT 11
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or from other sources; provided, however, Lessor shall be liable for injury or damage under this Section 8.3 resulting from County or Agency, their elected and appointed officials, officers, agents, employees or contractor’s gross negligence or willful misconduct.

ARTICLE IX

CONDEMNATION

9.1 Definitions.

9.1.1. “Condemnation” means (i) the taking or damaging, including severance damage, by eminent domain or by inverse condemnation or for any public or quasi-public use under any statute, whether by legal proceedings or otherwise, by a Condemnor (hereinafter defined), and (ii) a voluntary sale or transfer to a Condemnor, either under threat of condemnation or while condemnation legal proceedings are pending.

9.1.2. “Date of Taking” means the later of (i) the date actual physical possession is taken by the Condemnor; or (ii) the date on which the right to compensation and damages accrues under the law applicable to the Premises.

9.1.3. “Award” means all compensation, sums or anything of value awarded, paid or received for a Total Taking, a Substantial Taking or a Partial Taking (hereinafter defined), whether pursuant to judgment or by agreement or otherwise.

9.1.4. “Condemnor” means any public or quasi-public authority or private corporation or individual having the power of condemnation.

9.1.5. “Total Taking” means the taking by Condemnation of all of the Premises and all of the Improvements.

9.1.6. “Substantial Taking” means the taking by Condemnation of so much of the Premises or Improvements or both that one or more of the following conditions results, as reasonably determined by Tenant: (i) The remainder of the Premises would not be economically and feasibly usable by Tenant; and/or (ii) A reasonable amount of reconstruction would not make the Premises and Improvements a practical improvement and reasonably suited for the uses and purposes for which the Premises were being used prior to the Condemnation; and/or (iii) The conduct of Tenant’s business on the Premises would be materially and substantially prevented or impaired.

9.1.7. “Partial Taking” means any taking of the Premises or Improvements that is neither a Total Taking nor a Substantial Taking.

9.1.8. “Notice of Intended Condemnation” means any notice or notification on which a reasonably prudent person would rely and which he would interpret as expressing an existing intention of Condemnation as distinguished from a mere preliminary inquiry or proposal. It includes but is not limited to service of a Condemnation summons and complaint on a Party hereto. The notice is considered to have been received when a Party receives from the Condemnor a notice of intent to condemn, in writing, containing a description or map reasonably defining the extent of the Condemnation.

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9.2 Notice and Representation.

9.2.1. Notification. The Party receiving a notice of one or more of the kinds specified below shall promptly notify the other Party (and the Limited Partner, if during the Compliance Period) of the receipt, contents and dates of such notice: (i) a Notice of Intended Condemnation; (ii) service of any legal process relating to the Condemnation of the Premises or Improvements; (iii) any notice in connection with any proceedings or negotiations with respect to such a Condemnation; (iv) any notice of an intent or willingness to make or negotiate a private purchase, sale or transfer in lieu of Condemnation.

9.2.2. Separate Representation. County, Agency and Tenant each have the right to represent its respective interest in each Condemnation proceeding or negotiation and to make full proof of his claims. No agreement, settlement, sale or transfer to or with the Condemnor shall be made without the consent of County, Agency and Tenant. County, Agency and Tenant shall each execute and deliver to the other any instruments that may be required to effectuate or facilitate the provisions of this Lease relating to Condemnation.

9.3 Total or Substantial Taking.

9.3.1. Total Taking. On a Total Taking, this Lease shall terminate on the Date of Taking.

9.3.2. Substantial Taking. If a taking is a Substantial Taking, Tenant may, with the consent of each Leasehold Mortgagee and the Limited Partner, to the extent required, by notice to Lessor given within ninety (90) days after Tenant receives a Notice of Intended Condemnation, elect to treat the taking as a Total Taking. If Tenant does not so notify Lessor, the taking shall be deemed a Partial Taking.

9.3.3. Early Delivery of Possession. Tenant may continue to occupy the Premises and Improvements until the Condemnor takes physical possession. At any time following Notice of Intended Condemnation, Tenant may in its sole discretion, with the consent of each Leasehold Mortgagee and the Limited Partner, to the extent required, elect to relinquish possession of the Premises to Lessor before the actual Taking. The election shall be made by notice declaring the election and agreeing to pay all Rent required under this Lease to the Date of Taking. Tenant’s right to apportionment of or compensation from the Award shall then accrue as of the date that the Tenant relinquishes possession.

9.3.4. Apportionment of Award. On a Total Taking all sums, including damages and interest, awarded for the fee or leasehold or both shall be distributed and disbursed as finally determined by the court with jurisdiction over the Condemnation proceedings in accordance with applicable law. Notwithstanding anything herein to the contrary, Tenant shall be entitled to receive compensation for the value of its leasehold estate under this Lease including its fee interest in all Improvements, personal property and trade fixtures located on the Premises, its relocation and removal expenses, its loss of business goodwill and any other items to which Tenant may be entitled under applicable law.

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9.4 Partial Taking.

9.4.1. Effect on Rent. On a Partial Taking this Lease shall remain in full force and effect covering the remainder of the Premises and Improvements, and Tenant shall not be entitled to any refund of the Base Rent.

9.4.2. Restoration of Improvements. Promptly after a Partial Taking, Tenant shall repair, alter, modify or reconstruct the Improvements (“Restoring”) so as to make them reasonably suitable for Tenant’s continued occupancy for the uses and purposes for which the Premises are leased.

9.4.3. Apportionment of Award. On a Partial Taking, Tenant shall be entitled to receive the entire award for such Partial Taking, except that (i) the proceeds of such Partial Taking shall first be applied towards the cost of Restoring the Premises pursuant to Section 9.4.2 and (ii) Lessor shall be entitled to receive any portion of such award allocated to Lessor’s Fee InerestInterest in the Property (exclusive of the Improvements, as encumbered by this Lease).

9.5 Waiver of Termination Rights. Both Parties waive their rights under Section 1265.130 of the California Code of Civil Procedure (and any successor provision) and agree that the right to terminate this Lease in the event of Condemnation shall be governed by the provisions of this Article IX.

ARTICLE X

ASSIGNMENT, SUBLETTING AND ENCUMBERING

10.1 General. Except as provided in Sections 10.3 and 17.6.4, below, Tenant shall not mortgage, pledge, hypothecate, encumber, transfer, sublease Tenant’s interest in this Lease or assign (including an assignment by operation of law) Tenant’s interest in the Premises or Improvements or any part or portion thereof (hereinafter referred to collectively as “Transfer”) without the written consent of the Lessor, which consent may not be unreasonably withheld, conditioned or delayed.

Lessor’s consent may be subject to approval by their respective governing bodies (e.g. Board of Supervisors and City Council). Tenant’s failure to obtain the Lessor’s written consent to a Transfer shall render such Transfer void. Occupancy of the Premises by a prospective transferee, sublessee, or assignee prior to Lessor’s written consent of a Transfer shall constitute an Event of Default, except as set forth in Section 10.3, below.

10.1.1. Except as provided in Section 10.3, below, if Tenant hereunder is a corporation, limited liability company, an unincorporated association or partnership, the sale or transfer of any stock or interest in said corporation, company, association and partnership in the aggregate exceeding 25% shall require the written consent of the Lessor, as set forth in Section 10.3, above, which consent may not be unreasonably withheld, conditioned or delayed.

10.1.2. Should Lessor consent to any Transfer, such consent and approval shall not constitute a waiver of any of the terms, conditions, covenants, restrictions or reservations of this Lease nor be construed as Lessor’s consent to any further Transfer. Such terms conditions, covenants, restrictions and reservations shall apply to each and every Transfer hereunder and shall be severally binding upon each and every party thereto. Any document to regarding the Transfer of the Commented [ST21]: My changes match Stanton Inn
ground lease. Proceeds must flow to the Tenant for this to be financeable, but Lessor is entitles to the amount specific to the fee interest as encumbered by this lease. Most of the value is with the Tenant which is how we are able to get an appraisal to support a loan of this size.

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Premises or any part thereof shall not be inconsistent with the provisions of this Lease and in the event of any such inconsistency, the provisions of this Lease shall control.

10.1.3. This Section shall not be interpreted to prohibit, disallow or require Lessor’s consent to space leases (subleases of less than Tenant’s entire Lease interest), including leases of individual residential units in the Improvements, which are consistent with the approved uses under this Lease.

10.2 Leasehold Mortgage. Under no circumstances may Tenant mortgage, encumber or hypothecate Lessor’s Fee Interest, other than as required by TCAC pursuant to its lease rider, if any, and previously approved by Lessor prior to the Effective Date of this Lease, in connection with the award of low income housing tax credits to Tenant.

10.3 Excluded Transfers. Lessor’s consent, as set forth in Section 10.1, above, shall not be required to for any Excluded Transfer (each party to whom an Excluded Transfer may be made is a “Permitted Transferee”), provided, however, that (1) Tenant shall notify Lessor of such Excluded Transfer at least twenty (20) days prior to the consummation of such Excluded Transfer, and shall provide Lessor with information regarding the transferee evidencing that the Transfer falls within the scope of this Section 10.3 and the definition of Excluded Transfer, set forth in Section

1.1.211.1.18, above, and (2) if such Transfer involves an assignment of Tenant’s rights under this Lease, Tenant or such transferee shall provide Lessor with a written assumption of Tenant’s obligations and liabilities under this Lease executed by such transferee in a form approved by the Lessor, which approval shall not be unreasonably withheld, conditioned or delayed in the event that the assignment is consistent with the terms of this Lease; provided, however, that the provisions of this Section 10.3 shall not apply to any Transfer to a Foreclosure Transferee.

10.4 Transfer Procedure. The provisions of this Section 10.4 shall not be applicable to an Excluded Transfer, which shall be governed by Sections 1.1.211.1.18 and 10.3, above. If Tenant desires at any time to enter into a Transfer for which Lessor’s consent is required hereunder, Tenant shall provide Lessor with written notice (“Transfer Notice”) at least ninety (90) days prior to the proposed effective date of the Transfer. The Transfer Notice shall include (i) the name and address of the proposed transferee, (ii) the nature of the Transfer (e.g., whether an assignment, sublease, etc.), (iii) the proposed effective date of the Transfer, (iv) income statements and “fair market” balance sheets of the proposed transferee for the two (2) most recently completed fiscal or calendar years (provided however, if the proposed transferee is a newly formed entity and has not been in existence for such two (2) year period, the financial statements submitted shall be those of its principals), (v) a detailed description of the proposed transferees qualifications and experience that demonstrates the transferee meets the criteria for a Tenant as established by this Lease, and (vi) a bank or other credit reference. Thereafter, Tenant shall furnish such supplemental information as Lessor may reasonably request concerning the proposed transferee. Lessor shall, no later than ninety (90) days after Lessor’s receipt of the information specified above, deliver written notice to Tenant which shall (i) indicate whether Lessor give or withhold consent to the proposed Transfer, and (ii) if Lessor withhold consent to the proposed Transfer, setting forth a detailed explanation of Lessor’s grounds for doing so. If Lessor consents to a proposed Transfer, then Tenant may thereafter effectuate such Transfer to the proposed transferee based upon the specific terms of the Lessor’s approval and after execution of a consent to assignment by Lessor in a form approved by the Lessor, which approval shall not be unreasonably withheld, conditioned or delayed in the event that the assignment is consistent with the terms of this Lease; provided, however, that the provisions of this Section 10.4 shall not apply to any Transfer to a Foreclosure Transferee.

Commented [ST22]: Have both lessors approved the form
of the TCAC lease rider?
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10.5 Liability of Transferors/Transferees For Lease Obligations. In the case of an assignment, including an assignment pursuant to Section 17.6.5, each Permitted Transferee and any other assignees or transferees of this Lease shall assume in writing all of Tenant’s obligations thereafter arising under this Lease. However, under no circumstances shall any such assignment result in a Leasehold Mortgagee assuming responsibility or liability for any Excluded Defaults (as defined below) or as otherwise expressly provided in this Lease. All assignees or transferees of any interest in this Lease or the Premises or Improvements (whether or not directly liable on this Lease) shall be subject to the terms, conditions, covenants, restrictions and reservations of this Lease. Except as otherwise provided in Section 17.6.5, the transferor may be released from all liability under this Lease only if the Permitted Transferee or other transferee agrees in writing to assume all of transferor’s obligations and liabilities and provides to Lessor evidence of sufficient and adequate assets, including any required insurance policies, subject to approval by Lessor, which approval shall not be unreasonably withheld, that evidence said Permitted Transferee’s or other transferees’ financial and otherwise competence to assume transferor’s obligations and liability (an “Approved Release”). Except as otherwise provided in Section 17.6.5 and except for an Approved Release, for all other Transfers, any transferor of any interest in this Lease or the Premises or Improvements shall remain primarily liable for all obligations hereunder and shall be subject to the terms, conditions, covenants, restrictions and reservations of this Lease. Except as otherwise provided in Section 17.6.5 and except for an Approved Release, the Lessor may proceed directly against the transferor in its sole and absolute discretion, with no obligation to exhaust its remedies against the transferee. Notwithstanding anything to the contrary contained herein, Lessor consent shall not be required for any of the following: (i) the exercise by the Limited Partner of its rights pursuant to Tenant’s Partnership Agreement to remove the general partner of the Tenant and appoint the Limited Partner or an affiliate thereof as interim general partner of the Tenant; (ii) the exercise by the Limited Partner of its right to enforce any repurchase requirements under Tenant’s Partnership Agreement; and/or (iii) a transfer by the Limited Partner of its partnership interest in Tenant to an Affiliate of the Limited Partner.

10.6 Conditions of Certain Lessor Consent.

10.6.1. Lessor may withhold consent to a Transfer (excluding Excluded Transfers which shall not require Lessor consent) at its and absolute sole discretion if any of the following conditions exist:
(a) An Event of Default exists under this Lease.
(b) The prospective transferee has not agreed in writing to keep, perform, and be bound by all the terms conditions, covenants, restrictions and reservations of this Lease. (c) In the case of an assignment, the prospective transferee has not agreed in writing to assume all of transferor’s obligations and liabilities. (d) The construction of the Initial Improvements has not been completed. (e) Any construction required of Tenant as a condition of this Lease has not been completed.
(f) All the material terms, covenants, and conditions of the Transfer that are relevant to the Lessor’s approval of the Transfer have not been disclosed in writing to the Lessor.

Commented [ST23]: Negotiated into Stanton Inn.

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10.7 Transfer of Mortgages of Lessor’s Interest. Notwithstanding anything to the contrary set forth in this Ground Lease, unless required by statute, court order or operation of law, Lessor shall not transfer, assign, pledge or hypothecate its fee interest in the Premises (other than to entities under common control with Lessor or other governmental entities under applicable law) without the prior written consent of Tenant, all Leasehold Mortgagees and the Limited Partner (provided, the Limited Partner’s consent shall be required only during the tax credit compliance period). Any and all mortgages or liens placed or suffered by the Lessor encumbering the Lessor’s fee interest in the Premises shall be expressly subject and subordinate to this Lease (and all amendments, modifications, extensions and renewals hereof), to all obligations of Lessor hereunder, to all of the rights, titles, interests, and estates of the Tenant created or arising hereunder, to each New Lease and to each Leasehold Mortgage. Furthermore, any Person succeeding to the Lessor’s fee interest as a consequence of any conveyance, foreclosure or other transfer shall succeed to all of the obligations of the County hereunder. During the term of any mortgage held by a Leasehold Mortgagee applicable hereinhereunder, Lessor shall, at the request of any such Leasehold Mortgagee, require the holder of each such mortgage, deed of trust and other security instrument encumbering the fee interest (a “Fee Mortgage”) to execute and deliver to the requesting Leasehold Mortgagee a written and recordable subordination agreement providing any such Fee Mortgage is subject and subordinate in all respects to this Lease (and all amendments, modifications, extensions and renewals hereof), to all obligations of Lessor under the Lease, to all of the rights, titles, interests, and estates of the Tenant created or arising hereunder, to each New Lease and to each Leasehold Mortgage, and otherwise in form and substance as required by such Leasehold Mortgagee in its sole and absolute, but good faith, discretion.

ARTICLE XI

DEFAULT AND REMEDIES

11.1 Event of Default. Each of the following events shall constitute an “Event of Default” by Tenant:

11.1.1. Failure to Pay. Tenant’s failure or omission to pay any Rent or other sum payable hereunder on or before the date due where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Tenant; provided, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure §1161 et seq.

11.1.2. Failure to Perform. The failure or inability by Tenant to observe or perform any of its obligations under this Lease (other than those specified in Sections 11.1.1, 11.1.3, 11.1.6, or 11.1.8 herein, which have their own notice and cure periods), where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Tenant or past any such longer period as reasonably agreed upon by the Tenant, Lessor in writing as may be necessary for completion of its cure; provided, however, that any such notice by Lessor shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 et. seq.; provided, further, that if the nature of such failure is such that it can be cured by Tenant but that more than thirty (30) days are reasonably required for its cure (for any reason other than financial inability), then Tenant shall not be deemed to be in default if Tenant shall commence such cure within said thirty (30) days, and thereafter diligently pursues such cure to completion.

Commented [ST24]: All changes to conform with those
made by County in Stanton Inn.

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11.1.3. Abandonment. The abandonment (as defined in California Civil Code Section 1951.3) or vacation of the Premises by Tenant for a period of thirty (30) days or more.

11.1.4. Assignments.
(a) The making by Tenant of any assignment of its leasehold estate under this Lease without Lessor’s consent, as set forth in Article X; (b) A case is commenced by or against Tenant under Chapters 7, 11 or 13 of the Bankruptcy Code, Title 11 of the United States Code as now in force or hereafter amended and if so commenced against Tenant, the same is not dismissed within ninety (90) days of such commencement;
(c) the appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such seizure is not discharged within sixty (60) days; or
(d) Tenant’s convening of a meeting of its creditors or any class thereof for the purpose of effecting a moratorium upon or composition of its debts. In the event of any such default, neither this Lease nor any interests of Tenant in and to the Premises shall become an asset in any of such proceedings.

11.1.5. Failure to Reimburse Lessor. Tenant’s failure to reimburse the Lessor pursuant to Section 3.6.4.

11.1.6. Termination of and Failure to Reinstate Insurance Coverage.

Termination of Tenant’s insurance coverage and lack of reinstatement within ten (10) business days after notice from Lessor of such termination.

11.1.7. Failure to Provide Evidence of Insurance. Tenant’s failure to provide Lessor with a valid and adequate certificate of insurance and endorsements, or binder, at any time during the Term of the Lease, within the time period required under Section 8.1.3.

11.1.8. Lessor’s Consent and Approval of Transfer. Occupancy of the Premises by a prospective transferee, sublessee, or assignee which requires Lessor’s consent or approval, before Lessor’s written consent and approval of a Transfer is obtained as required in Section 10.1.

11.1.9. Tenant’s failure to make Additional Rent payment(s) as set forth in Sections

11.3 and 11.10.

11.2 Lessor’s Remedies. If an Event of Default occurs, Lessor shall have the following remedies in addition to all rights and remedies provided by law or equity to which Lessor may resort cumulatively or in the alternative:

11.2.1. Termination of Lease. Subject to Article 17, as applicable, Lessor shall have the right to terminate this Lease and all rights of Tenant hereunder including Tenant’s right to possession of the Premises. In the event that Lessor shall elect to so terminate this Lease then Lessor may recover from Tenant:

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(a) The worth at the time of award of the unpaid Rent and other charges, which had been earned as of the date of the termination hereof; plus (b) The worth at the time of award of the amount by which the unpaid Rent and other charges which would have been earned after the date of the termination hereof until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus
(c) The worth at the time of award of the amount by which the unpaid Rent and other charges for the balance of the Term hereof after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus (d) Any other amount necessary to compensate Lessor for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, the cost of recovering possession of the Premises, expenses of reletting, including necessary repair, renovation and alteration of the Premises, reasonable attorneys' fees, expert witness costs; plus (e) Subject to the rights of any Leasehold Mortgagees and TCAC, the funds in the Capital Improvement Fund; plus
(f) Any other amount which Lessor may by law hereafter be permitted to recover from Tenant to compensate Lessor for the detriment caused by Tenant’s default as permitted under applicable California law.

The term "Rent" as used herein shall mean as defined in Section 1.1.411.1.47. Additional Rent shall be computed on the basis of the average monthly amount thereof accruing during the 24- month period immediately prior to default, except that if it becomes necessary to compute such Additional Rent before such 24-month period has occurred, then it shall be computed on the basis of the average monthly amount during such shorter period. As used in Sections 11.2.1(a) and 11.2.1(b) above, the "worth at the time of award" shall be computed by allowing interest at the Interest Rate.

As used in Sections 11.2.1 (c) above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%), but not in excess of the Interest Rate.

11.2.2. Continue Lease in Effect. Lessor may continue this Lease in effect without terminating Tenant’s right to possession and to enforce all of Lessor's rights and remedies under this Lease, at law or in equity, including the right to recover the Rent as it becomes due under this Lease; provided, however, that Lessor may at any time thereafter elect to terminate this Lease for the underlying Event(s) of Default by notifying Tenant in writing that Tenant’s right to possession of the Premises has been terminated.

11.2.3. Removal of Personal Property Following Termination of Lease. Lessor shall have the right, following a termination of this Lease and Tenant’s rights of possession of the Premises under Section 11.2.1 above, to re-enter the Premises and, subject to applicable law, to remove Tenant’s personal property from the Premises. Such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant, or disposed of without such storage, in accordance with applicable California law.

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11.3 Lessor’s Right to Cure Tenant Defaults. If Tenant shall have failed to cure, after expiration of the applicable time for curing, a particular default under this Lease, Lessor may at their election, but are not obligated to, make any payment required of Tenant under this Lease or perform or comply with any term, agreement or condition imposed on Tenant hereunder, and the amount so paid plus the reasonable cost of any such performance or compliance, plus interest on such sum at the Interest Rate from the date of payment, performance or compliance until reimbursed shall be deemed to be Additional Rent payable by Tenant on Lessor’s demand. Tenant’s failure to reimburse the County and/or Agency within 30 days of Lessor’s demand shall constitute an Event of Default under this Lease. No such payment, performance or compliance shall constitute a waiver of default or of any remedy for default, or render County and/or Agency liable for any loss or damage resulting from the same.

11.4 Lessor’s Default. Lessor shall not be considered to be in default under this Lease unless Tenant has given Lessor written notice specifying the default, and either (i) as to monetary defaults, Lessor have failed to cure the same within ten (10) business days after written notice from Tenant, or (ii) as to nonmonetary defaults, Lessor have failed to cure the same within thirty (30) days after written notice from Tenant, or if the nature of Lessor’s nonmonetary default is such that more than thirty (30) days are reasonably required for its cure, then such thirty (30) day period shall be extended automatically so long as County and/or Agency commences a cure within such thirty (30) day period and thereafter diligently pursues such cure to completion. Tenant shall have no right to offset or abate alleged amounts owing by County and/or Agency under this Lease against any amounts owing by Tenant under this Lease. Additionally, Tenant’s sole remedy for any monetary default shall be towards the Lessor’s interest in the property and not to any other assets. Any and all claims or actions accruing hereunder shall be absolutely barred unless such action is commenced within six (6) months of the event or action giving rise to the default.

11.5 Remedies Cumulative. All rights and remedies of Lessor contained in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Lessor shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law, whether or not stated in this Lease.

11.6 Waiver by Lessor. No delay or omission of Lessor to exercise any right or remedy shall be construed as a waiver of such right or remedy or any default by Tenant hereunder. The acceptance by Lessor of Rent or any other sums hereunder shall not be (a) a waiver of any preceding breach or default by Tenant of any provision thereof, other than the failure of Tenant to pay the particular rent or sum accepted, regardless of Lessor’s knowledge of such preceding breach or default at the time of acceptance of such rent or sum, or (b) waiver of Lessor’s right to exercise any remedy available to Lessor by virtue of such breach or default. No act or thing done by County or Agency’s agents during the term of this Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender shall be valid unless in writing and signed by Lessor.

11.7 Interest. Any installment or Rent due under this Lease or any other sums not paid to Lessor when due (other than interest) shall bear interest at the Interest Rate from the date such payment is due until paid, provided, however, that the payment of such interest shall not excuse or cure the default.

11.8 Conditions Deemed Reasonable. Tenant acknowledges that each of the conditions to a Transfer, and the rights of Lessor set forth in this Article X in the event of a Transfer is a reasonable restriction for the purposes of California Civil Code Section 1951.4.

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11.9 Waiver by Tenant. Tenant’s waiver of any breach by Lessor of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained.

11.10 Tenant Covenants and Agreements. All covenants and agreements to be performed by Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant’s sole cost and expenses and without any abatement of Rent. If Tenant shall fail to pay any sum of money, other than Rent required to be paid by it hereunder, or shall fail to perform any other act on its part to be performed hereunder, or to provide any insurance or evidence of insurance to be provided by Tenant within the time period required under this Lease, then in addition to any other remedies provided herein, Lessor may, but shall not be obligated to do so, and without waiving or releasing Tenant from any obligations of Tenant, make any such payment or perform any such act on Tenant’s part to be made or performed as provided in this Lease or to provide such insurance. Any payment or performance of any act or the provision of any such insurance by Lessor on Tenant’s behalf shall not give rise to any responsibility of Lessor to continue making the same or similar payments or performing the same or similar acts. All costs, expenses, and other sums incurred or paid by Lessor in connection therewith, together with interest at the Interest Rate from the date incurred or paid by Lessor, shall be deemed to be Additional Rent hereunder and shall be paid by Tenant within thirty (30) days of receipt of a demand and invoice from Lessor, and Tenant’s failure to pay the Lessor, as stated herein, shall constitute an Event of Default under this Lease.

ARTICLE XII

HOLDING OVER
If Tenant holds over after the expiration or earlier termination of the Term hereof without the express written consent of Lessor, Tenant shall become a Tenant at sufferance only, at a monthly rental rate of (a) Fifty Thousand Dollars ($50,000) to the extent the Premises are not subject to any tenant income or rent restrictions and all units may be rented at market-rate rents, or (b) Twenty Five Thousand Dollars ($25,000) to the extent the Premises are subject to any tenant income or rent restrictions (“Hold Over Rent”), increased annually commencing with commencement of the hold over period by an amount equal to the greater of (i) three percent (3%) for each year of the Term, or (ii) a percentage equal to the percentage increase from the Base Period of the Consumer Price Index (“CPI”) for Los Angeles- Riverside-Orange County [All Urban Consumers-All Items, not seasonally adjusted (Base Period 1982-84=100)]. Said CPI for the month of December for the second year of the Term shall be considered the “Base Period.” Said adjustment shall be made by comparing the CPI for the Base Period to the CPI for the month of December immediately preceding each such adjustment.

If at any time there shall not exist the CPI, Lessor shall substitute any official index published by the Bureau of Labor Statistics, or successor or similar governmental agency, as may then be in existence, and shall be most nearly equivalent thereto. If Tenant fails to surrender the Premises and the Improvements as stated herein, and Lessor shall take legal action to cause Tenant’s eviction from the Premises and is successful in such action, Tenant shall be responsible for all costs and expenses, including reasonable attorney’s fees and costs, incurred by County and/or Agency in connection with such eviction action; Tenant shall also indemnify and hold Lessor harmless from all loss or liability or reasonable attorney’s fees and costs, including any claim made by any succeeding tenant, incurred by County and/or Agency founded on or resulting from such failure to surrender.

ARTICLE XIII

ESTOPPEL CERTIFICATES
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At any time and from time to time, within ten (10) business days after written request by either County, Agency or Tenant (the “requesting party”), the other Party (the “responding party”) shall execute, acknowledge and deliver an estoppel certificate addressed to the requesting party, and/or to such other beneficiary (as described below) as the requesting party shall request, certifying (i) that this Lease is in full force and effect, (ii) that this Lease is unmodified, or, if there have been modifications, identifying the same, (iii) the dates to which Rent has been paid in advance, (iv) that, to the actual knowledge of the responding party, there are no then existing and uncured defaults under the Lease by either County, Agency or Tenant, or, if any such defaults are known, identifying the same, and (v) any other factual matters (which shall be limited to the actual knowledge of the responding party) as may be reasonably requested by the requesting party. Such certificate may designate as the beneficiary thereof the requesting party, and/or any third party having a reasonable need for such a certificate (such as, but not limited to, a prospective purchaser, transferee or lender) and any such certificate may be relied upon by the Parties.

ARTICLE XIV

FORCE MAJEURE
Unless otherwise specifically provided herein, the period for performance of any nonmonetary obligation by either Party shall be extended by the period of any delay in performance caused by Acts of God, strikes, boycotts, lock-outs, inability to procure materials not related to the price thereof, failure of electric power, riots, civil unrest, acts of terrorism, insurrection, war, declaration of a state or national emergency, weather that could not have reasonably been anticipated, changes in the Laws which would prevent the Premise from being operated in accordance with this Lease, or other reasons beyond the reasonable control of County, Agency, Tenant, or their respective agents or representatives (collectively, “Force Majeure Events”). In no event, however, shall Force Majeure Events include the financial inability of a Party to this Lease to pay or perform its obligations hereunder. Further, nothing herein shall extend the time for performance of any monetary obligation owing under this Lease (including Tenant’s obligation to pay Rent owing hereunder).

ARTICLE XV

RECORDS AND ACCOUNTS

15.1 Financial Statements. Within one hundred eighty (180) days after the end of each accounting year, Tenant shall at hisits own expense submit to Auditor-Controller and the Agency a balance sheet and, income statement and cash flow statement prepared by a Certified Public Accountant (“CPA”) who is a member of the American Institute of Certified Public Accountants (“AICPA”) and the California Society of CPAs, reflecting business transacted on or from the Premises during the preceding accounting year. The Certified Public Accountant must attest that the balance sheet and income statement submitted are an accurate representation of Tenant's records and financial position as reported to the United States of America for income tax purposes. At the same time, Tenant shall submit to Auditor-Controller and Agency a statement certified as to accuracy by a Public Accountant who is a member of AICPA and the California Society of CPAs, wherein the total Gross Receipts for the accounting year are classified according to the categories of business established for percentage rent and listed in Section 3.4.1(d) and for any other business conducted on or from the Premises and are in accordance with GAAP. Tenant shall provide Lessor with copies of EXHIBIT 11
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any CPA's management letters prepared in conjunction with their audits of Tenant's operations from the Premises. Copies of management letters shall be provided directly to Lessor by the CPA at the same time Tenant’s copy is provided to Tenant. In the event that when such financial statements are submitted, the Tenant has a budget for the following accounting year, Tenant, at the same time, shall also provide Lessor with such budget.

15.1.1. Tenant acknowledges its understanding that any and all of the Financial Statement submitted to the Lessor pursuant to this Lease become Public Records and may be subject to public inspection and copying pursuant to §§ 6250 et. seq. of the California Government Code.

15.1.2. All Tenant's books of account and records and supporting source documents related to this Lease or to business operations conducted within or from the Premises shall be kept and made available at one location within the limits of the County unless an alternative location is approved in writing by the Lessor. Lessor shall, through their duly authorized agents or representatives, have the right to examine and audit said books of account and records and supporting source documents at any and all reasonable times for the purpose of determining the accuracy thereof in connection with such Sections of this Lease as the Parties mutually and reasonably agree the audit is relevant thereto.

15.2 Reports. In the event that the Tenant commissions, requests or is required to produce any reports related to the physical condition of the Improvements or Premises, Tenant shall submit copies of such reports to Lessor along with the financial statements required above in Section 15.1.

ARTICLE XVI

OPERATIONAL OBLIGATIONS OF TENANT

16.1 Standards of Operation.

16.1.1. Tenant shall operate the Premises in a manner reasonably comparable to other comparable facilities or businesses within the County of Orange. Tenant shall at all times during the Term provide adequate security measures to reasonably protect persons and property on the Premises.

16.1.2. The ultimate purpose of this Lease is to permit the construction and operation of a multifamily affordable residential rental development, including permanent supportive housing, in accordance with Section 4.1.1. Accordingly, Tenant covenants and agrees to operate said Premises fully and continuously to accomplish said purposes and not to abandon or vacate the Premises at any time.

16.1.3. The facilities on the Premises shall be operated during normal business hours, subject to any temporary interruptions in operations or closures due to ordinary maintenance and repair and any Force Majeure Event, defined in Article XIV above.

16.2 Protection of Environment. Tenant shall take all reasonable measures available to:

16.2.1. Avoid any pollution of the atmosphere or littering of land or water caused by or originating in, on, or about Tenant’s facilities.

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16.2.2. Maintain a reasonable noise level on the Premises so that persons in the general neighborhood will be able to comfortably enjoy the other facilities and amenities in the area.

16.2.3. Prevent the light fixtures of the Premises from emitting light that could negatively affect the operation of cars, boats, or airplanes in the area.

16.2.4. Prevent all pollutants from Tenant’s operations on the Premises from being discharged, including petroleum products of any nature, except as may be permitted in accordance with any applicable permits or as permitted by applicable Law. Tenant and all of Tenant’s agents, employees and contractors shall conduct operations under this Lease so as to ensure that pollutants do not enter the municipal storm drain system (including but not limited to curbs and gutters that are part of the street systems), or directly impact receiving waters (including but not limited to rivers, creeks, streams, estuaries, lakes, harbors, bays and the ocean), except as may be permitted by any applicable permits or as permitted by applicable law.

16.2.5. The Lessor may enter the Premises in accordance with Section 4.5 and/or review Tenant records at all reasonable times to assure that activities conducted on the Premises comply with the requirements of this Section.

16.3 On-Site Manager. Tenant shall employ a competent manager who shall be responsible for the day-to-day operation and level of maintenance, cleanliness, and general order for the Premises. Such person shall be vested with the authority of Tenant with respect to the supervision over the operation and maintenance of the Premises, including the authority to enforce compliance by Tenant’s agents, employees, concessionaires, or licensees with the terms and conditions of this Lease and any and all rules and regulations adopted hereunder. Tenant shall notify Lessor in writing of the name of the Manager currently so employed as provided in Section 19.20 of this Lease.

16.4 Policies and Procedures to be Established by Tenant. Prior to the completion of construction, Tenant shall submit to Lessor proposed policies and procedures pertinent to the operation of the multifamily affordable residential rental development and manner of providing the uses required by this Lease (“Policies and Procedures”).

ARTICLE XVII

LEASEHOLD MORTGAGES

17.1 Definitions. The following definitions are used in this Article (and in other Sections of this Lease):

17.1.1. “Leasehold Estate” shall mean Tenant’s leasehold estate in and to the Premises, including Tenant’s rights, title and interest in and to the Premises and the Improvements, or any applicable portion thereof or interest therein.

17.1.2. “Leasehold Foreclosure Transferee” shall mean any person (which may, but need not be, a Leasehold Mortgagee) which acquires the Leasehold Estate pursuant to a foreclosure, assignment in lieu of foreclosure or other enforcement of remedies under or in connection with a Leasehold Mortgage.

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17.1.3. “Leasehold Mortgage” shall mean and includes a mortgage, deed of trust, security deed, conditional deed, deed to secure debt or any other security instrument (including any assignment of leases and rents, security agreement and financing statements) held by a Lender by which Tenant’s Leasehold Estate is mortgaged to secure a debt or other obligation, including a purchase money obligation.

17.1.4. “Leasehold Mortgagee” shall mean a Lender which is the holder of a Leasehold Mortgage.

17.1.5. “Tenant” shall mean all of the following: (i) the Tenant under this Lease; (ii) an approved assignee, transferee or subtenant of the Tenant under this Lease who is or becomes directly and primarily liable to Lessor; and (iii) any further assignee, transferee or subtenant of any of the parties listed in (ii) who is or becomes directly and primarily liable to Lessor.

17.2 Tenant’s Right to Encumber Leasehold Estate; No Right to Encumber Lessor’s Fee Interest. Provided that an Event of Default has not occurred and is continuing, Tenant may, at any time during the Term of this Lease (with consent of Lessor after providing prior written notice to Lessor, no later than 30 days prior to the encumbrance, along with providing evidence that all requirements of this Lease have been complied with), which consent shall not be unreasonably withheld, conditioned or delayed), encumber all or any portion of Tenant’s Leasehold Estate with one (1) or more Leasehold Mortgages (and to amend, modify, and supplement any such encumbrance, including encumbrances refinancing the same); provided, however:

17.2.1. Such Leasehold Mortgage(s) (as of the date recorded) shall not exceed (a) if recorded before completion of the Initial Improvements, One Hundred Percent (100%) of the costs of the Initial Improvements (including closing and financing costs), or (b) if recorded after completion of the Initial Improvements, eighty percent (80%) of the Leasehold Estate value (including the value of all improvements) after completion;

17.2.2. That Tenant shall not have the power to encumber, and no Leasehold Mortgage shall encumber, Lessor’s Fee Interest;

17.2.3. Except as expressly provided in this Lease, the Leasehold Mortgage and all rights acquired under it shall be subject to each and all of the covenants, conditions, and restrictions set forth in this Lease and to all rights and interests of Lessor hereunder; and

17.2.4. Nothing in this Lease shall be construed so as to require or result in a subordination in whole or in part in any way of the Lessor’s Fee Interest to any Leasehold Mortgage, and;

17.2.5. Except as otherwise expressly provided herein, in the event of any conflict between the provisions of this Lease and the provisions of any such Leasehold Mortgage, the provisions of this Lease shall control.

Tenant’s encumbrance of its Leasehold Estate with a Leasehold Mortgage, as provided in this Section 17.2, shall not constitute an assignment or other Transfer under Article X or otherwise, nor shall any Leasehold Mortgagee, as such, be deemed to be an assignee or transferee of this Lease or of the Leasehold Estate so as to require such Leasehold Mortgagee, as such, to assume the Tenant’s obligations and liabilities under this Lease.

Commented [ST25]: Tenant must have the free ability to
encumber the project so long as the conditions are met and they provide notice. This is consistent with the language agreed to with the County in Stanton Inn.

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Notwithstanding the foregoing, if any Leasehold Mortgagee (or its nominee) acquires title to the Premises by foreclosure or deed in lieu thereof (or by a new lease under Section 17.7), any required consent of the Lessor under this Section 17.2 shall not be unreasonably withheld.

In addition and notwithstanding anything to the contrary set forth herein, (i) following a foreclosure or deed in lieu thereof by a Leasehold Mortgagee holding the most-senior Leasehold Mortgage in terms of lien priority (the “Senior Leasehold Mortgagee”), the requirement for Lessor consent to encumbering the Leasehold Estate with Leasehold Mortgages set forth above shall not apply (A) to Senior Leasehold Mortgagee (or its designee) following such foreclosure or deed in lieu of foreclosure, nor (B) in connection with the first transfer from Senior Leasehold Mortgagee (or its designee) to new owner acquiring the Premises from such Senior Leasehold Mortgagee (or its designee) following any such foreclosure or deed in lieu of foreclosure, and (ii) no consent of Lessor shall be required as to any amendment, modification or supplement to any Leasehold Mortgage except to the extent such amendment, modification or supplement (a) increases the principal amount of the loan secured by such Leasehold Mortgage (except in connection with protective advances), or (b) increases the stated interest rate on the loan secured by such Leasehold Mortgage (other than to charge a default rate, as applicable, to replace the interest rate upon the unavailability or illegality of the applicable interest rate index, or, to the extent it is a variable rate, in connection with the variations of such rate as provided in the applicable loan documents).

17.3 Notification to Lessor of Leasehold Mortgage. Tenant or any Leasehold Mortgagee shall, prior to making any Leasehold Mortgage, provide Lessor with written notice of such Leasehold Mortgage and the name and address of the Leasehold Mortgagee. At the time of notice, Tenant or such Leasehold Mortgagee shall furnish to Lessor a complete copy of any trust deed and note to be secured thereby, together with the name and address of the holder thereof. Thereafter, Tenant or any Leasehold Mortgagee shall notify Lessor of any change in the identity or address of such Leasehold Mortgagee. Lessor shall be entitled to rely upon the addresses provided pursuant to this Section for purposes of giving any notices required by this Article XVII.

17.4 Notice and Cure Rights of Leasehold Mortgagees With Respect to Tenant Defaults.

Lessor, upon delivery to Tenant of any notice of a default or demand for payment by Tenant under this Lease or a matter as to which Lessor may predicate or claim a default, will promptly deliver a copy of such notice to each Leasehold Mortgagee. Each notice or demand required to be given by Lessor to a Leasehold Mortgagee under this Lease shall be in writing and shall be given by certified or registered mail, postage prepaid, return receipt requested, to such Leasehold Mortgagee at the address(es) provided by such Leasehold Mortgagee, as applicable, to Lessor from time to time in writing and shall be effective upon receipt (or refusal to accept receipt). No notice or demand given by Lessor to Tenant shall be effective until the duplicate copy of such notice or demand to the Tenant shall have been effectively given to each Leasehold Mortgagee in accordance with this Lease. From and after the date such notice has been given to any Leasehold Mortgagee, such Leasehold Mortgagee shall have the same cure period for such default (or act or omission which is the subject matter of such notice) that is provided to Tenant under this Lease or as otherwise agreed upon by County, Agency and the Tenant, to commence and/or complete a cure of such default (or act or omission which is the subject matter of such notice). Lessor shall accept any and all performance by or on behalf of any Leasehold Mortgagee(s), including by any receiver obtained by any Leasehold Mortgagee(s), as if the same had been done by Tenant. Tenant authorizes each Leasehold Mortgagee to take any such action at such Leasehold Mortgagee’s option, and hereby authorizes any Leasehold Mortgagee (or any receiver or agent) to enter upon the Premises for such purpose.

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17.5 Limitation on Lessor’s Termination Right. If following the delivery of notice pursuant to Section 17.4, above, the default by Tenant continues and is not cured by Tenant (or any Leasehold Mortgagee as allowed under Section 17.4, above), and such failure entitles County and/or Agency to terminate this Lease, Lessor shall have no right to terminate this Lease unless Lessor shall notify in writing each and every Leasehold Mortgagee who has complied with Section 17.3 of Lessor’s intent to so terminate at least ninety (90) days in advance of the proposed effective date of such termination. If any Leasehold Mortgagee, within such ninety (90) day period, (i) notifies Lessor of such Leasehold Mortgagee’s desire to cure such default and initiates such cure and (ii) pays or cause to be paid the amount that is necessary to cure any monetary default as stated in such notice, if any, then Section 17.6 shall apply. The Lessor, at its sole discretion, may permit such additional time as necessary for any Leasehold Mortgagee to commence the cure or make payment(s), as stated herein. If any Leasehold Mortgagee and Limited Partner fails to respond to said notice of termination within the allotted ninety (90) days as consistent with the conditions of this Section 17.5, Lessor are entitled to immediately terminate this Lease.

17.6 Leasehold Mortgagee Foreclosure Period. If any Leasehold Mortgagee complies with Section 17.5 above, then the following provisions shall apply:

17.6.1. If Lessor’s notice under Section 17.5 specifies only monetary Events of Default as the basis for Lessor’s election to terminate this Lease, and Leasehold Mortgagee has fully paid the monetary amount designated by Lessor in its notice, then such payment shall be deemed to have cured the Event of Default. If Lessor’s notice under Section 17.5 specifies both monetary and non-monetary Events of Default or non-monetary Events of Default as the basis for Lessor’s election to terminate this Lease, and Leasehold Mortgagee has fully paid the monetary amount designated by Lessor in its notice, as applicable, then the date of termination specified in Lessor’s notice shall be extended for a period of twelve (12) months, provided that such Leasehold Mortgagee shall, during such twelve (12) month period:
(a) pay or cause to be paid all Rent under this Lease as the same becomes due (subject to the notice and cure rights expressly set forth herein); and (b) continue (subject to any stay as described in Section 17.6.2 below) its good faith efforts to perform (and complete performance of) all of Tenant’s nonmonetary obligations under this Lease that are capable of being performed by the Leasehold Mortgagee without having possession of the Premises, excepting nonmonetary obligations (whether or not a default exists with respect thereto) that are not then reasonably susceptible of being cured by Leasehold Mortgagee; and (c) commence and pursue with reasonable diligence until completion (subject to any stay as described in Section 17.6.2 below) a judicial or nonjudicial foreclosure or other enforcement of remedies under its Leasehold Mortgage.

17.6.2. The twelve (12)-month period described in Section 17.6.1, above, shall automatically be extended as long as the Leasehold Mortgagee is diligently and in good faith prosecuting the judicial or nonjudicial foreclosure to completion, in the Lessor’s reasonable discretion based upon evidence provided to Lessor of such good faith prosecution by the Leasehold Mortgagee. In the event of a judicial or non-judicial foreclosure, the twelve (12) month period described in Section 17.6.1, above, shall automatically be extended by the length of any delay caused by any stay (including any automatic stay arising from any bankruptcy or insolvency proceeding involving Tenant), injunction or other order arising under applicable Laws or issued by any court EXHIBIT 11
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(which term as used herein includes any other governmental or quasi-governmental authority having such power) (the foregoing being collectively referred to as a “Stay”). Further, Leasehold Mortgagee’s obligations stated in Section 17.6.1(b) and (c) shall be automatically suspended during any period that any Stay prevents Leasehold Mortgagee from taking any such actions. Nothing herein, however, shall be construed to extend this Lease beyond the Term hereof nor to require a Leasehold Mortgagee to continue such foreclosure proceedings after the Event of Default has been cured. If the Event of Default has been cured and the Leasehold Mortgagee shall discontinue such foreclosure proceedings, this Lease shall continue in full force and effect as if Tenant had not defaulted under this Lease.

17.6.3. In the event the Leasehold Mortgage requires a new lease between the Lessor and the Leasehold Mortgagee, Lessor shall enter into such new lease with the Leasehold Mortgagee pursuant to Section 17.7, below, provided Lessor are provided with the necessary and adequate documents related to the new lease requirements in the Leasehold Mortgage as described in Section

17.7. 17.6.4. So long as any Leasehold Mortgagee is complying with Sections 17.6.1 and

17.6.2 above, then upon the acquisition of Tenant’s Leasehold Estate by a Leasehold Foreclosure Transferee, this Lease shall continue in full force and effect as if Tenant had not defaulted under this Lease; provided that no Leasehold Foreclosure Transferee shall have any liability for the performance of any of the Tenant’s obligations under this Lease until the Leasehold Foreclosure Transferee has acquired the Tenant’s interest under the Lease, and then the Leasehold Foreclosure Transferee shall be liable for the performance of only those obligations of the Tenant arising from and after the effective date of the Leasehold Foreclosure Transferee’s acquisition of the Tenant’s Leasehold Estate. Any such Leasehold Foreclosure Transferee shall be deemed to be an assignee or transferee and shall be deemed to have agreed to perform all of the terms, covenants and conditions on the part of the Tenant to be performed hereunder from and after the effective date on which such Leasehold Foreclosure Transferee acquires title to the Leasehold Estate, but only for so long as such purchaser or assignee is the owner of the leasehold estate.

17.6.5. Any Leasehold Mortgagee (or its designee) that becomes a Leasehold Foreclosure Transferee, upon acquiring title to Tenant’s Leasehold Estate without obtaining Lessor’s consent and provided it is not in default of any of the provisions of this Lease, shall have a one-time right to assign the Leasehold Estate to an assignee (a) which is an Affiliate of the Leasehold Foreclosure Transferee, or (b) which has substantial experience, or will employ a property management company with substantial experience, managing, maintaining and operating affordable housing developments like that on the Premises. Upon such assignment, the Leasehold Foreclosure Transferee shall automatically be released of all obligations thereafter accruing under this Lease, provided that, substantially concurrently with such assignment, the assignee delivers to Lessor a written agreement assuming Tenant’s obligations under the Lease thereafter accruing. Any subsequent Transfers occurring after the one-time assignment permitted under this Section shall be subject to Article X.

17.7 Leasehold Mortgagee’s Right to New Lease.

17.7.1. In the event of any termination of this Lease (including any termination because of an Event of Default, or because of any rejection or disaffirmance of this Lease pursuant to bankruptcy law or any other law affecting creditor’s rights, but other than by reason of a Total Taking), Lessor shall give prompt written notice of such termination to each Leasehold Mortgagee EXHIBIT 11
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and shall (subject to Section 17.8 below if more than one Leasehold Mortgagee then exists) enter into a new lease (“New Lease”) of the Premises with the Leasehold Mortgagee holding the Leasehold Mortgage that has the most senior lien priority, in accordance with Section 17.8 below, or its designee, upon notice to Lessor by such Leasehold Mortgagee. The New Lease shall commence as of its effective date and shall continue for the remainder of the scheduled Term of this Lease, at the same Rent that is payable under this Lease, and on the same terms, conditions, covenants, restrictions and reservations that are contained in this Lease (including any extension options, purchase options and rights of first refusal, if any, provided for in this Lease), and subject to the rights of any tenants under residential subleases or other subtenants then in valid occupancy of the Premises and Improvements and further subject to any then existing senior Leasehold Mortgagees; provided that, substantially concurrently with the delivery of a notice by Leasehold Mortgagee requiring Lessor to enter into a New Lease, Leasehold Mortgagee shall pay to Lessor all Rent or any other amounts payable by Tenant hereunder which are then due and shall commence and proceed with diligence to cure all nonmonetary defaults under this Lease, other than those nonmonetary defaults which are personal to the foreclosed tenant and impossible for the Leasehold Mortgagee to remedy.

17.7.2. If such Leasehold Mortgagee elects to enter into a New Lease pursuant to Section 17.7.1 above, then County, Agency and the Leasehold Mortgagee (or its designee) shall promptly prepare and enter into a written New Lease; but until such written New Lease is mutually executed and delivered, this Lease shall govern, from and after the giving of notice pursuant to Section 17.7.1 but prior to the execution of the New Lease, the Lessor’s and Leasehold Mortgagee's relationship with respect to the Premises and the Improvements and the Leasehold Mortgagee shall (i) be entitled to possession of the Premises and to exercise all rights of Tenant hereunder, (ii) pay to Lessor any Rent accruing under the New Lease as it becomes owing, and (iii) perform or cause to be performed all of the other covenants and agreements under this Lease. Further, at such time as the written New Lease is mutually executed and delivered, Leasehold Mortgagee (or its designee) shall pay to Lessor its reasonable expenses, including reasonable attorneys’ fees and costs, incurred in connection with the preparation, execution and delivery of such written New Lease. In addition, upon execution of any such New Lease, Lessor shall execute, acknowledge and deliver to such Leasehold Mortgagee (or its designee) a grant deed, in recordable form, conveying to such Leasehold Mortgagee (or its designee) fee title to all Improvements in the event that title to such Improvements have vested with the County.

17.7.3. In the event that Lessor receives any net income (i.e., gross income less gross expenses on a cash basis), if any, from the Premises and Improvements during any period that Lessor may control the same, then the Leasehold Mortgagee under the New Lease shall be entitled to such net income received by Lessor except to the extent that it was applied to cure any default of Tenant (excluding specifically the application towards obligations under the County Loan Documents or the Agency Loan Documents).

17.7.4. All rights and claims of Tenant under this Lease shall be subject and subordinate to all right and claims of the tenant under the New Lease.

17.8 Multiple Leasehold Mortgages. If more than one Leasehold Mortgagee shall make a written request upon Lessor for a New Lease in accordance with the provisions of Section 17.7, then such New Lease shall be entered into pursuant to the request of the Leasehold Mortgagee holding the Leasehold Mortgage that has the most senior lien priority.

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Notwithstanding anything herein to the contrary, Lessor shall have no duty or obligation to resolve any disputes or conflicting demands between Leasehold Mortgagees. In the event of any conflicting demands made upon County and/or Agency by multiple Leasehold Mortgagees, Lessor may (subject to any applicable court orders to the contrary) rely on the senior lien priority created when taking into account all subordination and intercreditor agreements then recorded against the Property as determined by a national title company, and, if and to the extent a national title company determines that there are no such subordination and intercreditor agreements so recorded, at the direction of the Leasehold Mortgagee whose Leasehold Mortgage is recorded first in time in the Official Records of the County, as determined by any national title company.

17.9 Condemnation and Insurance Proceeds. Notwithstanding anything to the contrary contained herein, all condemnation proceeds (other than proceeds payable on account of the value of the Lessor’s Fee Interest as encumbered by this Lease) or insurance proceeds shall be subject to and paid in accordance with the requirements of the most senior (in order of lien priority) Leasehold Mortgage, subject, however, to any requirement in this Lease that, to the extent not in conflict with the terms of the applicable Leasehold Mortgage, such proceeds must be used to repair and restore the Improvements to the Premises which were damaged or destroyed by such condemnation or casualty (including, without limitation, as required in Article VII following a casualty and in Section 9.4.3 following a condemnation). The handling and disbursement of any such proceeds used to repair or restore the Improvements to the Premises shall be subject to the requirements of such senior Leasehold Mortgage. The Parties shall give all Leasehold Mortgagee(s) notice of any arbitration or condemnation proceedings, or of any pending adjustment of insurance claims, and any Leasehold Mortgagee shall have the right to intervene therein and shall be made a party to such proceedings.

The Parties hereby consent to such intervention. In the event that any Leasehold Mortgagee shall not elect to intervene or become a party to the proceedings, that Leasehold Mortgagee shall receive notice and a copy of any award or decision made in connection therewith. This provision, and Leasehold Mortgagee’s right to condemnation proceeds provided herein shall survive any termination of this Lease upon a total taking under Section 9.39.3.

17.10 Mortgagee Clauses. A standard mortgagee clause naming each Leasehold Mortgagee may be added to any and all insurance policies required to be carried by Tenant hereunder, provided that any such Leasehold Mortgagee shall hold and apply such insurance proceeds subject to the provisions of this Lease to the extent not in conflict with the terms of such Leasehold Mortgage.

17.11 No Waiver. No payment made to Lessor by a Leasehold Mortgagee shall constitute agreement that such payment was, in fact, due under the terms of this Lease; and a Leasehold Mortgagee having made any payment to Lessor pursuant to County and/or Agency’s wrongful, improper or mistaken notice or demand shall be entitled to the return of any such payment or portion thereof.

17.12 Fees and Costs. Tenant agrees to reimburse Lessor for its reasonable attorneys' fees and costs incurred in connection with Lessor’s review and/or approval of any documentation which may be required in connection with any Leasehold Mortgage by Tenant as provided herein.

17.13 No Termination, Cancellation, Surrender or Modification. Without the prior written consent of each Leasehold Mortgagee, (a) this Lease may not be terminated or cancelled by mutual agreement of County, Agency and Tenant, (b) Lessor may not accept the surrender this Lease or the Leasehold Estate created hereunder without the consent of each Leasehold Mortgagee, and (c) Commented [ST26]: Mirrors Stanton Inn. We cannot
have the default be recording priority when we have
subordination agreements in place setting priority and the ground lessors are our junior lenders.

Commented [ST27]: Again, this was agreed to in Stanton
Inn.

Commented [ST28]: From Stanton Inn. Senior deed of
trust provisions must control.

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this Lease may not be amended, modified or supplemented (and any action taken in furtherance of any of the foregoing without the required consent of each Leasehold Mortgagee shall be void and of no effect). In addition, if any term or provision of this Lease gives Tenant the right to terminate or cancel this Lease, in whole or in part, no such termination or cancellation shall be or become effective unless Tenant has first received approval in writing by each Leasehold Mortgagee.

17.14 Effect of Foreclosure upon Base Rent. Notwithstanding anything to the contrary contained elsewhere in this Lease, (i) in no event shall any Leasehold Mortgagee (or its designee) be required to pay or cure, in order to prevent the termination of this Lease, to exercise its cure rights hereunder or to obtain a New Lease or otherwise, any Base Rent or any obligations under the County Loan Documents or the Agency Loan Documents (collectively, “Excluded Defaults”), and (ii) in no event shall any Leasehold Mortgagee (or its designee) or its (or their) successors and assigns be required to pay or cure any Base Rent which otherwise became due and payable prior to completion of any foreclosure under any Leasehold Mortgage (or acceptance of any assignment or deed in lieu thereof) or any obligations under the County Loan Documents or the Agency Loan Documents.

Notwithstanding anything to the contrary set forth in this Lease, in no event shall “Annual Project Revenue” for purposes of calculating Base Rent under this Lease, include (i) the proceeds of a foreclosure sale by any Leasehold Mortgagee (or its nominee), or (ii) the proceeds of the first transfer by any such Leasehold Mortgagee (or its nominee) following any foreclosure or deed in lieu of foreclosure of a Leasehold Mortgage.

ARTICLE XVIII

BEST MANAGEMENT PRACTICES

18.1 Tenant and all of Tenant’s, subtenant, agents, employees and contractors shall conduct operations under this Lease so as to assure that pollutants do not enter municipal storm drain systems, in violation of applicable Laws, which systems are comprised of, but are not limited to curbs and gutters that are part of the street systems (“Stormwater Drainage System”), and to ensure that pollutants do not directly impact “Receiving Waters” (as used herein, Receiving Waters include, but are not limited to, rivers, creeks, streams, estuaries, lakes, harbors, bays and oceans).

18.2 The Santa Ana and San Diego Regional Water Quality Control Boards have issued National Pollutant Discharge Elimination System (“NPDES”) permits (“Stormwater Permits”) to the County of Orange, and to the Orange County Flood Control District (“District”) and cities within Orange County, as co-permittees (hereinafter collectively referred to as “NPDES Parties”) which regulate the discharge of urban runoff from areas within the County of Orange, including the Premises leased under this Lease. The NPDES Parties have enacted water quality ordinances that prohibit conditions and activities that may result in polluted runoff being discharged into the Stormwater Drainage System.

18.3 To assure compliance with the Stormwater Permits and water quality ordinances, the NPDES Parties have developed a Drainage Area Management Plan (“DAMP”) which includes a Local Implementation Plan (“LIP”) for each jurisdiction that contains Best Management Practices (“BMPs”) that parties using properties within Orange County must adhere to. As used herein, a BMP is defined as a technique, measure, or structural control that is used for a given set of conditions to manage the quantity and improve the quality of stormwater runoff in a cost effective manner.

These BMPs are found within the District and/or County’s LIP in the form of Model Maintenance Commented [ST29]: See Stanton Inn.

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Procedures and BMP Fact Sheets (the Model Maintenance Procedures and BMP Fact Sheets contained in the DAMP/LIP shall be referred to hereinafter collectively as “BMP Fact Sheets”) and contain pollution prevention and source control techniques to eliminate non-stormwater discharges and minimize the impact of pollutants on stormwater runoff.

18.4 BMP Fact Sheets that apply to uses authorized under this Lease include the BMP Fact Sheets that are attached hereto as Exhibit C. These BMP Fact Sheets may be modified during the term of the Lease; and the Lessor shall provide Tenant with any such modified BMP Fact Sheets.

Tenant, its agents, contractors, representatives and employees and all persons authorized by Tenant to conduct activities on the Premises shall, throughout the term of this Lease, comply with the BMP Fact Sheets as they exist now or are modified, and shall comply with all other requirements of the Stormwater Permits, as they exist at the time this Lease commences or as the Stormwater Permits may be modified. Tenant agrees to maintain current copies of the BMP Fact Sheets on the Premises throughout the term of this Lease. The BMPs applicable to uses authorized under this Lease must be performed as described within all applicable BMP Fact Sheets.

18.5 Tenant may propose alternative BMPs that meet or exceed the pollution prevention performance of the BMP Fact Sheets. Any such alternative BMPs shall be submitted to the Lessor for review and approval prior to implementation.

18.6 Lessor may enter the Premises and/or review Tenant’s records at any reasonable time during normal business hours to ensure that activities conducted on the Premises comply with the requirements of this Section. Tenant may be required to implement a self-evaluation program to demonstrate compliance with the requirements of this Section.

ARTICLE XIX

GENERAL CONDITIONS & MISCELLANEOUS PROVISIONS

19.1 Signs. Tenant agrees not to construct, maintain, or allow any signs, banners, flags, etc., upon the Premises except (a) as approved in writing in advance by Lessor, which approval may be withheld in the sole and absolute discretion of the Lessor, or (b) required by any of Tenant’s lenders, provided that any such signage is in compliance with all applicable Laws. Tenant further agrees not to construct, maintain, or allow billboards or outdoor advertising signs upon the Premises.

Unapproved signs, banners, flags, etc., may be removed by Lessor without prior notice to Tenant.

19.2 Nondiscrimination. Tenant agrees not to discriminate against any person or class of persons by reason of sex, age (except as permitted by law), race, color, creed, physical handicap, or national origin in employment practices and in the activities conducted pursuant to this Lease.

19.3 Taxes and Assessments. Pursuant to California Revenue and Taxation Code Section 107.6, Tenant is specifically informed that this Lease may create a possessory interest which is subject to the payment of taxes levied on such interest. It is understood and agreed that all taxes and assessments (including but not limited to said possessory interest tax) which become due and payable upon the Premises or upon fixtures, equipment, or other property installed or constructed thereon, shall be the full responsibility of Tenant, and Tenant shall cause said taxes and assessments to be paid promptly.

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19.4 Quitclaim of Interest upon Termination. Upon termination of this Lease for any reason whatsoever in accordance with the terms of the Lease, Tenant shall execute, acknowledge, and deliver to Lessor, within five (5) business days, a good and sufficient deed, in a form as approved by the Lessor, whereby all right, title, and interest of Tenant in the Premises is quitclaimed back to Lessor (“Quitclaim Deed”). The Quitclaim Deed shall then be recorded by Lessor to remove any cloud on title created by this Lease. In the event that the Tenant fails to provide such Quitclaim Deed within five (5) additional business days after written demand by either the County or City, the Parties agree that the County and City will be damaged and entitled to compensation for those damages. Such actual damages will, however, be extremely difficult to ascertain. Therefore, if the Tenant does not provide the required Quitclaim Deed after such notice and cure period, in addition to any other remedy provided by law or equity, the Tenant shall pay the Lessor $2,000 per day for every day that passes until a Quitclaim Deed is delivered, which amount shall be deemed to constitute a reasonable estimate of Lessor’s damages and not a penalty. Such amount shall become due and payable by Tenant to Lessor for each calendar day that passes beyond the cure period.

Notwithstanding the foregoing, if the Tenant has disputed the termination of the Lease by Lessor, upon a final determination by a court of competent jurisdiction that the Lease has not been terminated, Tenant shall not be subject to payment of the foregoing damages.

19.5 Public Records. Tenant acknowledges that any written information submitted to and/or obtained by Lessor from Tenant or any other person or entity having to do with or related to this Lease and/or the Premises, either pursuant to this Lease or otherwise, is a “public record” open to inspection and copying by the public pursuant to the California Public Records Act (Government Code §6250, et seq.) (“CPRA”) as now in force or hereafter amended, or any Law in substitution thereof, or otherwise made available to the public, unless such information is exempt from disclosure pursuant to the applicable sections of CPRA. In the event that a CPRA request is made for any financial statements and records (not including Gross Receipts Statements) and the Lessor determines that the records must be turned over, the Lessor will give Tenant fifteen (15) days’ written notice prior to turning over such records so that Tenant can take any necessary action, including, but not limited to, injunctive relief, to prevent Lessor from turning over such financial statements and records.

19.6 Attorney’s Fees. In any action or proceeding brought to enforce or interpret any provision of this Lease, or where any provision hereof is validly asserted as a defense, each Party shall bear its own attorneys’ fees and costs.

19.7 Payment Card Compliance. Should Tenant conduct credit/debit card transactions in conjunction with Tenant’s business with the County and/or Agency, on behalf of the County and/or Agency, or as part of the business that Tenant conducts on the Premises, Tenant covenants and warrants that it will during the course of such activities be Payment Card Industry Data Security Standard (“PCI/DSS”) and Payment Application Data Security Standard (“PA/DSS”) compliant and will remain compliant during the entire duration of its conduct of such activities. Tenant agrees to immediately notify Lessor in the event Tenant should ever become non-compliant at a time when compliance is required hereunder, and will take all necessary steps to return to compliance and shall be compliant within ten (10) days of the commencement of any such interruption. Upon demand by Lessor, Tenant shall provide to Lessor written certification of Tenant’s PCI/DSS and/or PA/DSS compliance.

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19.8 Right to Work and Minimum Wage Laws.

19.8.1. In accordance with the United States Immigration Reform and Control Act of 1986, Tenant shall require its employees that directly or indirectly service the Premises, pursuant to the terms and conditions of this Lease, in any manner whatsoever, to verify their identity and eligibility for employment in the United States. Tenant shall also require and verify that its contractors or any other persons servicing the Premises, pursuant to the terms and conditions of this Lease, in any manner whatsoever, verify the identity of their employees and their eligibility for employment in the United States.

19.8.2. Pursuant to the United States of America Fair Labor Standard Act of 1938, as amended, and State of California Labor Code, Section 1178.5, Tenant shall pay no less than the greater of the Federal or California Minimum Wage to all its employees that directly or indirectly service the Premises, in any manner whatsoever. Tenant shall require and verify that all its contractors or other persons servicing the Premises on behalf of the Tenant also pay their employees no less than the greater of the Federal or California Minimum Wage.

19.8.3. Tenant shall comply and verify that its general contractor complies with all other Federal and State of California laws for minimum wage, overtime pay, record keeping, and child labor standards pursuant to the servicing of the Premises or terms and conditions of this Lease.

19.9 Declaration of Knowledge by Tenant. Tenant warrants that Tenant has carefully examined this Lease and by investigation of the site and of all matters relating to the Lease arrangements has fully informed itself as to all existing conditions and limitations affecting the construction of the Lease improvements and business practices required in the operation and management of the uses contemplated hereunder.

19.10 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of California and the City.

19.11 Venue. The Parties hereto agree that this Lease has been negotiated and executed in the State of California and shall be governed by and construed under the laws of California. In the event of any legal action to enforce or interpret this Lease, 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. Furthermore, the Parties hereto specifically agree to waive any and all rights to request that an action be transferred for trial to another county.

19.12 Headings and Titles. The captions of the Articles or Sections of this Lease are only to assist the Parties in reading this Lease and shall have no effect upon the construction or interpretation of any part hereof.

19.13 Interpretation. Whenever required by the context of this Lease, the singular shall include the plural and the plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. In any provision relating to the conduct, acts or omissions of Tenant, the term “Tenant” shall include Tenant’s agents, employees, contractors, invitees, successors or others using the Premises with Tenant’s expressed or implied permission. In any provision relating to the conduct, acts or omissions of County, the term “County” shall include County’s agents, employees, contractors, invitees, successors or others using the Premises with EXHIBIT 11
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County’s expressed or implied permission. In any provision relating to the conduct, acts or omissions of Agency, the term “Agency” shall include Agency’s agents, employees, contractors, invitees, successors or others using the Premises with Agency’s expressed or implied permission.

19.14 Ambiguities. Each Party hereto has reviewed this Lease with legal counsel, and has revised (or requested revisions of) this Lease based on the advice of counsel, and therefore any rules of construction requiring that ambiguities are to be resolved against a particular Party shall not be applicable in the construction and interpretation of this Lease or any exhibits hereto.

19.15 Successors and Assigns. Except as otherwise specifically provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon and shall inure to the benefit of the Parties hereto and their respective heirs, personal representatives, successors and assigns. All rights herein granted to any Leasehold Mortgagee of Tenant shall also apply to any Leasehold Mortgagee of any successor or assign of Tenant.

19.16 Time is of the Essence. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.

19.17 Severability. If any term or provision of this Lease is held invalid or unenforceable to any extent under any applicable law by a court of competent jurisdiction, the remainder of this Lease shall not be affected thereby, and each remaining term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.

19.18 Integration. This Lease, along with any exhibits, attachments or other documents affixed hereto or referred to herein and related Agency permits, constitute the entire agreement between County, Agency and Tenant relative to the leasing of the Premises. This Lease and such exhibits, attachments and other documents may be amended or revoked only by an instrument in writing signed by County, Agency and Tenant. County, Agency and Tenant hereby agree that no prior agreement, understanding or representation pertaining to any matter covered or mentioned in this Lease shall be effective for any purpose.

19.19 Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, or electronic mail, shall be deemed received upon the earlier of (a) if personally delivered, the date of delivery to the address of the person to receive such notice, (b) if mailed, three (3) business days after the date of posting by the United States post office, (c) if given by electronic mail, when sent if before 5:00 p.m., otherwise on the next business day, or (d) if delivered by overnight delivery, one (1) business day after mailing. Any notice, request, demand, direction or other communication sent by electronic mail must be confirmed within by letter mailed or delivered within two business days in accordance with the foregoing.

Either Party may change the address for notices by giving the other Party at least ten (10) calendar days’ prior written notice of the new address.

If to Lessor: County of Orange
c/o CEO/Corporate Real Estate
333 W. Santa Ana Blvd, 3rd Floor
Santa, Ana, CA 92702
Attn: Chief Real Estate Officer
Commented [ST30]: From Stanton.

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And to:

Housing Authority of the City of Santa Ana
20 Civic Center Plaza (M-26)
P.0. Box 1988
Santa Ana, California 92702
Attn: Housing Manager
With a copy to: Office of the City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor (M-29)
Santa Ana, California 92702
If to Tenant: c/o The Related Companies of California, LLC 19201 Von Karman Avenue, Suite 900
Irvine, CA 92612
Attention: President
c/o A Community of Friends
3701 Wilshire Boulevard, Suite 700
Los Angeles, CA 90010
Attention: Dora Leong Gallo, President and Chief Executive Officer And to:

With a copy to: Bocarsly Emden Cowan Esmail & Arndt LLP 633 W. 5th Street, 64th Floor
Los Angeles. CA 90071
Attention: Lance Bocarsly, Esq.

And to:

U.S. Bancorp Community Development Corporation
1307 Washington Ave., Suite 300
St. Louis, MO 63103

19.20 Amendments. This Lease is the sole and only agreement between the Parties regarding the subject matter hereof; other agreements, either oral or written, are void. Any changes to this Lease shall be in writing and shall be properly executed by all Parties.

19.21 Limited Partner Cure Rights. In the event the Tenant is a partnership, the Lessor agrees to accept a cure of any Event of Default by Tenant made by any one or more of the Tenant’s limited partners as if such cure had been made by Tenant, provided such cure is made in accordance with the applicable provisions of this Lease.

19.22 Dispositions of Abandoned Property. If Tenant abandons or quits the Premises or is dispossessed thereof by process of law or otherwise, title to any personal property belonging to and EXHIBIT 11
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left on the Premises thirty (30) days after such event shall, at County and/or Agency’s option, be deemed to have been transferred to County and/or Agency. County and/or Agency shall have the right to remove and to dispose of such property at Tenant’s cost, including the cost of labor, materials, equipment and an administrative fee equal to fifteen percent (15%) of the sum of such costs without liability therefor to Tenant or to any person claiming under Tenant, and shall have no need to account therefor. At Lessor's option, Lessor may provide Tenant with an invoice for such costs, which invoice Tenant agrees to pay within fifteen (15) days of receipt.

19.23 Brokers. If Tenant has engaged a broker in this transaction pursuant to a separate agreement, Tenant shall be solely responsible for the payment of any broker commission or similar fee payable pursuant to such separate agreement. Tenant each hereby agree to indemnify and hold the Lessor harmless from and against all costs, expenses or liabilities (including attorney fees and court costs, whether or not taxable and whether or not any action is prosecuted to judgment) incurred by the County and/or Agency in connection with any claim or demand by a person or entity for any broker’s, finder’s or other commission or fee from the County and/or Agency in connection with the Tenant’s entry into this Lease and the transactions contemplated hereby based upon any alleged statement or representation or agreement of the Tenant. No broker, finder or other agent of any Party hereto shall be a third-party beneficiary of this Lease

19.24 No Partnership. This Lease shall not be construed to constitute any form of partnership or joint venture between County, Agency and Tenant. County, Agency and Tenant mutually acknowledge that no business or financial relationship exists between them other than as County, Agency and Tenant, and that County and Agency is not responsible in any way for the debts of Tenant or any other Party.

19.25 Authorization. County, Agency and Tenant (each, a “signing party”) each represents and warrants to the other that the person or persons signing this Lease on behalf of the signing party has full authority to do so and that this Lease binds the signing party. Concurrently with the execution of this Lease, the Tenant shall deliver to the Lessor a certified copy of a resolution of the signing party’s board of directors or other governing board authorizing the execution of this Lease by the signing party.

19.26 Recording. This Lease itself shall not be recorded, but in the event that the Tenant encumbers the leasehold as set forth in Article XVII, a memorandum hereof may be recorded in the form of Exhibit D attached hereto (the “Memorandum”). The Memorandum may be executed concurrently with this Lease and thereafter recorded in the Official Records of the County Recorder on the Effective Date of this Lease has occurred. Tenant shall be responsible for the payment of all charges imposed in connection with the recordation of the Memorandum, including, without limitation, any documentary transfer tax imposed in connection with this transaction and all recording fees and charges.

19.27 Exhibits. This Lease contains the following exhibits, schedules and addenda, each of which is attached to this Lease and incorporated herein in its entirety by this reference:

Exhibit A: Legal Description of the Premises
Exhibit A-1: Rendering of the Premises
Exhibit B: Initial Improvements
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Exhibit C: Best Management Practices Fact Sheets
Exhibit D: Form of Memorandum of Lease

19.28 Consent/Duty to Act Reasonably. Except as otherwise expressly provided herein, whenever this Lease grants County, Agency and/or Tenant the right to take any action, grant any approval or consent, or exercise any discretion, County, Agency and/or Tenant shall act reasonably and in good faith and take no action which might result in the frustration of the other Party’s reasonable expectations concerning the benefits to be enjoyed under this Lease.

19.29 Counterparts. For the convenience of the Parties to this Lease, this Lease may be executed in several original counterparts, each of which shall together constitute but one and the same agreement. Original executed pages may be assembled together into one fully executed document.

19.30. No Merger. The interests created by this Lease shall not be extinguished by merger of any or all of the ownership interests the Premises or the Improvements in one person or entity.

19.31 Cooperation of County and Agency. County and Agency hereby agree that (a) Agency staff shall be responsible for administering the operation of the Project to insure it is being used in conformance with this Lease, and (b) Agency staff shall serve as administrator of the Lease with the Tenant and coordinate with the County as necessary. County and Agency hereby agree to work cooperatively and expeditiously to provide written consent (or written refusal to provide consent) to Tenant, the Leasehold Mortgagees and Limited Partner hereunder. [Signatures On Following Pages]

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IN WITNESS WHEREOF, the Parties have executed this Lease on the date first written above.

TENANT

WASHINGTON SANTA ANA HOUSING
PARTNERS, L.P., a California limited partnership
By: Related/Washington Santa Ana
Development Co., LLC, a California limited
liability company, its Administrative General
Partner
By: ____________________________
Frank Cardone, President
By: Supportive Housing LLC, a California
limited liability company
By: A Community of Friends, a California
nonprofit public benefit corporation,
its sole member/manager
By: ____________________
Dora Leong Gallo,
President and Chief
Executive Officer
APPROVED AS TO FORM:

SONIA CARAVALHO

AUTHORITY GENERAL COUNSEL
By: ________________________
Ryan O. Hodge, Assistant City Attorney
Date _______________________
LESSOR

HOUSING AUTHORITY OF THE CITY OF

SANTA ANA ACTING AS THE HOUSING

SUCCESSOR AGENCY
a public body, corporate and politic
By: ________________________
Steven A. Mendoza, Executive Director
Date _______________________
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June 9, 2022
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APPROVED AS TO FORM:

COUNTY COUNSEL
By: ________________________
Deputy
Date _______________________
COUNTY OF ORANGE, a political subdivision of
the State of California
__________________________________
Thomas A. Miller, Chief Real Estate Officer
Orange County, California
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Exhibit A
Legal Description (After Lot Merger)
PARCEL 1:

THAT PORTION OF THE RANCHO SANTIAGO DE SANTA ANA IN THE CITY OF

SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA PER MAP RECORDED IN BOOK 3 PAGE 420 OF PATENTS, RECORDS OF LOS ANGELES COUNTY IN THE

OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST TERMINUS OF THAT CERTAIN COURSE ON THE

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EXHIBIT A-1

RENDERING OF THE PROPERTY
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 City Council 68 – 4796/21/2022  THE CROSSROADS AT WASHINGTON A-3

SANTA ANA, CA
0 20 40 80
ENTITLEMENT SUBMITTAL DP NO. 2019-39, MASTER ID NO. 2019-155122 © 2020 WILLIAM HEZMALHALCH ARCHITECTS, INC. DBA WHA. | 2018265 | 02-03-2020 CONCEPTUAL PERSPECTIVE RENDERING | SANTA ANA BOULEVARD
NOTE: ARTIST CONCEPTION; LANDSCAPE, COLORS, MATERIALS AND APPLICATION MAY VARY.

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THE CROSSROADS AT WASHINGTON A-4

SANTA ANA, CA
0 20 40 80
ENTITLEMENT SUBMITTAL DP NO. 2019-39, MASTER ID NO. 2019-155122 © 2020 WILLIAM HEZMALHALCH ARCHITECTS, INC. DBA WHA. | 2018265 | 02-03-2020 CONCEPTUAL PERSPECTIVE RENDERING | WASHINGTON AVENUE
NOTE: ARTIST CONCEPTION; LANDSCAPE, COLORS, MATERIALS AND APPLICATION MAY VARY.

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THE CROSSROADS AT WASHINGTON A-5

SANTA ANA, CA
0 20 40 80
ENTITLEMENT SUBMITTAL DP NO. 2019-39, MASTER ID NO. 2019-155122 © 2020 WILLIAM HEZMALHALCH ARCHITECTS, INC. DBA WHA. | 2018265 | 02-03-2020 70'-11"
18'-0"
18'-0"
24'-0"
18'-0"
8'-6"
TYP.
10'-6"
55'-11"
5'-0" 8'-6"
4'-3"
5'-0"
6'-1"
7'-5"
5'-9"
5'-0"
15'-0"
R42'-0"

TRASH TRUCK TURNING RADIUS
10'-0"
8'-2"
10'-0"
T
7'-0"
7'-3"
47'-4"
6'-0"
6'-0"
6'-0"
6'-0"
5'-0"
7'-2"
8'-9"
10'-0"
15'-0"
19'-2" 14'-1"
70'-11"
18'-0"
18'-0"
24'-0"
18'-0"
8'-6"
TYP.
10'-6"
55'-11"
5'-0" 8'-6"
4'-3"
5'-0"
6'-1"
7'-5"
5'-9"
5'-0"
15'-0"
R42'-0"

TRASH TRUCK TURNING RADIUS
10'-0"
8'-2"
10'-0"
T
7'-0"
7'-3"
47'-4"
6'-0"
6'-0"
6'-0"
6'-0"
5'-0"
7'-2"
8'-9"
10'-0"
15'-0"
43 Cubic Yards Required (86 Units x 0.5 CY/Unit)
48 Cubic Yards Provided (12 Bins x 4 CY/Bin)
Notes:
• Minimum vertical clearance of 25’ at the staging
area for bin service clearance.
• Minimum 13’ vertical clearance for scout truck.
• All staging areas are to be onsite. No street
staging is permitted.
• All driveway and staging areas must be able to
sustain a minimum gross weight of 60,000 lbs.
per vehicle.
• Maximum size of bin shall be 4 cubic yards.
• Maximum number of pick-ups is 2 times per
week for residential projects only.
0 10 20 40

ARCHITECTURAL SITE PLAN
0 10 20 40
N
E. SANTA ANA BLVD.

EVA

SOUND WALL ALONG

PROPERTY LINE

EMERGENCY VEHICLE

TURN AROUND

LINE OF UNITS ABOVE

TRASH TRUCK

TURN AROUND
LEGEND

ACCESSIBLE PARKING SPACE

ACCESSIBLE PATH OF TRAVEL

ELECTRIC VEHICLE PARKING
TANDEM PARKING SPACE #

FIRE HYDRANT

VEHICULAR ACCESS

EMERGENCY VEHICLE ACCESS

TRASH / RECYCLING

WASHINGTON AVE
Tandem Parking. The term “tandem
space or stall”...shall mean a parking
stall that is not independently accessible
because another stall is located
immediately behind it.

INDICATES NUMBER

OF TANDEM SPACES
11T
38T
31T
21T

EV PARKING
CALGreen 2016, 4.106.2
Infrastructure for future installation of EV charging equipment Parking Ratio Parking Provided EV Spaces
3% of Parking Prov.
1 Space Req 7 Spaces 1 Space
4 Spaces Req 113 Spaces 3 Spaces
1 Acc. Space

ACCESSIBLE PARKING
CBC 11B-208.2.3.1
Table 11B-208.2
11B-208.2.4: Van Parking Spaces
Per Table 11B-208.2 Parking Provided Acc. Spaces
1-25 Spaces 1 Space Req 7 Spaces 1 Space
101-150 Spaces 5 Spaces Req 113 Spaces 4 Spaces
1 Van Space

PARKING PROVIDED
Use Type Parking Count
Standard Spaces 82 Spaces
Tandem Spaces (31.7%) 38 Spaces
TOTAL PARKING PROVIDED (13.7% REDUCTION) 120 Spaces
* SEE CS-2 FOR PARKING ALLOCATION NOTES

SEE CIVIL SITE PLANS FOR EXISTING

CONDITIONS, IMPROVEMENTS AND UTILITIES

SEE LANDSCAPE FOR PLANTING, WALKWAYS,

SITE AMENITIES, WALLS AND FENCING
#T
EV

PROPOSED

TRANSFORMER LOCATION
*
5 FREEWAY OFF-RAMP

COMMUNITY

SERVING RETAIL
(2-STORY VOLUME)
1,060 S.F.

MULTI-PURPOSE
ROOM

EMERGENCY VEHICLE

TURN AROUND
40' X 16'

TRASH TRUCK

STAGING AREA
T/R
T/R
T/R
T/R
40' X 16'

TRASH TRUCK

STAGING AREA
40' X 16'

TRASH TRUCK

STAGING AREA
PROVIDE 4" ROLLED CURB, SEE CIVIL
*
150' HOSE PULL DISTANCE
*
286.9' PL
150.4' PL
166.0' (45' RAD) PL

62.7' (72' RAD) PL

25.1' PL
621.3' PL
193.7' PL
133.8' PL
MAINT.

SHOP
SOCIAL

SERVICE
LOUNGE
SOCIAL

SERVICE
OFFICE
MAIL
ENTRY
FOYER
TECH

LABSTOR
CONF
OFFICE
OFFICE
WORK
AREA

LOBBY RECPT

GALLERY

LAUNDRY
UNIT E

UNIT B UNIT B
UNIT B

JANITOR
M
W
POOL
EQ.

UNIT B UNIT B
UNIT A
UNIT B
UNIT A
UNIT C
UNIT C
UNIT C
UNIT C
UNIT C
UNIT C
UNIT C
UNIT C
UNIT D2
UNIT D2 UNIT D2
UNIT D1
UNIT D1
SIDE YARD SETBACK 0'-0" REQUIRED
SIDE YARD SETBACK 0'-0" REQUIRED
FRONT YARD SETBACK 0'-0" REQUIRED
REAR YARD SETBACK 15'-0" REQUIRED
MECH

DOG RUN
RR
POOL

TOT LOT

BBQ & PICNIC
AREA

BBQ AREA
GATE
GATE
UNIT D1
EV
EV
EV
EV
RETAIL
RETAIL
RETAIL
UNIT A
STOR.

LOCKERS
ELEV.

MACH.

EV
USPS
STAFF
STAFF

BIKE RACKS
EXHIBIT 11
City Council 68 – 482 6/21/2022
Page | 68
4894-6811-3695v.2 0017787-000542
4894-6811-3695v.2 0017787-000542

EXHIBIT B

INITIAL IMPROVEMENTS
The proposed Project includes the development of two residential buildings with 86 units surrounding two interior, landscaped courtyard/amenity spaces. The Project includes 16 studio units, 26 one bedroom units, 22 two-bedroom units, 17 three-bedroom units, and 5 four-bedroom units. All units will be flat apartments located on the first, second, third and fourth floors. In addition, a proposed sound wall is being positioned along the eastern property line adjacent to the US Interstate 5 ramp. Approximately 3,500 square foot of interior community amenities and leasing offices is designed to accommodate supportive and management services.

The Project will be 100% affordable to households earning no more than 30 percent of Area Median Income (AMI) for Orange County of which 43 units will be set-aside for Permanent Supportive Housing (PSH), with one exempt 2-bedroom managers unit. The unit mix and rent restrictions are as follows, provided, however, the rent and income restrictions applicable to the Project shall be set forth in and subject to the terms of the County Loan Regulatory Agreement:

Bedroom
Size
30%

AMI (PSH)
30%
AMI
Manager’s
Unit Total Units
Studios 16 16
One-Bedroom 26 26
Two-Bedroom 1 20 1 22
Three-Bedroom 17 17
Four-Bedroom 5 5
TOTAL 43 42 1 86
[We understand that there will be float up language inSection 2(g) of the County’s Loan Regulatory Agreement and the Agency’s Regulatory Agreement(s). Please mirror that float up language here on this exhibit (as the County did on Stanton Inn) or include a cross reference to those sections here with an indication that it appliesregarding a loss of subsidy is incorporated herein as if set forth at full length herein. Thanks.]

EXHIBIT 11
City Council 68 – 483 6/21/2022
Page | 69
4894-6811-3695v.2 0017787-000542
4894-6811-3695v.2 0017787-000542

EXHIBIT C
Best Management Practices
(“BMPs” Fact Sheets)
Best Management Practices can be found at: http://www.ocwatersheds.com/documents/bmp which website may change from time to time.

BMPs apply to the TENANT's defined Premises and BMPs also apply to the TENANT’s Contractor therefore TENANT shall cause Contractor to be responsible for implementing and complying with all BMP Fact Sheet requirements that apply to construction activity with respect to the Improvements, and also including, without limiting the generality of the foregoing, site preparation, landscaping, installation of utilities, street construction or improvement and grading or filling in or on the Premises. TENANT is to be aware that the BMP clause within this Lease, along with all related BMP Exhibits, may be revised, and may incorporate more than what is initially being presented in this Lease. Suggested BMPs Fact Sheets may include, but may not be limited to, the following list shown below and can be found at:
http://www.ocwatersheds.com/documents/bmp/industrialcommercialbusinessesactivities (which website may change from time to time):

IC3 Building Maintenance
IC4 Carpet Cleaning
IC6 Contaminated or Erodible Surface Areas
IC7 Landscape Maintenance
IC9 Outdoor Drainage from Indoor Areas
IC10 Outdoor Loading/Unloading of Materials
IC12 Outdoor Storage of Raw Materials, Products, and Containers IC14 Painting, Finishing, and Coatings of Vehicles, Boats, Buildings, and Equipment IC15 Parking & Storage Area Maintenance
IC17 Spill Prevention and Cleanup
IC21 Waste Handling and Disposal
IC22 Eating and Drinking Establishments
IC23 Fire Sprinkler Testing/Maintenance
IC24 Wastewater Disposal Guidelines
EXHIBIT 11
City Council 68 – 484 6/21/2022
Page | 70
4894-6811-3695v.2 0017787-000542
4894-6811-3695v.2 0017787-000542

EXHIBIT D

FORM OF MEMORANDUM OF LEASE

MEMORANDUM OF LEASE
This is a Memorandum of Lease (“Memorandum”) made and entered into as of this __________ day of __________, 20___, by and between the County of Orange, a political subdivision of the State of California, the Housing Authority of the City of Santa Ana, a public body, corporate and politic (collectively, the “Lessor”) and __________, (“Tenant”), residing at _________, upon the following terms:

1. Lease. The provisions set forth in a written ground lease between the parties hereto dated __________ (“Lease”), are hereby incorporated by reference into this Memorandum.

2. Subject Premises. The Premises which are the subject of the Lease are more particularly described as on Exhibit A, attached hereto

3. Effective Date of Lease. The Lease shall be deemed to have commenced on __________ (the “Effective Date”) as set forth within the terms of the Lease.

4. Term. The Term of the Lease shall be Sixty-Five (65) years from the Effective Date as stated in the written Lease. The Term shall commence on the date hereof and terminate Sixty-Two (62) years from the Commencement Date, which is the date on which a Certificate of Occupancy is issued for the Project, provided, however the Term shall be no longer than sixty five (65) years from the Effective Date.

5. Duplicate Copies of the originals of the Lease are in the possession of the Lessor and Tenant and reference should be made thereto for a more detailed description thereof and for resolution of any questions pertaining thereto. The addresses for Lessor and Tenant are as follows:

If to Lessor: County of Orange
c/o CEO/Corporate Real Estate
333 W. Santa Ana Blvd, 3rd Floor
Santa, Ana, CA 92702
Attn: Chief Real Estate Officer
And to:

Housing Authority of the City of Santa Ana
20 Civic Center Plaza (M-26)
P.0. Box 1988
Santa Ana, California 92702
Attn: Housing Manager
With a copy to: Office of the City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor (M-29)
Santa Ana, California 92702
EXHIBIT 11
City Council 68 – 485 6/21/2022
Page | 71
4894-6811-3695v.2 0017787-000542
4894-6811-3695v.2 0017787-000542
If to Tenant: c/o The Related Companies of California, LLC 19201 Von Karman Avenue, Suite 900
Irvine, CA 92612
Attention: President
c/o A Community of Friends
3701 Wilshire Boulevard, Suite 700
Los Angeles, CA 90010
Attention: Dora Leong Gallo
And to:

With a copy to: Bocarsly Emden Cowan Esmail & Arndt LLP 633 W. 5th Street, 64th Floor
Los Angeles. CA 90071
Attention: Lance Bocarsly, Esq.

6. Purpose. It is expressly understood and agreed by all Parties that the sole purpose of this Memorandum is to give record notice of the Lease; it being distinctly understood and agreed that said Lease constitutes the entire lease and agreement between Lessor and Tenant with respect to the Premises and is hereby incorporated by reference. The Lease contains and sets forth additional rights, terms, conditions, duties, and obligations not enumerated within this instrument which govern the Lease. This Memorandum is for informational purposes only and nothing contained herein may be deemed in any way to modify or vary any of the terms or conditions of the Lease. In the event of any inconsistency between the terms of the Lease and this instrument, the terms of the Lease shall control. The rights and obligations set forth herein shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, representatives, successors, and assigns.

EXHIBIT 11
City Council 68 – 486 6/21/2022
Page | 72
4894-6811-3695v.2 0017787-000542
4894-6811-3695v.2 0017787-000542
IN WITNESS WHEREOF, the Parties hereto have executed this Memorandum pursuant to due authorization on the dates herein acknowledged.

COUNTY:

By: ______________________
Name: ______________________
Title: ______________________
AGENCY:

By: ______________________
Name: ______________________
Title: ______________________
TENANT:

By: ______________________
Name: ______________________
Title: ______________________
By: ______________________
Name: ______________________
Title: ______________________
EXHIBIT 11
City Council 68 – 487 6/21/2022
Document comparison by Workshare Compare on Wednesday, June 8, 2022 2:49:21 PM
Input:

Document 1 ID
file://C:\Users\switt\Documents\US BANK - CCRC -
CROSSROADS AT WASHINGTON - DWT _ATT
Comments to Ground Lease Agreement (1001985-1).docx
Description

US BANK - CCRC - CROSSROADS AT WASHINGTON -
DWT _ATT Comments to Ground Lease Agreement
(1001985-1)
Document 2 ID file://C:\Users\switt\Documents\Crossroads at Washington Ground Lease - County Clean - 6-8-22.docx
Description Crossroads at Washington Ground Lease - County Clean - 6-8-22
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EXHIBIT 11
City Council 68 – 488 6/21/2022
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EXHIBIT 11
City Council 68 – 489 6/21/2022

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Santa Ana City CouncilJune 21, 2022

Santa Ana City Council
June 21, 2022