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HomeMy WebLinkAboutItem 11a - Preserving Middle-Income Housing DATE: May 18, 2021 TO: Honorable Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director By: Tim Schwehr, Senior Management Analyst SUBJECT: RESOLUTION NO. 7358 AUTHORIZING THE CITY TO BECOME A MEMBER OF THE CALIFORNIA COMMUNITY HOUSING AGENCY (“CALCHA”) AND AUTHORIZING THE CITY MANAGER TO ENTER INTO PUBLIC BENEFIT AGREEMENTS WITH CALCHA IN SUPPORT OF THEIR ISSUANCE OF TAX-EXEMPT BONDS TO CREATE OR PRESERVE MIDDLE-INCOME RENTAL HOUSING IN ARCADIA Recommendation: Adopt RESOLUTION NO. 7359 AUTHORIZING THE CITY TO BECOME A MEMBER OF THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY COMMUNITY IMPROVEMENT AUTHORITY (“CSCDA CIA”) AND AUTHORIZING THE CITY MANAGER TO ENTER INTO PUBLIC BENEFIT AGREEMENTS WITH CSCDA CIA IN SUPPORT OF THEIR ISSUANCE OF TAX-EXEMPT BONDS TO CREATE OR PRESERVE MIDDLE-INCOME RENTAL HOUSING IN ARCADIA Recommendation: Adopt SUMMARY The California Community Housing Agency (“CalCHA”) and the California Statewide Communities Development Authority Community Improvement Authority (“CSCDA CIA”) are two recently created California Joint Powers Authorities (“JPA”) founded with the purpose of creating and preserving middle-income housing throughout California. CalCHA and CSCDA CIA operate by issuing tax-exempt bonds for the purpose of acquiring market-rate apartments and converting them to rent-restricted units for predominately moderate-income families and individuals. The City would not be fiscally liable or otherwise responsible for any of the bonds that may be issued but would forego property taxes as part of the conversion of any participating project site. The City would also have the ability to acquire the property for free at the end of the life of the bonds, or receive the proceeds from a sale of the property. In addition, if there is any net cash flow from operating the property on an annual basis, the City would receive those proceeds. Middle-Income Housing JPA’s May 18, 2021 Page 2 of 5 It is recommended that the City Council adopt Resolution Nos. 7358 and 7359 authorizing the City to become additional members of CalCHA and CSCDA CIA, and authorizing the City Manager to enter into Public Benefit Agreements in support of their issuance of tax-exempt bonds to create or preserve middle-income rental housing in Arcadia. BACKGROUND The California Community Housing Agency (“CalCHA”) is a Joint Powers Authority founded in January 2019, focused on the acquisition of existing market-rate apartments for conversion to long-term workforce rental housing. CalCHA currently has 27 member public agencies, including the Cities of Glendale, Carson, and Palm Springs. Through an ongoing partnership with Catalyst Housing Group, to date CalCHA has acquired over 2,000 market-rate units for converstion to rent-restricted middle-income housing, including two properties in the San Gabriel Valley totaling over 700 units. The California Statewide Communities Development Authority (“CSCDA”) is a Joint powers authority founded in 1988 and sponsored by the League of California Cities and the California State Association of Counties. CSCDA is comprised of more than 530 cities, counties, and special districts, including the City of Arcadia, which has been a member since 1996. CSCDA issues nonprofit bonds, traditional affordable housing bonds, infrastructure bonds, and other financing tools to its members. In 2018, CSCDA issued $251,770,000 in tax-exempt bonds for Methodist Hospital in Arcadia. The CSCDA Community Improvement Authority (“CSCDA CIA”) was formed in October 2020 as an affiliate Joint Powers Authority to the CSCDA focused specifically on middle-income housing preservation and development. It uses a similar model as CalCHA to acquire existing market-rate apartments through the issuance of tax-exempt bonds. Acquired units are then converted to rent-restricted middle-income apartment units. To date, CSCDA CIA has acquired seven properties totaling 2,151 housing units, including locally a 261-unit project in the City of Monrovia. Earlier this year, representatives of both CalCHA and CSCDA CIA contacted the City to introduce their organizations and propose that Arcadia join as an additional member of their JPAs. Becoming an additional member would give each Authority the ability to issue its own governmental purpose bonds to acquire existing market-rate multifamily rental housing in the City. Prior to the issuance of any bonds, the City would have the opportunity to review the proposed acquision and bond issuance, and in its sole discretion either approve or deny the project. The City is currently in the process of updating its General Plan Housing Element for the 2021-2029 planning period. For the 2021-2029 planning period, the City’s Regional Housing Needs Assessment (“RHNA”) indicates a total of 3,214 new housing units are needed in Arcadia. This consists of 1,102 very-low income units, 570 low income units, 605 moderate income units, and 937 above-moderate income units. As part of the Housing Element update, the City will need to develop a broad set of methods and programs that create housing across each of these affordability categories. Becoming Middle-Income Housing JPA’s May 18, 2021 Page 3 of 5 members of CalCHA and CSCDA CIA, and supporting their issuance of bonds to create rent-restricted housing units, is one method the City can utilize to assist in meeting its housing numbers. DISCUSSION As a governmental entity, both CalCHA and CSCDA-CIA are able to issue tax-exempt bonds and are granted a 100% property tax exemption for any property they acquire. This provides the financial capability to purchase multifamily rental housing at existing market-rate prices, and convert them to rent-restricted units, predominately for middle- income households earning between 80% and 120% of the Area Median Income (“AMI”). The table below shows the current AMI levels for Los Angeles County. Some projects also include units reseved for lower-income households earning less than 80% AMI. Acquired properties are managed through contractual agreement with a professional property management company. Total rent for each unit is capped at no more than 35% AMI with annual rent increases of no greater than 4%. Existing tenants in the acquired properties that meet the affordability requirements are given first priority to remain under the new leasing terms. Existing tenants that do not meet the affordability requirements are still able to remain at the property under their current market rate leasing agreement and terms until such time that they voluntarily choose to relocate. The income-based rent restrictions for the property remain in place for a 30 to 35 year time-period to match the length of the bond payment period. Prior to the issuance of any bonds for a specific property acquisition, the City would have the opportunity to review the proposed transaction and either approve or deny the acquisition and issuance of bonds by entering into, or not entering into, a Public Benefit Agreement for the property. Sample Public Benefit Agreements from CalCHA and from CSCDA CIA are included as Exhibit “B” of Resolution Nos. 7358 and 7359. Bonds issued by CalCHA or CSCDA CIA are payable solely out of the revenues and receipts derived from the project being financed. The City would not be a direct party to any real estate transaction or financial transaction, and any debts, liabilities, and obligations incurred by these organizations would not constitute debts, liabilities, or obligations for the City. At the end of the bond term, the City would have the option to acquire the property at no cost. The City would also have the option to purchase the property or force the sale of the property to another entity, anytime between year 15 and the end of the life of the bonds. If the City elects not to acquire the property at the end of the bond term, the Authority would maintain the right to sell the property at which time Household Size 1 2 3 4 5 6 Los Angeles County Area Median Income FY 2021-22 80% $44,800 $51,200 $57,600 $64,000 $69,100 $74,200 100% $56,000 $64,000 $72,000 $80,000 $86,400 $92,800 120% $67,200 $76,800 $86,400 $96,000 $103,650 $111,350 Middle-Income Housing JPA’s May 18, 2021 Page 4 of 5 all net sale proceeds would be granted to the City as unrestricted funds. The City would also receive any surplus cash flow from the property during the life of the bonds. Although it is unknown how many properties in the City, if any, would be acquired by CalCHA and CSCDA CIA through the issuance of tax-exempt bonds, becoming a member of each Joint Powers Authority would provide an additional method of creating affordable housing that is not dependent on direct local subsidy. Both CalCHA and CSCDA CIA have successfully acquired properties in other local cities, including Glendale and the Monrovia. Becoming members of each Authority would also be beneficial to the City’s ongoing Housing Element update and in meeting the City’s affordable housing requirements. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act ("CEQA") pursuant to Section 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines. FISCAL IMPACT The City would have no financial responsibility for any bonds issued or properties acquired by CalCHA or CSCDA CIA; however, properties acquired by the CalCHA or CSCDA CIA would be exempt from property taxes, resulting in a loss of property tax revenue to the City and other taxing agencies over the life of the bonds. In return, the City would accrue equity in the project and eventual ownership of the property. All net proceeds from a future sale of the property would go directly to the City as unrestricted funds. The City would also receive any surplus income generated by the property over the life of the bonds. Based on the project equity accrued and eventual sale proceeds returned to the City, it is anticipated that property acquisitions by CalCHA or CSCDA CIA would result in a substantial net positive fiscal impact to the City over the life of the bonds. As an example, the table below, based on transaction information provided by CalCHa and CSCDA CIA, shows the estimated fiscal impact to the City of Arcadia of a $30,000,000 property acquisition with a 35-year bond term: Year 1 Year 15 Year 35 Total City Property Tax Loss $28,900 $38,100 $56,600 $1,442,800 Asset Value $30,000,000 $45,378,000 $81,957,000 $81,957,000 * Property tax based on 9.6% share of 1% tax. Asset value assumes annual 3.0% appreciation and 2.0% inflation As shown in the example above, the City would forego annual property tax dollars during the life of the project. However, once the City acquires the property (or forces a sale of said property) the City would benefit from either full ownership of the asset or all proceeds from the sale which may significantly exceed the property tax uncollected. Middle-Income Housing JPA’s May 18, 2021 Page 5 of 5 RECOMMENDATION It is recommended that the City Council take the following actions: Adopt Resolution No. 7358 authorizing the City to become a member of the California Community Housing Agency (CALCHA) and authorizing the City Manager to enter into Public Benefit Agreements with CALCHA in support of their issuance of tax-exempt bonds to create or preserve middle-income rental housing in Arcadia; and determine that this action does not constitute a project and is, therefore, exempt under the California Environmental Quality Act (“CEQA”) Adopt Resolution No. 7359 authorizing the City to become a member of the California Statewide Communities Development Authority Community Improvement Authority (CSCDA CIA) and authorizing the City Manager to enter into Public Benefit Agreements with CSCDA CIA in support of their issuance of tax-exempt bonds to create or preserve middle-income rental housing in Arcadia; and determine that this action does not constitute a project and is, therefore, exempt under the California Environmental Quality Act (“CEQA”) Attachment A: Resolution No. 7358 Attachment B: Resolution No. 7359 Exhibit "A" IN WITNESS WHEREOF, the Additional Members hereto have caused this Agreement to be executed and attested by their proper officers thereunto duly authorized. Dated: _________________ Additional Member Name: By: Its: ATTEST: By: Its: [Signature Page to Joint Powers Agreement Relating to the California Community Housing Agency] 1 4161-9301-3290.2 RECORDING REQUESTED BY California Community Housing Agency WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, CA 94105 Attention: [●] PUBLIC BENEFIT AGREEMENT By and Between CALIFORNIA COMMUNITY HOUSING AGENCY and CITY OF [●] _________________________ Relating to CALIFORNIA COMMUNITY HOUSING AGENCY ESSENTIAL HOUSING REVENUE BONDS ([●]) Exhibit "B" 4161-9301-3290.2 PUBLIC BENEFIT AGREEMENT This PUBLIC BENEFIT AGREEMENT (“Agreement”), dated ________ 1, 2021 and effec- tive as of the Effective Date (as hereinafter defined), by and between the CALIFORNIA COM- MUNITY HOUSING AGENCY, a joint exercise of powers agency organized and existing under the laws of the state of California (including its successors and assigns, “Owner”), and the City of [●] (“Host”). BACKGROUND WHEREAS, Owner is a public entity organized pursuant to a joint exercise of powers agree- ment (the “Agreement”) among a number of California counties, cities and special districts, in- cluding Host, and is validly existing under the laws of the State of California, in particular, Title 1, Division 7, Chapter 5 of the California Government Code (the “Joint Exercise of Powers Act”); and WHEREAS, Owner and Host have determined that there is an undersupply of affordable housing for “middle-income” residents of Host and wish to provide for the public good and pro- mote the health and welfare of such residents by making dwelling units available to middle-income tenants according to income criteria to be established by Owner from time to time; and WHEREAS, pursuant to the Joint Exercise of Powers Act and the Agreement, Owner pro- poses to issue Bonds (as hereinafter defined) to finance Owner’s acquisition of the certain multi- family rental housing project (the “Project”) located at [●] in the City of [●], California, located on the real property site described in Exhibit A hereto; and WHEREAS, the Project will provide public benefit through the production, preservation and/or protection of below-market-rate rental housing, pursuant to a Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”) by and between Owner and Trustee (as hereinafter defined); and WHEREAS, Owner intends to make a contribution to Host by (a) paying or causing to be paid to Host all excess revenues derived from the Project after payment in full of related debt, taxes and other expenses, and (b) granting to Host an option (but under no circumstances an obli- gation) to purchase the Project or direct the sale of the Project and receive the net sale proceeds thereof, in each case as set forth herein. AGREEMENT In consideration of the mutual covenants herein contained, and such other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Owner and Host mu- tually agree as follows: Section 1. Definitions. Capitalized terms used in this Agreement shall have the mean- ings assigned to them in this Section 1; capitalized terms used in this Agreement and not defined in this Section 1 or elsewhere herein shall have the meanings assigned to them in the Indenture (herein defined). 2 4161-9301-3290.2 (a) “Appraised Value” – the value of the Optioned Property as determined by an in- dependent appraiser, selected by Owner, regularly engaged in making appraisals of property sim- ilar to the Optioned Property. (b) “Authority Indemnified Parties” – Owner and each of its officers, governing members, directors, officials, employees, attorneys, agents and members. (c) “Bonds” – bonds of the Owner issued to finance its acquisition of the Project and related transaction costs, bearing the designation “Essential Housing Revenue Bonds ([●]),” issued in one or more series or sub-series with such series and sub-series designations as may be set forth in the Indenture, including subordinate bonds which may be placed with Project Administrator, or an affiliate thereof, if applicable, and including bonds issued to refund the Bonds, if applicable. (d) “Bond Trustee” – Wilmington Trust, National Association or any successor trus- tee under the Indenture. (e) “Closing” – shall have the meaning set forth in Section 8 of this Agreement. (f) “Conveyance” – that transaction or series of transactions by which Owner shall transfer, bargain, sell and convey any and all right, title or interest in and to the Optioned Property. (g) “County” – the County of ([●]). (h) “Effective Date” – shall have the meaning set forth in Section 12 of this Agree- ment. (i) “Extraordinary Costs and Expenses” – shall have the meaning set forth in the Indenture. (j) “Fair Market Value” – the price, in no event less than the Purchase Option Price, a willing purchaser and a willing seller in an arm’s length transaction would agree upon as a fair sales price that could reasonably be expected to be received upon the sale of the Optioned Property, as determined by Owner pursuant to such means as Owner shall deem suitable for such purpose; provided that Owner’s determination of the manner of sale and Fair Market Value shall be final and incontestable. (k) “Indenture” – the Indenture of Trust between Owner, as issuer, and the Bond Trustee, as trustee, pursuant to which the Bonds are issued. (l) “Option” – has the meaning set forth in Section 2 of this Agreement. (m) “Option Term Commencement Date” – the date sixteen (16) years from the date of issuance of the Bonds. (n) “Option Term” – shall commence on the Option Term Commencement Date and, if not exercised, shall terminate at 11:59 p.m. local time on the date that is nineteen (19) years from the Option Term Commencement Date. 3 4161-9301-3290.2 (o) “Optioned Property” – means all of Owner’s right, title and interest (which in- cludes fee simple title to the real property) in and to all property and assets used in or otherwise related to the operation of the Project including, without limitation, all real property and interests in real property, all tangible and intangible personal property including furniture, fixtures, equip- ment, supplies, intellectual property, licenses, permits, approvals, and contractual rights of any kind or nature together with the right to own and carry on the business and operations of the Pro- ject. (p) “Outstanding” – with respect to Bonds, as of any given date, all Bonds which have been authenticated and delivered by Trustee under the Indenture, except: (i) Bonds cancelled at or prior to such date or delivered to or acquired by Trustee at or prior to such date for cancella- tion; (ii) Bonds deemed to be paid in accordance with Article VIII of the Indenture; and (iii) Bonds in lieu of which other Bonds have been authenticated under the Indenture. (q) “Project Administrator” – [●], a [●], and its successors and assigns. (r) “Project Administrator Sale” – a sale of the Optioned Property at its Appraised Value to Project Administrator in accordance with Section 6(c) of this Agreement. (s) “Project Debt” – any debt secured by the Project and incurred to finance or re- finance Owner’s acquisition of the Project and related transaction costs, including any portion of the Bonds and any bonds, notes or other indebtedness issued by Owner to refund the Bonds in whole or in part. (t) “Purchase Option Price” – the sum of the amounts set forth below: i. an amount sufficient to either prepay, redeem in whole or fully defease for redemption on the earliest call date all Project Debt; plus ii. any fees or other amounts not identified in clause (i) that may be necessary to effect the complete release from and discharge of any lien, mortgage or other en- cumbrance on the Optioned Property (the amounts in clauses (i) and (ii) being collec- tively referred to as the “Satisfied Indebtedness”); plus iii. any amounts due to Owner (including the Authority Indemnified Persons, as provided in the Indenture), the Bond Trustee or any predecessor or successor, or any other Person under any indenture, loan agreement, bond, note or other instrument re- lating to any Satisfied Indebtedness (including, without limitation, indemnification amounts, Owner’s Extraordinary Costs and Expenses, recurrent and extraordinary fees and expenses, and reimbursable costs and expenses of any kind or nature); plus iv. Transaction Costs; minus v. The amount of any Project Debt assumed by Host; and minus vi. Any funds held by or for Owner under the Indenture applied to the retire- ment of Project Debt, but, for avoidance of doubt, the Owner may retain amounts in 4 4161-9301-3290.2 the Extraordinary Expense Fund or similar funds under the Indenture it deems reason- able as a reserve against future costs and expenses of the type described in subpara- graph (iii) above, which amount shall be final and incontestable. (u) “Third-Party Sale” - a sale of the Optioned Property to a third-party purchaser at Fair Market Value. (v) “Transaction Costs” – to the extent not otherwise described herein, any costs or expenses of any kind or nature associated with or incurred by Owner and Host in connection with the consummation of the Conveyance, any refinancing of the Project or assumption of Project Debt regardless of whether such costs and expenses are customarily borne by the seller or purchaser in any such transaction, including but not limited to taxes, recording fees and other impositions, Owner’s and Host’s legal and other professional fees, fees for verification agents, bidding agents, escrow agents, custodians or trustees, assumption fees, prepayment fees, the cost of the appraisal (regardless of whether the Appraised Value is ultimately determined to be the Fair Market Value), surveys, inspections, title commitments, title insurance premiums and other title-related fees, and all amounts required for indemnification of Authority, Trustee and Project Administrator. Section 2. Economic Contribution. To provide a public benefit and economic contri- bution to Host as described in the Recitals to this Agreement, Owner hereby (a) agrees to pay or cause to be paid to Host the amounts held in the Excess Revenue Fund pursuant to Section 3 and the Indenture, and (b) grants to Host an option (the “Option”) with respect to the Optioned Prop- erty, as more fully described in Section 6 of this Agreement. Section 3. Excess Revenues. (a) Owner shall cause Trustee to create an account (the “Excess Revenue Fund”) under the Indenture into which surplus cash from the Project will be deposited following payment of all other obligations and expenses as required pursuant to the Indenture. Upon exercise of the Option as provided herein, Trustee shall transfer the balance of the Excess Revenue Fund to Host in connection with the Conveyance. (b) On the first date upon which no Bonds or other Project Debt remains Out- standing, which may be the date of the Conveyance, any and all moneys in the Excess Revenue Fund shall be transferred by Trustee to Host, to be applied by Host in its sole discretion. Thereaf- ter, for so long as Owner remains the owner of the Project and there is no Project Debt outstanding, Owner shall pay or cause to be paid to Host, all Project-related revenue in excess of Project-related expenses, to be applied by Host in its sole discretion. At Host’s written request and expense, Owner will appoint a third-party paying agent or trustee to handle payment of excess revenues to Host following retirement of all Bonds and all Project Debt. (c) Upon any Conveyance of the Project by Owner pursuant to the terms hereof, Owner shall apply the proceeds of the sale (i) to redeem the Bonds then Outstanding, (ii) to prepay, redeem in whole or fully defease any other Project Debt, and (iii) to pay any fees or other amounts listed in (iii) and (iv) of the Purchase Option Price definition. Any proceeds remaining following the foregoing payments shall be transferred to the Host. 5 4161-9301-3290.2 Section 4. Option Term. The Option shall become effective on the Option Term Com- mencement Date and may be exercised during the Option Term at Host’s sole discretion. Owner agrees that it will not enter into any agreement to sell all or any part of the Optioned Property during the Option Term, without the specific written request of Host and written consent of Owner, which consent shall not be unreasonably withheld, and, if Project Debt is outstanding, delivery of an Opinion of Bond Counsel to Owner substantially to the effect that such sale will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation. Upon the expiration of the Option Term, Owner shall use its best efforts to sell the Optioned Property at Fair Market Value. Following the expiration of the Option Term, Host shall not be precluded from purchasing all or any portion of the Optioned Property from Owner at a price and on the terms agreed upon by Host and Owner, but Owner shall not be pre- cluded from seeking or agreeing to sell, or consummating the sale of, all or any portion thereof to any third party. Section 5. Manner of Exercise of Option. (a) General. Within the Option Term and in compliance with and observance of all of the terms and conditions of this Agreement, Host may, in its sole discretion, exercise the Option by: i. Purchasing the Optioned Property upon payment of the Purchase Option Price; ii. Directing Owner to cause a Third-Party Sale; or iii. Directing Owner to cause a Project Administrator Sale. (b) Owner’s Notice. At least six (6) months prior to the Option Term Commencement Date, Owner shall provide Host notice of the Option Term Commencement Date; provided, how- ever, that failure to provide such notice shall not affect the sufficiency or validity of any proceed- ings taken in connection with the exercise of the Option. (c) Host’s Notice. To exercise the Option, Host shall provide Owner notice of its intent to exercise the Option at any time prior to the end of the Option Term. (d) Owner’s Response. Within fifteen (15) business days of its receipt of Host’s no- tice of intent to exercise the Option, Owner shall provide Host with a written estimate of the amounts comprising the Purchase Option Price. (e) Exercise Notice. Within fifteen (15) business days of its receipt of the esti- mated Purchase Option Price, Host shall provide Owner written notice either (i) that it is with- drawing its intent to exercise the Option, which will under no circumstances cause the Option Term to end, or (ii) that it intends to proceed with the exercise of the Option and specifying in accordance with subparagraph (a) above, whether Host elects to purchase the Optioned Property, cause a Third-Party Sale, or cause a Project Administrator Sale (an “Exercise Notice”). Section 6. Fixing of Option and Purchase Price; Contractual Obligation. 6 4161-9301-3290.2 (a) Purchase Option. If Host notifies Owner of its intent to purchase the Optioned Property in accordance with Section 5 hereof, Host shall deliver to Owner a purchase agreement therefor in form and substance satisfactory to Owner and its counsel subject to the terms and con- ditions of this Agreement. Unless Owner shall have objected to the form of purchase agreement within fifteen (15) business days of its receipt thereof, Owner shall be deemed to have accepted the terms of the purchase agreement without the need for the signature of Owner thereon, and Host shall be obligated to purchase and Owner shall be obligated to sell and convey to Host good and marketable title to the Optioned Property at the Purchase Option Price within ninety (90) days thereafter. Upon Closing, Host may apply amounts in the Excess Revenue Fund to the payment of the Purchase Option Price and thereafter shall apply such funds in its sole discretion. (b) Third-Party Sale. If Host notifies Owner of its request for a Third-Party Sale in accordance with Section 5 hereof, within fifteen (15) business days of Owner’s receipt of such Exercise Notice, Owner shall select an appraiser to provide the Appraised Value. Owner shall then market the Optioned Property at the Appraised Value and use its best efforts to negotiate, sell and convey good and marketable title to the Optioned Property at Fair Market Value. The Owner shall endeavor to sell the Optioned Property at Fair Market Value, by such means as it shall deter- mine to be suitable for such purpose; provided that Owner’s determination of the manner of sale shall be final and incontestable, and Owner shall incur no liability to any party as a result of or otherwise in connection with the sale or failure to sell. Nothing herein shall require or prevent Owner from selling the Optioned Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner. (c) Project Administrator Sale. If Host notifies Owner of its request for a Project Administrator Sale in accordance with Section 5 hereof, within fifteen (15) business days of Owner’s receipt of such Exercise Notice, Owner shall select an appraiser to provide the Appraised Value to Owner, Host and Project Administrator. If within fifteen (15) business days of receipt of the Appraised Value, Project Administrator agrees to purchase the Optioned Property at the Ap- praised Value, Owner shall cause Project Administrator to deliver to Owner a purchase agreement therefor in form and substance satisfactory to Owner and its counsel subject to the terms and con- ditions of this Agreement, and Owner shall be obligated to sell and convey to Project Administrator good and marketable title to the Optioned Property at the Appraised Value, but in no event less than the Purchase Option Price, within ninety (90) days thereafter. If Project Administrator fails to agree to purchase the Optioned Property, Host may rescind the Exercise Notice or direct Owner to proceed to close the sale under the terms of a Third-Party Sale. It shall be a condition of effec- tiveness to any Project Administrator Sale that the new owner (Project Administrator or its de- signee) shall enter into a new regulatory agreement and/or declaration of restrictive covenants, and cause the same to be recorded in the real property records of the County, providing for the contin- ued operation of the Project for a period of not less than fifteen (15) years, or such other term as Host may agree to in writing, as middle-income housing with occupancy and income restrictions on terms substantially similar to those contained in the Regulatory Agreement. Section 7. Terms of Conveyance of Optioned Property. (a) The Conveyance shall be in the nature of a grant deed in which Owner shall de- liver one or more deeds, bills of sale, or other instruments of transfer without recourse or warranty of any kind or nature. 7 4161-9301-3290.2 (b) The Optioned Property will be conveyed in AS IS CONDITION, WITH ALL FAULTS, and without representations or warranties of any kind or nature as to the condition of the Optioned Property. (c) In the event of a Conveyance to the Host, Host acknowledges that Owner will convey the Optioned Property AS IS and that OWNER IS MAKING NO WARRANTIES AND REPRESENTATIONS, EXPRESS OR IMPLIED, with reference to the condition of the Optioned Property. HOST WAIVES ANY AND ALL CLAIMS AGAINST OWNER, INCLUDING BUT NOT LIMITED TO, CLAIMS BASED IN PART, INCLUDING, BUT NOT LIMITED TO, NEG- LIGENCE, STRICT LIABILITY AND STRICT RESPONSIBILITY, IN CONTRACT, IN WAR- RANTY, IN EQUITY, OR UNDER ANY STATUTE, LAW OR REGULATION ARISING DI- RECTLY OR INDIRECTLY OUT OF ANY CONDITION OF THE OPTIONED PROPERTY. (d) There shall be no partial transfer and that, upon consummation of the Convey- ance, Owner shall be fully divested of any and all right, title or interest in and to the Optioned Property. (e) Upon payment of the Purchase Option Price, as adjusted for any prorations, cred- its and charges, Owner shall convey title to the Optioned Property by quit claim deed reasonably satisfactory in form and substance to Host. Section 8. Closing of Conveyance of Optioned Property. The closing of the Convey- ance to the Host (“Closing”) shall take place not later than the ninetieth (90th) calendar day fol- lowing the date on which Owner and Host agree on the terms of the purchase agreement pursuant to Section 6(a) hereof at such time within normal business hours and at such place as may be designated by Host. (a) Prorations. All general and special real property taxes and assessments, and rents shall be prorated as of the Closing, with Host responsible for all such items to the extent arising or due at any time following the closing. General real property taxes shall be prorated at the time of Closing based on the net general real property taxes for the year of Closing. (b) Limitation. If, after taking into account all adjustments and prorations, the net amount due Owner at Closing is less than the Purchase Option Price, it is fully understood and agreed that in no event shall Owner receive proceeds less than the amount necessary to fully retire or defease the Bonds and otherwise satisfy all of the payments constituting the components of the Purchase Option Price and the prorations in Section 8(a). (c) Possession. Physical possession of the Optioned Property shall be delivered to Host at the time of Closing. Section 9. Optioned Property: Title Insurance, Title Defects. (a) Within fifteen (15) business days after it receives an Exercise Notice specifying Host’s intent to purchase the Optioned Property, Owner shall provide Host with a title commitment (the “Title Commitment”) in the customary ALTA form of Standard Owner’s Policy of Title In- surance in Host’s favor, for the amount equivalent to the Purchase Option Price (whichever is 8 4161-9301-3290.2 applicable), with a commitment to insure good and marketable fee simple title to the Optioned Property in Host, issued by a title insurance company licensed to do business in the State of Cali- fornia and acceptable to Host (the “Title Company”). The policy shall show the status of title to the Optioned Property and show all exceptions, including easements, restrictions, rights-of-way, covenants, reservations, and other conditions of record, if any, affecting the subject real estate. Accompanying the Title Commitment, Owner shall also have Title Company furnish Host with true, correct, complete, and legible copies of all documents affecting title to the subject real estate. The cost and expense of such Standard Owner’s Title Commitment shall be payable as a Transac- tion Cost. Host shall pay the additional premium due if Host elects to obtain an extended coverage policy of title insurance and/or extended coverage endorsements. Owner shall cooperate with Host, at no expense to Owner, by providing an affidavit to Title Company to induce Title Company to issue to Host at Closing a “GAP” endorsement to the Title Commitment showing the effective date of the Title Commitment to be the time and date of Closing. (b) If the Title Commitment shows exceptions to title which are unacceptable to Host, Host shall, within ten (10) business days after receipt of the Title Commitment and not later than twenty (20) business days before the date for Closing, notify Owner of such fact and Owner shall have twenty (20) business days after Owner receives Host’s written objections to cure such defects and to present a Title Commitment on the basis of which Closing may occur or to notify Host that Owner will not cure same. If Owner cannot or will not cure such defects within such twenty (20) business day period and thereafter convey title to the Optioned Property as required in this Agree- ment, then Host shall have the right (at Host’s option) to either: (i) Rescind the Exercise Notice and Owner may proceed to close the sale under the terms of a Third-Party Sale, if there is a third-party offer; or (ii) Accept whatever title Owner can or will convey, without reduction in the purchase price because of such title defects. Any exceptions to title disclosed on the Title Commitment to which Host does not timely object to in writing or to which Host objects but thereafter accepts by Closing shall be included as a “Permitted Exception.” Section 10. Assignment of Option. Host shall not assign the Option without the prior written consent of Owner, which consent shall not be unreasonably withheld, and delivery of an Opinion of Bond Counsel to Owner substantially to the effect that such assignment will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation. Notwithstanding the foregoing, neither party to this Agreement shall as- sign its interests, obligations, rights and/or responsibilities under this Agreement without the prior written consent of the other party. Section 11. Recording of Agreement. This Agreement, and any amendment thereto, shall be recorded with the recorder’s office of the County. Host shall cooperate with Owner to remove any such recorded Agreement or amendment thereto from title to the Optioned Property upon Owner’s reasonable request therefor and, in any event, by no later than the earliest of (i) a Conveyance or (ii) the expiration of the Option Term. In the event that, within said time, Host fails to so cooperate and provide its original signature to a termination of such recorded Agreement or amendment thereto, then Host hereby irrevocably constitutes and appoints Owner as Host’s true 9 4161-9301-3290.2 and lawful attorney (and agent-in-fact) strictly for the purpose of executing in Host’s name any such termination. Section 12. Conditions Precedent; Effective Date. Effectiveness of this Agreement shall be conditioned upon satisfaction of each of the following conditions: (a) Issuance of the Bonds; (b) Purchase of the Optioned Property by Owner as evidenced by a grant deed or comparable instrument; and (c) Recording in the real property records of the County of this Agreement and the Regulatory Agreement. The first date upon which each of the above conditions is satisfied shall be the effective date of this Agreement (the “Effective Date”). Section 13. No Individual Liability. (a) The Owner shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any con- ceivable theory, under or by reason of or in connection with this Agreement or any sale or Con- veyance or failure or price thereof or application of proceeds thereof, except only as to moneys available therefor under and in accordance with the Indenture and this Agreement. (b) No Authority Indemnified Person shall be individually or personally liable for the payment of any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Agreement, or by any proceedings for the determina- tion of the Purchase Option Price, or Host’s exercise or waiver of same, or otherwise except in the case of such Authority Indemnified Person’s own willful misconduct. Section 14. Notices, Governing Law, Binding Effect and Other Miscellaneous Provi- sions. (a) Notices. All notices provided for in this Agreement shall be in writing and shall be given to Owner or Host at the address set forth below or at such other address as they individually may specify thereafter by written notice in accordance herewith: If to Owner: California Community Housing Agency 1400 W. Lacey Blvd., Building 1 Hanford, California 93230 Attention: Michael LaPierre With a copy to: [●] If to Host: City of [●] 10 4161-9301-3290.2 Such notices shall be deemed effective upon actual delivery or upon the date that any such delivery was attempted and acceptance thereof was refused, or if mailed, certified return receipt requested, postage prepaid, properly addressed, three (3) days after posting. (b) Consents and Approvals. All consents and approvals and waivers required or asserted hereunder shall be in writing, signed by the party from whom such consent, approval, waiver or notice is requested, provided that no written consent or approval of Owner shall be re- quired for any action that Host may, in its reasonable good faith judgment, find it necessary to take in the event of an emergency. (c) Cooperation. Owner will keep Host advised of its complete name at all times, including any change of such name. Host will keep Owner advised of its complete name at all times, including any change of such name. Unless the parties otherwise agree, Owner shall cooperate with Host and provide Host with all information and records in its possession, and access to counsel and other professionals, to assist Host in determining and updating the Purchase Option Price. On the first date that Project Debt is not Outstanding, and Owner remains the owner of the Project, Owner shall promptly notify Host of the Purchase Option Price. (d) Maintenance of Membership. In order to preserve the Project’s exemption from property tax, Host agrees to remain a member of the Owner joint powers authority so long as any Bonds remain outstanding. (e) Pronouns. Where appropriate to the context, words of one gender include all genders, and the singular includes the plural and vice versa. (f) Amendments. This Agreement may not be modified except in a written in- strument signed by Host and Owner. (g) Complete Agreement. This Agreement together with all schedules and ex- hibits attached hereto and made part thereof supersedes all previous agreements, understandings and representations made by or between the parties hereto. (h) Governing Law. This Agreement shall be governed by and construed in ac- cordance with the laws of the State of California, without regard to conflicts of law principles. All claims of whatever character arising out of this Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between Owner and any other party hereto, if and to the extent that such claim potentially could or actually does involve Owner, shall be brought in any state or federal court of competent jurisdiction located in Kings County, California. By executing and delivering this Agreement, each party hereto irrev- ocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such courts; (ii) waives any defense of forum non-conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by Owner of any prior notice or procedural require- ments applicable to actions or claims against or involving governmental units and/or political sub- divisions of the State of California that may exist at the time of and in connection with such matter. 11 4161-9301-3290.2 (i) Subordination. This Agreement shall be subordinate to any claim, pledge or interest in the Optioned Property securing the Bonds or any Project Debt. (j) Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid provision shall be deemed severable, and shall not affect the validity or enforceability of any other provisions of this Agreement, all of which shall remain fully enforceable. (k) Term. This Agreement shall terminate upon the earliest of a (i) Conveyance or (ii) the expiration of the Option Term in accordance with this Agreement. (l) Captions. The captions used in this Agreement are solely for convenience and shall not be deemed to constitute a part of the substance of the Agreement for purpose of its construction. [SIGNATURE PAGE TO FOLLOW] 12 4161-9301-3290.2 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above. CALIFORNIA COMMUNITY HOUSING AGENCY By: ________________ CITY OF [●] By: ________________________________ Signature Page to Public Benefit Agreement 13 4161-9301-3290.2 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, , (insert name and title of the officer) 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) 4161-9301-3290.2 EXHIBIT A LEGAL DESCRIPTION OF REAL PROPERTY Exhibit "A" OHSUSA:757692504.2 [SIGNATURE PAGE FOR JPA AGREEMENT] IN WITNESS WHEREOF, the [NAME OF CITY] has caused this Agreement to be executed and attested by its duly authorized representatives as of the ___ day of _____________, 20__. Additional Member: [NAME OF CITY] By Name: Title: ATTEST: __________________________________ Clerk OHS Draft 1/15/20 4134-7659-4982.5 RECORDING REQUESTED BY CSCDA Community Improvement Authority WHEN RECORDED RETURN TO: Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, CA 94105 Attention: Steffi Chan THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE PUBLIC BENEFIT AGREEMENT By and Between CSCDA COMMUNITY IMPROVEMENT AUTHORITY and [CITY] _________________________ Dated as of [Date] _________________________ Relating to CSCDA COMMUNITY IMPROVEMENT AUTHORITY ESSENTIAL HOUSING REVENUE BONDS, SERIES 20__[A] ([PROJECT NAME]) [and CSCDA COMMUNITY IMPROVEMENT AUTHORITY SUBORDINATE ESSENTIAL HOUSING REVENUE BONDS, SERIES 20__[B] ([PROJECT NAME])] Exhibit "B" 4134-7659-4982.5 PUBLIC BENEFIT AGREEMENT This PUBLIC BENEFIT AGREEMENT (“Agreement ”) is dated as of [Date] by and between the CSCDA COMMUNITY IMPROVEMENT AUTHORITY a joint exercise of powers agency organized and existing under the laws of the State of California (including its successors and assigns, “Owner”) and the [CITY] (“Host”). BACKGROUND WHEREAS, Owner proposes to issue Bonds (as hereinafter defined) to finance Owner’s acquisition of the certain multifamily rental housing project (the “Project”) located at [Address], located on the real property site described in Exhibit A hereto; and WHEREAS, Owner intends to sell the Project at the instigation of the Host or upon the retirement of all Project Debt (as defined herein) pursuant to this Agreement. AGREEMENT In consideration of the mutual covenants herein contained, and such other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Owner and Host mutually agree as follows: Section 1. Right to Cause Sale. Host shall have the right to cause (“Sale Right”) Owner to sell the Property (as herein defined) upon payment by the purchaser thereof (the “Purchaser”) of the Sale Price (as herein provided) within the Sale Right Term (as herein defined) and in compliance with and observance of all of the terms and conditions of this Agreement. Section 2. Definitions. Capitalized terms used in this Agreement shall have the meanings assigned to them in this Section 2; capitalized terms used in this Agreement and not defined in this Section 2 or elsewhere herein shall have the meanings assigned to them in the Indenture (herein defined). (a) “Bonds” – collectively, (i) the CSCDA Community Improvement Authority Essential Housing Revenue Bonds, Series 20__[A] ([Project Name]) (the “Series [A] Bonds”), [and (ii) the CSCDA Community Improvement Authority Subordinate Essential Housing Revenue Bonds, Series 20__[B] ([Project Name]) (the “Series [B] Bonds”)], with such other series and sub- series designations as may be set forth in the Indenture, originally issued to finance Owner’s acquisition of the Project and related transaction costs. (b) “Bond Trustee” – [Trustee] or any successor trustee under the Indenture. (c) “Closing” – shall have the meaning set forth in Section 8 hereof. (d) “Conveyance” – that transaction or series of transactions by which Owner shall transfer, bargain, sell and convey any and all right, title or interest in and to the Property. (e) “Extraordinary Costs and Expenses” – shall have the meaning set forth in the Indenture. 4134-7659-4982.5 (f) “Indenture” – the Indenture of Trust between Owner, as issuer, and Bond Trustee, as trustee, pursuant to which the Bonds were issued. (g) “Minimum Sale Price” – means the lowest price at which the Property may be sold, as described in Section 4(c) hereof. (h) “Outstanding” – with respect to Bonds, as of any given date, all Bonds which have been authenticated and delivered by the Trustee under the Indenture, except: (i) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (ii) Bonds deemed to be paid in accordance with Article VIII of the Indenture; and (iii) Bonds in lieu of which other Bonds have been authenticated under the Indenture. (i) “Owner Indemnified Person” – Owner and each of its officers, governing members, directors, officials, employees, attorneys, agents and members. (j) “Project Administrator” – [____________________] and its successors and assigns. (k) “Project Debt” – any debt secured by the Project and incurred to finance or refinance Owner’s acquisition of the Project and related transaction costs, including any portion of the Bonds and any bonds, notes or other indebtedness issued by Owner to improve the Project or to refund the Bonds in whole or in part. (l) “Property” – means all of Owner’s right, title and interest (which includes fee simple title to the real property) in and to all property and assets used in or otherwise related to the operation of the Project including, without limitation, all real property and interests in real property, all tangible and intangible personal property including furniture, fixtures, equipment, supplies, intellectual property, licenses, permits, approvals, and contractual rights of any kind or nature together with the right to own and carry on the business and operations of the Project. (m) “Regulatory Agreement” – means the Regulatory Agreement and Declaration of Restrictive Covenants by and between Owner and Bond Trustee, relating to the Bonds. (n) “Sale Price” – purchase price of the Property to be paid by the Purchaser upon sale of the Property by Owner pursuant to Host’s Sale Right in compliance with Section 4 hereof or sale by Owner pursuant to Section 5 hereof. (o) “Sale Right” – means the right of Host to cause Owner to sell the Property pursuant to Section 1 hereof. (p) “Sale Right Exercise Date” – the date fifteen (15) years from the issuance of the Bonds. (q) “Sale Right Term” – shall commence on the Sale Right Exercise Date and, if not exercised, shall terminate on the date on which no Project Debt remains Outstanding. (r) “Transaction Costs” – to the extent not otherwise described herein, any costs or expenses of any kind or nature associated with or incurred by Owner and/or Bond Trustee in 4134-7659-4982.5 connection with the consummation of the Conveyance, regardless of whether such costs and expenses are customarily borne by the seller or purchaser in any such transaction, including but not limted to taxes, recording fees and other impositions, Owner’s and Bond Trustee’s legal and other professional fees, fees for verification agents, bidding agents, escrow agents, custiodians or trustees, assumption fees, prepayment fees, the cost of the appraisal, brokers’ fees and expenses, surveys, inspections, title commitments, title insurance premiums and other title-related fees, and all amounts required for indemnification of Owner, Bond Trustee and Project Administrator. Section 3. Effectiveness; Term and Termination. The Sale Right shall become effective on the Sale Right Exercise Date and may be exercised during the Sale Right Term. Owner agrees that it will not enter into any agreement to sell all or any part of the Property during the Sale Right Term other than as may be required by the Indenture (e.g., in the event of default), without the specific written request of the Host and delivery of an Opinion of Bond Counsel to Bond Trustee substantially to the effect that such sale will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation. Section 4. Manner of Exercise. (a) Host’s Notice. To exercise the Sale Right, Host shall provide a notice (an “Exercise Notice”) to Owner (with a copy to the Project Administrator) at any time during the Sale Right Term. (b) Owner’s Best Efforts to Sell. Unless Host notifies Owner in writing that it is withdrawing its Exercise Notice within fifteen (15) business days of delivering the Exercise Notice under Section 4(a) hereof, Owner shall exercise its best efforts in selling and conveying good and marketable title to the Property within ninety (90) days following receipt of the Exercise Notice, or as soon as possible thereafter, but only if it can sell at or above the Minimum Sale Price. The obligation of Owner to sell and convey the Property shall be on a best efforts basis. Owner shall endeavor to sell the Property at a commercially reasonable price, subject to subsection (c) of this Section, by such means as it shall determine to be suitable for such purpose; provided that Owner’s determination of the manner of sale and Sale Price shall be final and incontestable, and Owner shall incur no liability to any party as a result of or otherwise in connection with the sale or failure to sell. Subject to subsection (c), nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host. Owner shall direct the Bond Trustee in the foregoing as and to the extent necessary or appropriate. (c) Sale Price. The Sale Price shall be at least equal to the sum of the amounts set forth below (net of any adjustments or prorations of the type described in Section 8(b)) (the “Minimum Sale Price”): i. an amount sufficient to either prepay, redeem in whole or fully defease for redemption on the earliest call date all Project Debt; plus ii. any fees or other amounts not identified in clause (i) that may be necessary to effect the complete release from and discharge of any lien, mortgage or other encumbrance on the Property; plus 4134-7659-4982.5 iii. any amounts due to Owner (including Owner Indemnified Persons, as provided in the Indenture), the Bond Trustee or any predecessor or successor, or any other Person under any indenture, loan agreement, bond, note or other instrument relating to any Project Debt (including, without limitation, indemnification amounts, Owner’s Extraordinary Costs and Expenses, recurrent and extraordinary fees and expenses, and reimbursable costs and expenses of any kind or nature); plus iv. Transaction Costs; minus v. Any funds held by or for Owner under the Indenture applied to the retirement of Project Debt. Owner may retain such portion of moneys in the Extraordinary Expense or similar fund under the Indenture it deems reasonable or a reserve against future expected costs and expenses of the type described in subparagraph (iii). Owner’s determination of this amount shall be final and incontestable. Section 5. Mandatory Conveyance. Upon the retirement of all Project Debt, Owner shall use its best efforts to effect a Conveyance within ninety (90) days thereafter, subject to Section 4(c) hereof. Nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host. Section 6. Surplus Cash; Surplus Conveyance Proceeds. Upon a Conveyance of the Property, Owner shall apply the proceeds of such Conveyance (i) to redeem the Bonds then Outstanding, (ii) to prepay, redeem in whole or fully defease any other Project Debt, and (iii) to pay any fees or other amounts listed in Section 4(c)(ii) – (iv). Any proceeds remaining following the foregoing payments (such remaining amounts hereinafter referred to as “Surplus Conveyance Proceeds”) shall be transferred to Host and Host shall share such Surplus Conveyance Proceeds with other taxing agencies selected by Host, and in the amounts determined by Host in its sole discretion and responsibility. Section 7. Terms of Conveyance. (a) The Conveyance shall be in the nature of a grant deed to Purchaser in which Owner shall deliver one or more deeds, bills of sale, or other instruments of transfer without recourse or warranty of any kind or nature. (b) The Property will be conveyed to Purchaser in AS IS CONDITION, WITH ALL FAULTS, and without representations or warranties of any kind or nature as to the condition of the Property. (c) There shall be no partial transfer and that, upon consummation of the Conveyance, Owner shall be fully divested of any and all right, title or interest in and to the Property. Section 8. Closing. 4134-7659-4982.5 (a) The closing of the Conveyance (“Closing”) shall take place, in the case of a Conveyance pursuant to Section 4 hereof, not later than the ninetieth (90th) calendar day following Owner’s receipt of the Exercise Notice, or as soon as possible thereafter, and in the case of a mandatory conveyance pursuant to Section 5 hereof, not later than the ninetieth (90th) calendar day following the retirement of all Project Debt, or as soon as possible thereafter. (b) Prorations. All general and special real property taxes and assessments, and rents shall be prorated as of the Closing, with Purchaser responsible for all such items to the extent arising or due at any time following the closing. General real property taxes shall be prorated at the time of Closing based on the net general real property taxes for the year of Closing. Section 9. Recording. This Agreement, and any amendment thereto, shall be recorded with the recorder’s office of the County; provided, that upon termination of the term of this Agreement, Host shall cooperate with Owner to remove any such recorded Agreement or amendment thereto from title to the Property upon Owner’s reasonable request therefor and, in any event, by no later than thirty (30) days after the expiration of the original term of this Agreement. In the event that, within said time, Host fails to so cooperate and provide its original signature to a termination of such recorded Agreement or amendment thereto, then Host hereby irrevocably constitutes and appoints Owner as Host’s true and lawful attorney (and agent-in-fact) to execute in Host’s name any such termination. Section 10. Subordination. This Agreement shall be subordinate to any claim, pledge or interest in the Property securing the Bonds or any Project Debt. Section 11. Maintenance of Membership. In order to preserve the Property’s exemption from property tax, Host agrees to remain a member of Owner joint powers authority so long as any Bonds remain outstanding. Section 12. Assignment. Neither party to this Agreement shall assign its interests, obligations, rights and/or responsibilities under this Agreement without the prior written consent of the other party. Section 13. Limitation on Liability. (a) Owner shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Agreement or any sale or Conveyance or failure or price thereof or application of proceeds thereof, except only as to moneys available therefor under and in accordance with the Indenture or this Agreement. (b) No Owner Indemnified Person shall be individually or personally liable for the payment of any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Agreement, or by any proceedings for the sale or Conveyance or failure or price thereof, or Host’s exercise or waiver of same, or otherwise except in the case of such Owner Indemnified Person’s own willful misconduct. 4134-7659-4982.5 Section 14. Notices, Governing Law, Binding Effect and Other Miscellaneous Provisions. (a) Notices. All notices provided for in this Agreement shall be in writing and shall be given to Owner or Host at the address set forth below or at such other address as they individually may specify thereafter by written notice in accordance herewith: If to Owner: CSCDA Community Improvement Authority 1100 K Street, Suite 101 Sacramento, California 95814 Attention: Chair With a copy to: [Project Administrator] [Project Administrator Address] Attention: [Project Administrator Contact] If to Host: [City] [City Address] Attention: [City Contact] Such notices shall be deemed effective upon actual delivery or upon the date that any such delivery was attempted and acceptance thereof was refused, or if mailed, certified return receipt requested, postage prepaid, properly addressed, three (3) days after posting. (b) Consents and Approvals. All consents and approvals and waivers required or asserted hereunder shall be in writing, signed by the party from whom such consent, approval, waiver or notice is requested. (c) Non-liability of Host or Owner Officers and Employees. No officer or employee of the Host shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by Host of any obligation of the terms of this Agreement. No officer or employee of the Owner shall be personally liable to Host, or any successor in interest, in the event of any default or breach by Owner of any obligation of the terms of this Agreement. (d) Pronouns. Where appropriate to the context, words of one gender include all genders, and the singular includes the plural and vice versa. (e) Amendments. This Agreement may not be modified except in a written instrument signed by Host and Owner. 4134-7659-4982.5 (f) Complete Agreement; Benefits. This Agreement together with all schedules and exhibits attached hereto and made part thereof supersedes all previous agreements, understandings and representations made by or between the parties hereto. This Agreement shall inure solely and exclusively to the benefit of the Owner and Host, and no other party shall have any right, remedy or claim under or by reason of this Agreement. (g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of law principles. All claims of whatever character arising out of this Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between Owner and any other party hereto, if and to the extent that such claim potentially could or actually does involve Owner, shall be filed and maintained in the Superior Court of California, County of Sacramento, California. By executing and delivering this Agreement, each party hereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such court; (ii) waives any defense of forum non-conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by Owner of any prior notice or procedural requirements applicable to actions or claims against or involving governmental units and/or political subdivisions of the State of California that may exist at the time of and in connection with such matter. (h) Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid provision shall be deemed severable, and shall not affect the validity or enforceability of any other provisions of this Agreement, all of which shall remain fully enforceable. (i) Term. This Agreement shall terminate upon the Conveyance. (j) Captions. The captions used in this Agreement are solely for convenience, and shall not be deemed to constitute a part of the substance of the Agreement for purpose of its construction. (k) Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Agreement. [SIGNATURE PAGE TO FOLLOW] 4134-7659-4982.5 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above. CSCDA COMMUNITY IMPROVEMENT AUTHORITY By: Authorized Signatory [CITY] By: [Name] [Title] Signature Page to Public Benefit Agreement 4134-7659-4982.5 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, , (insert name and title of the officer) 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) 4134-7659-4982.5 EXHIBIT A LEGAL DESCRIPTION OF REAL PROPERTY The Land referred to herein is situated in the State of California, County of [County], [City], and described as follows: