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HomeMy WebLinkAboutC-1928TITLE(S) : 0 This page is part of your document - DO NOT DISCARD 'A 'A F tF�ff-Ff CODE 20 03 2010683 RECORDER'S OFFICE LOS ANGELES COUNTY CALIFORNIA JUL 15 2003 AT 8 A.M. 111111111111111111111111111 L E A D S H E E T CODE 19 CODE 9 Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. THIS FORM NOT TO BE DUPLICATED pril D.T.T Number of Parcels Shown pril C V i e 03 2010683 RECORDER'S OFFICE LOS ANGELES COUNTY CALIFORNIA JUL 15 2003 AT 8 A.M. 111111111111111111111111111 L E A D S H E E T CODE 19 CODE 9 Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. THIS FORM NOT TO BE DUPLICATED pril D.T.T Number of Parcels Shown pril RECORDED BY: F.'RST AMERICAN TITLE INSURANCE COMPANY National Commercial Services WHEN RECORDED MAIL TO: THE ARCADIA REDEVELOPMENT AGENCY 240 WEST HUNTINGTON DRIVE POST OFFICE BOX 60021 ARCADIA, CALIFORNIA 91006 -6021 ATTN: EXECUTIVE DIRECTOR APN I SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE HERITAGE PARK OWNER PARTICIPATION AGREEMENT / LOAN AGREEMENT 21542 -21 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Arcadia Redevelopment Agency 240 West Huntington Drive Post Office Box 60021 Arcadia, California 91006 -6021 Attn: Executive Director £ 4 �a 2's [Fee Exempt -Govt Code Section 6103] (Space above for Recorders Use) HERITAGE PARK OWNER PARTICIPATION AGREEMENT/ LOAN AGREEMENT between THE ARC'ADIA REDEVELOPMENT AGENCY a public body, corporate and politic and ARCADIA HERITAGE PARK, L.P. a California limited partnership [Dated as of January 21, 2003, for reference purposes only] 03 2010683 RVPUB \KCV\646177 ARTICLE 1. DEFINITIONS; EFFECTIVE DATE; PARTIES. 1.1 Definitions. The initially capitalized terms and words used in this Agreement shall have the following meanings: 1.1.1 "Affordable Rent" means the monthly rent charged to a Qualifying Household of a Unit which shall be no greater than that allowed as an "affordable rent" by California Health & Safety Code Section 50053, as amended or substituted, for the Qualifying Household. 1.1.2 "Agency" means the Arcadia Redevelopment Agency, a public body, corporate and politic, and any nominee, assignee of, or successor to its rights, powers and responsibilities. 1.1.3 "Agency Loan" means the loan, in the principal amount not to exceed One Million Eight Hundred Thousand Dollars ($1,800,000), to be disbursed by the Agency to the Owner, subject to the terms and conditions of this Agreement, for the payment of Owner's actual costs incurred in completing the Project. The source of funds for the Agency Loan shall be the Agency's low- and moderate- income housing fund ( "Housing Fund "). Pursuant to the provisions of CRL Section 33334.3, such funds as must be set aside by the Agency for the purposes of increasing and improving the supply of low- and moderate- income housing. 1.1.4 "Agreement" means this Owner Participation Agreement /Loan Agreement. 1.1.5 "City" means the City of Arcadia, a California municipal corporation, and any nominee, assignee of, or successor to its rights, powers and responsibilities. 1.1.6 "CRL" or "Community Redevelopment Law" means the California Community Redevelopment Law, California Health & Safety Code Section 33000, et seq., as it may be amended from time to time. 1.1.7 "Deed of Trust" means a third recorded priority position deed of trust in favor of the Agency, in substantially the form attached as Exhibit E, securing the Owner's obligations under the Promissory Note and Regulatory Agreement. 1.1.8 "Effective Date" shall have the meaning set forth in Section 1.2 hereof. 1.1.9 "Event of Default" shall have the meaning set forth is Section 5.1 hereof. 1.1.10 "Loan Documents" mean the following documents evidencing the Agency Loan and required as consideration for the Agency to make the Agency Loan: (i) the Promissory Note, (ii) the Deed of Trust, and (iii) the Regulatory Agreement. 1.1.11 "HUD" means the United States Department of Housing and Urban Development. 2010683 RVPUB\KCV\646177 -1- 1.1.12 "Median Income" means the median income adjusted by the actual household size of the Qualified Household to occupy a Unit, as published annually by HUD for the County of Los Angeles, which Median Income levels shall be adjusted in the future concurrently with publication of adjustment of the same by HUD. 1.1.13 "Owner" means Arcadia Heritage Park, L.P., a California limited partnership for which, (i) ASL Arcadia, Inc. a California corporation and an affiliate American Senior Living, Inc., a California corporation, and (ii) Heritage Community Housing Inc., a California non - profit corporation, are the general partners and any permitted nominee, assignee of, or successor to its rights, powers and responsibilities. 1.1.14 "Project" means the construction of an affordable housing project on the Property for Qualified Households. The Project shall contain a total of at least fifty -four (54) Units, and fifty -three (53) of those Units shall be affordable to Qualified Households at Affordable Rents for a period of not less than fifty five (55) years, as further proscribed in the Regulatory Agreement. 1.1.15 "Project Area" means the Agency's Central Redevelopment Project Area as it may from time to time hereafter be amended. The Project Area is located in the City and its boundaries are specifically described in the Redevelopment Plan. 1.1.16 "Project Budget" means the schedule of sources and uses of funds pursuant to which the Project is to be completed as set forth in the attached Exhibit H. 1.1.17 "Project Costs" means the total cost of completing the Project and funding certain reserves, consistent with the Project Budget and this Agreement. 1.1.18 "Promissory Note" means the instrument entitled "Residual Receipts Promissory Note" evidencing the Owner's obligation to repay the Agency Loan in substantially the form attached as Exhibit D. 1.1.19 "Property" means that certain real property generally located at 150 West Las Tunas Drive in the City. The Property is legally described on the attached Exhibit A -1 and depicted on the Site Map attached as Exhibit A -2. The Owner is presently in a conditional escrow to acquire fee title to the Property. 1.1.20 "Qualified Households" means individuals or families meeting all of the following criteria: (i) At least one of the residents in the household is sixty -two (62) years of age or older; (ii) Every member of the household who is not sixty two (62) years of age or older as described in (i) above shall be a "Qualified Permanent Resident" or a "Permitted Health Care Resident," as defined by California Civil Code Section 51.3(c)(2) and (6), respectively; 03 20:10683 RVPUB\KCV\646177 -2- P (iii) The household qualifies as either persons or families of low or very low income, as provided by California Health & Safety Code Section 50105, as those sections may be amended and/or substituted from time to time; and (iv) At the commencement of the occupancy of a Unit, the maximum allowable household income was either (i) equal to (or less than) fifty percent (50 %) of Median Income based on the actual number of individuals in the household, or (ii) equal to (or less than) sixty percent (60 %) of Median Income based on the actual number of individuals in the household. 1.1.21 "Redevelopment Plan" means the redevelopment plan for the Project Area as adopted by the City Council pursuant to CRL, as it may have been, or may be from time to time hereafter, amended. 1.1.22 "Regulatory Agreement" means the instrument entitled "Regulatory Agreement and Declaration of Restrictive Covenants," substantially in the form attached as Exhibit G. 1.1.23 "Schedule of Performance" means the schedule of required actions to be undertaken by the Owner to complete the Project as set forth in Exhibit C attached hereto. 1.1.24 "Scope of Development" means the description of required actions to be undertaken by the Owner to complete the Project as set forth in Exhibit B attached hereto. 1.1.25 "Units" mean the fifty four (54) individual residences in the Project. "Unit" means one of the Units. 1.2 Effective Date of Agreement. This Agreement is dated January 21, 2003 for reference purposes only. This Agreement will not become effective until the date ( "Effective Date ") on which all of the following are true: (i) This Agreement has been approved and executed by the appropriate authorities of the Owner and delivered to the Agency; (ii) Following all legally required notices and hearings, this Agreement has been approved by the Agency's governing board and the City Council (acting as the Agency's legislative body) and delivered to the Owner; and (iii) This Agreement has been executed by the appropriate authorities of the Agency and delivered to the Owner. If this Agreement has been approved by the Owner and delivered to the Agency as provided in (i) above, but the Agency fails to approve or deliver this Agreement as described in (ii) and (iii) above by February, 4, 2003, then this Agreement shall not become effective and anyprior signatures and approvals of the Parties will be deemed void and of no force or effect. This Agreement may be recorded by the Agency against the Property at any time following the Effective Date. RVPUB\KCV\646177 -3- 03 2010683 f 1.3 Parties to Agreement. 1.3.1 The Agency. The Agency is THE ARCADIA REDEVELOPMENT AGENCY, a public body, corporate and politic, and any nominee, assignee of or successor to its rights, powers and responsibilities. The address of the Agency is 240 West Huntington Drive, Arcadia, California 91006 -6021, Attention: Executive Director; telephone (626) 574 -5414; facsimile (626) 447 -3309; with copies to Best Best & Krieger LLP, 3750 University Avenue, Suite 400, Riverside, California 92501, Attention: Arcadia Redevelopment Agency Counsel; facsimile (909) 686 -3083. knowledge: Agency represents and warrants to the Owner that, to the Agency's actual current (i) The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under CRL; (ii) The Agency has taken all actions required by law to approve the execution of this Agreement; (iii) The Agency's entry into this Agreement and the performance of the Agency's obligations under this Agreement do not violate any contract, agreement or other legal obligation of the Agency; (iv) The Agency's entry into this Agreement and the performance of the Agency's obligations under this Agreement do not constitute a violation of any state or federal statute or judicial decision to which the Agency is subject; (v) There are no pending lawsuits or other actions or proceedings which would prevent or impair the timely performance of the Agency's obligations under this Agreement; (vi) The Agency has the legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Agreement has been duly authorized and no other action by the Agency is requisite to the valid and binding execution, delivery and performance of this Agreement, except as otherwise expressly set forth herein; and (vii) The individual executing this Agreement is authorized to execute this Agreement on behalf of the Agency. The representations and warranties set forth above are material consideration to the Owner and the Agency acknowledges that the Owner is relying upon the representations set forth above in undertaking the Owner's obligations set forth in this Agreement. The term "Agency's actual current knowledge" means, and is limited to, the actual current knowledge of the Agency's Executive Director as of the date of the making of the representation or warranty, without having undertaken any independent inquiry or investigation for the purpose of making such representation or warranty and without any duty of inquiry or investigation. 03 2010683 RVPUB\ICCV\646177 -4- " All of the terms, covenants and conditions of this Agreement shall be binding on and shall inure to the benefit of the Agency and its nominees, successors and assigns. 1.3.2 The Owner. The Owner is ARCADIA HERITAGE PARK L.P., a California limited partnership for which (i) ASL Arcadia, Inc. a California corporation and an affiliate American Senior Living, Inc., a California corporation, and (ii) Heritage Community Housing Inc., a California non - profit corporation, are the general partners. The address of the Owner for purposes of this Agreement is 1740 East Garry Avenue, Suite 105, Santa Ana, California 92705, Attention: Roger Davila; telephone (949) 224 -1800; facsimile (949) 224 -1805; with copies to Arter & Hadden LLP, 5 Park Plaza, Suite 1000, Irvine, California 92614 -8528, Attention: Bruce Holden; telephone (949) 252 -3102; facsimile (949) 833 -9604. knowledge: The Owner represents and warrants to the Agency that, to the Owner's actual current (i) The Owner is a duly formed California limited partnership in good standing and lawfully entitled to do business in the State of California; (ii) The individuals executing this Agreement are authorized to execute this Agreement on behalf of the Owner; (iii) The Owner has taken all actions required by law to approve the execution of this Agreement; (iv) The Owner's entry into this Agreement and the performance of the Owner's obligations under this Agreement do not violate any contract, agreement or other legal obligation of the Owner; (v) The Owner's entry into this Agreement and the performance of the Owner's obligations under this Agreement do not constitute a violation of any state or federal statute or judicial decision to which the Owner is subject; (vi) There are no pending lawsuits or other actions or proceedings which would prevent or impair the timely performance of the Owner's obligations under this Agreement; and (vii) The Owner has the legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Agreement have been duly authorized and no other action by the Owner is requisite to the valid and binding execution, delivery and performance of this Agreement, except as otherwise expressly set forth herein. The representations and warranties set forth herein are material consideration to the Agency and the Owner acknowledges that the Agency is relying upon the representations set forth above in undertaking the Agency's obligations set forth above. The term "Owner's actual current knowledge" means, and is limited to, the actual current knowledge of Roger Davila, as of the date of the making of the representation or warranty without having undertaken any independent inquiry or ®3 2010683 RVPUB\KCV\646177 -5- �7 r15� - investigation for the purpose of making such representation or warranty and without any duty of inquiry or investigation. All of the terms, covenants and conditions of this Agreement shall be binding on and shall inure to the benefit of the Owner and its permitted nominees, successors and assigns. Wherever the term "Owner" is used herein or therein, such term shall include any permitted nominee, assignee or successor of the Owner. The qualifications and identity of the Owner are of particular concern to the Agency, and it is because of such qualifications and identity that the Agency has entered into this Agreement with the Owner. No voluntary or involuntary successor -in- interest of the Owner shall acquire any rights or powers under this Agreement except as expressly set forth herein. The Owner may not assign or transfer all or any part of this Agreement or the Property without the prior written approval of the Agency, which may be given or withheld as provided in Sections 4.12. 1.3.3 The Agency and the Owner are sometimes referred to individually as "Party" and collectively as "Parties" herein. ARTICLE 2. RECITALS ABOUT THE REDEVELOPMENT PLAN AND PROJECT. 2.1 The Redevelopment Plan and Project Area. The Agency is a duly constituted redevelopment agency under the laws of the State of California and is engaged in activities necessary to carry out and implement the Redevelopment Plan for the Project Area. This Agreement is subject to the provisions of the Redevelopment Plan as it now exists and as it maybe subsequently amended; the Redevelopment Plan is incorporated by this reference. 2.2 The Property and the Project. The Owner is presently in a conditional escrow to acquire the Property and has expressed an interest in participating in the redevelopment of the Project Area by completing the Project on the Property. The Owner has submitted to the Agency a redevelopment proposal for the Project and estimates the costs of undertaking the completion of the Project to be Eight Million Seven Hundred Twenty Thousand Dollars ($8,720,000). The Owner is requesting the Agency's assistance with the undertaking the completion of the Project in the form of an interest bearing loan. The Owner desires to enter into an Owner Participation Agreement / Loan Agreement with the Agency pursuant to which the Owner would carry out construction of the Proj ect and satisfy certain covenants and conditions set forth therein, and the Agency would provide financial assistance to the Owner for a portion of the actual costs of completing the Project in the form of a secured loan to the Owner for an amount not to exceed One Million Eight Hundred Thousand Dollars ($1,800,000). 2.3 Purpose of this Agreement. This Agreement and the Exhibits attached hereto implement the Redevelopment Plan for the Project Area and by providing the Agency Loan to the Owner to assist the completion of the Project. The provision of the Agency Loan to the Owner, and the covenants and benefits to be received by the Agency in return, are in the best interest of the City RVPUB\KCV\646177 -6- 7l15l(Z and Agency and the health, safety, morals and welfare of its taxpayers and residents and is in accordance with public purposes set forth in the CRL and federal, state and local law and regulations. Implementation of this Agreement will further the goals and objectives of the Redevelopment Plan and the City's General Plan Housing Element by expanding the supply of affordable housing in the City, strengthening the City's land use and social structure and by alleviating economic and physical blight within the Project Area. ARTICLE 3. PROJECT FINANCING; AGENCY ASSISTANCE. 3.1 Project Budget. The total Project Costs are set forth in the Project Budget, which is attached hereto as Exhibit H. The Project Budget shall be subject to change from time to time, subject to prior written approval by the Agency. The Agency shall not unreasonably withhold approval if- (i) the combined amount of all sources of funds available remains sufficient to pay all anticipated Project Costs; (ii) the proposed amendment to the Project Budget does not materially and adversely affect the Developer's ability to complete the acquisition and development of the Property pursuant to this Agreement as determined by the Agency in its reasonably exercised discretion; and (iii) the Developer promptly provides written notice of any such proposed amendment to the Agency. 3.2 Sources of Funding. 3.2.1 CSCDA Bond Proceeds. The Owner intends to obtain funds from the issuance of certain bonds by the California Statewide Communities Development Authority ( "CSCDA Bonds ") to partially finance the Project. The Owner agrees that it shall use its best efforts to promptly submit its application for the CSCDA Bonds and shall take all actions necessary to achieve receipt of the CSCDA Bonds for the Project within the time set forth in the Schedule of Performance. The Parties' obligations under this Agreement are expressly contingent upon the issuance of the CSCDA Bonds on or before December 31, 2003. The net proceeds of the CSCDA Bonds shall be no less than Two Million Four Hundred Forty Thousand Dollars ($2,440,000) and no more than Seven Million Dollars ($7,000,000). 3.2.2 HOME Funds. The Owner intends to obtain funds from the HOME Investment Partnership Program ( "HOME Funds ") to partially finance the Project. The Owner agrees that it shall use its best efforts to promptly submit its application for the HOME Funds and shall take all actions necessary to achieve receipt of the HOME Funds for the Project within the time set forth in the Schedule of Performance. The Parties' obligations under this Agreement are expressly contingent upon the Owner's receipt of the HOME Funds on or before December 31, 2003. The amount of the HOME Funds shall be no less One Million Three Hundred Thousand Dollars ($1,300,000) and no more than One Million Eight Hundred Thousand Dollars ($1,800,000). 3.2.3 Tax Credits. To provide additional funds for the construction of the Project, the Owner shall obtain equity financing by taking such actions as shall be necessary to obtain an allocation of four percent (4 %) tax credits ( "Tax Credits ") and to obtain capital contributions from limited partners to be admitted into the Owner. The Owner expects that the sale of Tax Credits will provide approximately Two Million Three Hundred Thirty Seven Thousand Dollars ($2,337,000) in proceeds to be expended on the Project. The Parties' obligations under this Agreement are expressly RVPUB\I{CV\646177 —7— 03 2010683 ; a. contingent upon the Owner's receipt of the Tax Credits on or before December 31, 2003. The Agency shall have the right to review and approve any tax credit regulatory agreement. 3.2.4 Agency Loan. Subject to the satisfaction of the conditions precedent set forth in Section 3.4, the Agency hereby agrees to loan to Owner an amount not to exceed the sum of One Million Eight Hundred Thousand Dollars ($1,800,000) ( "Agency Loan "), subject to the terms and conditions set forth in this Agreement and the Loan Documents. The Agency Loan shall be evidenced by the Promissory Note and secured by the Deed of Trust. 3.3 Disbursement of Agency Loan. Upon satisfaction of the conditions precedent to the disbursement of the Agency Loan as set forth in Section 3.4, the Agency shall disburse the Agency Loan to the Owner three (3) payments as provided in the Schedule of Performance. The Agency Loan shall reimburse the Owner only for the costs attributable to the completion of the Project in accordance with the Schedule of Performance. 3.4 Conditions Precedent to Disbursement of Agency Loan. Each disbursement of the Agency Loan shall be subject to the satisfaction of all of the conditions precedent set forth in this Section 3.4, as determined in the reasonable discretion of the Agency's Executive Director, or his or her designee. 3.4.1 Execution and Delivery of Documents. The Owner shall have executed (in recordable form, as necessary) and delivered to the Agency this Agreement and the Loan Documents. 3.4.2 Title to Property. The Owner shall have good and marketable fee title to the Property, and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than (i) liens for current real property taxes and assessments not yet due and payable, and (ii) deeds of trust, mortgages or other encumbrances approved by the Agency. Title in conformance with this Section 3.4.2 shall be evidenced by the Owner providing the Agency, at the Owner's sole cost and expense, a lender's policy of title insurance issued by a title company mutually agreeable to the Parties. 3.4.3 Insurance. The Owner shall obtain such insurance and provide to the Agency the endorsements required by Section 4.11. 3.4.4 Recordation. This Agreement, the Deed of Trust and the Regulatory Agreement shall be recorded against the Property. 3.4.5 Permits and Approvals. The Owner shall have obtained any and all permits and approvals required by the City or other governmental agencies for undertaking and operating the Proj ect. 3.4.6 No Default. The Owner shall be in compliance with all of the terms, covenants, and conditions set forth in this Agreement and there shall exist no condition, event or act which would constitute an Event of Default hereunder or which, upon the giving of notice or the passage of time, or both, would constitute an Event of Default. RVPUB\KCV\646177 -8- 03 2010683 a "15103 i 3.4.7 Representations and Warranties. All representations and warranties of the Owner contained in this Agreement shall be true and correct as of the date of the disbursement of the Agency Loan. 3.4.8 Tax Credits Agreement. The Owner shall have entered into an agreement for the sale of the Tax Credits. 3.5 Repayment of Agency Loan. Owner shall repay the Agency Loan in accordance with the Loan Documents. 3.6 Housing Fund. The Agency's obligation to disburse the Agency Loan shall be forgiven, discharged and excused upon a mandate by the State of California that requires the Agency to pay to the State from the Agency's Housing Fund monies that would otherwise be paid to the Owner pursuant to this Agreement. The Parties hereby acknowledge that this Agreement is made expressly contingent upon the availability of funds in the Agency's Housing Fund. The Parties acknowledge that the Governor of the State has previously issued a proposal calling for the State budget to be balanced by, among other things, appropriating redevelopment agency affordable housing funds that are unencumbered as of December 1, 2002 to the State General Fund. The Parties hereby agree that if the Agency's Housing Fund monies are appropriated by the State or the State takes any other action with regard to redevelopment funding, and such appropriation or action causes the Agency to be unable to meet its Agency Loan obligations, as determined by the Agency, in its sole and absolute discretion, the Agency may terminate this Agreement, without further cost, liability or obligation. ARTICLE 4. DEVELOPMENT OF THE PROJECT ON THE PROPERTY. 4.1. Obligations Regarding Scope of Development; Schedule of Performance. The Owner shall perform its obligations with respect to the Project in accordance with this Agreement, including, without implied limitation, the Scope of Development and Schedule of Performance attached as Exhibit B and Exhibit C, respectively, and any additional plans provided by the Owner and approved by the Agency and the City pursuant to this Agreement. 4.2 Preparation of Concept and Site Plans and Related Documents. Within the time set forth in the Schedule of Performance, the Owner shall prepare and submit to the Agency concept and site plans and related documents for the Project, for the Agency's review pursuant to Section 4.3 of this Agreement. The concept and site plans and related documents shall be consistent with the Scope of Development. The Agency's staff and the Owner shall hold regular progress meetings to coordinate the preparation and submission of the concept and site plans and related documents. The Agency's staff and the Owner shall communicate and consult informally as frequently as is necessary to assure that the formal submittal of any documents to the City receives prompt consideration. RVPUB\ICCV\646177 -9- 03 2010683 7/151(13 ,v F 4.3 Agency Approval of Concept Design Drawings. The Agency shall have the right of ` review and approval of all plans, drawings and related documents (collectively "Plans ") for the Project, including any proposed changes thereto. The Agency shall review and reasonably approve or disapprove such Plans and any proposed changes thereto within twenty (20) business days of its receipt of the Plans. Any disapproval shall state in writing the reasons for disapproval and the changes requested by the Agency to be made. The Agency shall approve the Plans provided that the Plans conform to this Agreement. The Owner, upon receipt of a disapproval, shall revise such plans, drawings and related documents and shall submit them to the Agency within twenty (20) business days after receipt of notice of disapproval. The Agency shall use reasonable good faith efforts to expedite the City's processing and review of the Owner's plans, in a manner consistent with statute, the City's Municipal Code and this Agreement. The Agency shall approve or disapprove the Plans within twenty (20) business days from the date of their submission to the Agency. Failure by the Agency to either approve or disapprove within the time established in this Section 4.3 shall be deemed an approval. The foregoing notwithstanding, no matter shall be deemed approved unless the request for approval conforms with Section 6.6. Any changes to the Plans required by the Agency shall not operate to extend the time for performance of the Owner's obligations hereunder, unless such changes are necessary due to the Agency- initiated deviations from the Scope of Development. The Agency and the Owner shall confer in good faith regarding appropriate time extensions for the Agency- initiated changes. 4.4 Agency's Right to Approve Contractor. Owner shall obtain written approvals of the Agency of the general contractor responsible for the construction of the Project. In determining whether to give the approvals, the Agency shall evaluate: (i) the fitness and experience of the proposed contractor to construct the Project; (ii) a list of references and referrals for past projects; (iii) whether the contractor has all licenses, permits, qualifications and approvals of whatever nature legally required to work in the contractor's profession; and (iv) the proposed contractor's ability to construct the Project in a manner acceptable to the Agency. The Agency's approval of the general contractor is for internal purposes only and by doing so, the Agency is not passing judgment on the fitness of the contract or the quality of work performed by such contractor nor may the Owner rely on the Agency's approvals for such. Neither the Owner nor any person or entity not a signatory to this Agreement shall have any rights or causes of action against any party to this Agreement as a result of any Agency approval hereunder. 4.5 Governmental Requirements. If any governmental official, agency, department or bureau having jurisdiction over the Project or the Property (including, without implied limitation, the City) requires material revisions or corrections of the Agency - approved concept and site plans, the Owner and the Agency shall cooperate in efforts to obtain waivers of such requirements or to develop a mutually acceptable set of alternative concept and site plans. With the exception of Section 4.6 below, the Owner shall, at its own expense, secure or cause to be secured, any and all permits, entitlements, or other approvals which may be required by or from the City or any other governmental agency with jurisdiction over the Projector the Property. The Agency shall provide reasonable good faith efforts to expedite the City's processing of permits and approvals, in a manner consistent with statute, the City's Municipal Code and this Agreement. The Owner shall carry out RVPUB\KCV\646177 -10- the construction of the Project in conformity with all applicable laws, including all applicable federal and state labor and safety standards. 4.6 Cost of Proj ect. The Owner shall complete, or cause the completion of the Project at the Owner's sole cost and expense. Notwithstanding the foregoing, the proceeds of the Agency Loan may be used in accordance with Section 3.1 hereof to reimburse the Owner for the actual costs incurred by the Owner to complete the Project. 4.7 Schedule of Performance. The Owner shall begin and complete all Project construction within the times specified in the Schedule of Performance or such reasonable extension of said dates as may be granted by the Agency. In addition to extensions of time provided by express provisions of this Agreement, the Schedule of Performance may be revised from time to time as mutually agreed upon in writing between the Owner and the Agency. From time to time, during the period of Project construction and as reasonably requested by the Agency, the Owner shall report to the Agency on the progress of Project construction. The reports shall be in such form and detail as may reasonably be required by the Agency and shall include construction photographs taken since the last report. 4.8 Grading, Paving and Landscaping Plans.. The Owner shall prepare and submit to the City for its approval, preliminary and final, grading, paving and landscaping plans for the Project. These plans shall be prepared, submitted and approved by the City Engineer prior to the start of construction. The grading plans shall be prepared by a registered civil engineer. Owner shall complete installation of landscaping for the Project on the Property prior to the issuance of a certificate of occupancy. The landscaping plan, including plant materials and types, shall be subject to the City's reasonable approval in accordance with applicable City ordinances and regulations. 4.9 Right of Access. For the purpose of assuring compliance with this Agreement, representatives of the Agency and the City shall have reasonable right of access to the Property without charge, during business hours. The Agency and the City will use good faith efforts to minimize any interference that their entry may have upon the Owner's operations. The Agency and City shall indemnify, defend, and hold harmless the Owner and Owner's officers, members, employees, and agents from any damage caused or liability arising out of the exercise of this right of access, to the extent such liability and damage are proximately caused by the Agency, the City or their employees, agents or contractors. 4.10 Indemnity. The Owner shall defend, indemnify and hold the Agency and the City, and their officers, directors, agents, servants, attorneys, employees and contractors harmless from and against all liability, loss, damage, costs, or expenses (including reasonable attorneys' fees and court costs) (all of the foregoing collectively, "Liabilities ") arising from or as a result of the death of any person or any accidental injury, loss or damage whatsoever caused to any person or to the property of any person and which shall be, or alleged to be, directly or indirectly, caused by any acts done thereon or any errors or omissions of the Owner or its officers, directors, agents, servants, attorneys, employees or contractors in connection with the Project. The Owner shall not be responsible for (and such indemnity shall not apply to) any acts, errors or omissions directly or 03 2010683 RVPUB\KCV\646177 -11- 111? indirectly caused by the Agency or the City, or their respective officers, directors, agents, servants, attorneys, employees or contractors. The Agency and the City shall not be responsible for any acts, errors or omissions of any person or entity except the Agency and the City and their respective officers, agents, servants, employees or contractors. The Owner's obligations under this Section 4.10 shall survive the expiration or termination of this Agreement. 4.11 Insurance. Prior to the Agency's first disbursement of the Agency Loan, the Owner shall furnish or cause to be furnished to the Agency duplicate originals and appropriate endorsements to the Owner's commercial general liability and automobile insurance policies in the amounts set forth below, naming the Agency and the City as additional or co- insureds: (a) $1,000,000 for any one person; and (b) $3,000,000 for any one occurrence; and (c) $1,000,000 for any property damage. The policies shall be "occurrence," not "claims made," policies and shall be primary and non- contributing to any insurance that the Agency may elect to obtain. Such policies shall contain a full waiver of subrogation clause. The policies shall be issued by a carrier licensed to do business in California, with a then - current Best's rating of A: VIII or better. Said policies shall provide that they shall not be canceled or reduced in types of coverage or amount of coverage without at least thirty (30) business days' prior written notice to the Agency and that such reduction or cancellation shall become effective until at least twenty (20) business days after receipt by the Agency of the written notice thereof. The policy amounts set forth above shall not limit or define the extent of the Owner's indemnity liability pursuant to Section 4.10 or any otherprovision of this Agreement, or arising as a matter of law or at equity. The Owner shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Project carries workers' compensation insurance as required by law. The Owner shall also maintain, or cause its contractor to maintain, all -risk course of construction insurance, insuring the Owner, the Agency and the City against all risk (including earthquakes) of loss or damage to the Project. The obligations set forth in this Section 4.11 shall remain in effect until a Certificate of Completion has been issued for the Project. 4.12 Prohibition Against Transfer. Prior to the issuance of a Certificate of Completion, the Owner may not assign or attempt to assign this Agreement or any right or obligation herein, or make any total or partial sale, transfer, lease, conveyance or assignment of the Project or Property, or any portion thereof, without prior written approval of the Agency, which may be given or withheld in the Agency's reasonable discretion. In determining whether to approve of such a partial sale, transfer, conveyance or assignment of the Project or the Property, or any portion thereof, the Agency RVPUB\ICCV\646177 -12- 03 2010683 7115 ' shall evaluate: (i) the financial ability of the proposed transferee to own and operate the Project, or portion so transferred, and to meet the Owner's obligations under this Agreement; and (ii) the fitness and experience of the proposed transferee to own and operate the Project or portion so transferred. No unpermitted sale, transfer, conveyance or assignment of this Agreement or all or any portion of the Project or the Property shall be deemed to relieve the Owner or any other party from any obligation under this Agreement, nor shall any such unpermitted sale, transfer, conveyance or assignment transfer any rights in this Agreement, the Project or the Property. 4.13 Permitted Encumbrances. The Owner shall not, at anytime prior to the recordation of a Certificate of Completion, grant or permit any mortgage, deed of trust, sale and leaseback or any other form of conveyance or encumbrance in connection with the financing or development of the Property ( "Lien ") other than a Permitted Encumbrance, as hereinafter defined. For purposes hereof, a "Permitted Encumbrance" is any Lien which secures financing: (i) provided to Owner by a nationally or state chartered bank or any finance subsidiary thereof, an insurance company (or affiliate thereof) rated at least B+ XH by A.M. Best; (ii) providing sufficient funds to permit the completion of the Project; (iii) collateralized by the Property; (iv) with respect to which the Agency receives written notice prior to the recordation of any documentation recording such Lien; (v) with respect to which the lender agrees to give the Agency written notice, concurrently with notice to the Owner, of any default under any of the financing documents pertaining to such Lien and the right to cure such default within any cure period afforded Owner by such lender or by law; and (vi) with respect to which the lender provides the Agency the right to purchase the lender's interest upon payment of all sums owed by the Owner to such lender under the financing documents, which right may not expire any sooner than three (3) business days prior to sale of the Property pursuant to power of sale or judgment in foreclosure. Nothing in this Agreement shall be deemed to obligate the holder of any Permitted Encumbrance to construct the Project or to guarantee such completion. Nothing in this Agreement shall be deemed to permit or authorize any such holder to develop the Property or construct the Project thereon except in strict compliance with this Agreement. Any right, title and interest in the Project or the Property, or any portion thereof, acquired by any means by any holder of a Lien, or by such holder's assignees or successors, shall be subject to the terms and provisions of this Agreement and the Exhibits attached hereto. 4.14 Certificate of Completion. Upon the Owner's completion of the Project as evidenced by the City's issuance of a final certificate of occupancy, the Agency shall furnish to the Owner, within thirty (30) business days following Owner's written request, a Certificate of Completion upon written request to the Agency, substantially in the form set forth in the attached Exhibit F. The Certificate of Completion shall be a conclusive determination of satisfactory completion of the Project under this Agreement. The Certificate of Completion will not constitute: (i) evidence of compliance with or satisfaction of any obligation of the Owner to any party other than Agency; (ii) evidence of compliance with or satisfaction of any obligation of the Owner to any holder of a mortgage or any insurer of a mortgage; or (iii) a notice of completion as referred to in California Civil Code Section 3093. 03 2010683 RVPUB\KCV\646177 -13- I 4.15 Covenants, Conditions and Restrictions. In consideration of the terms of this Agreement, including the provision of the Agency Loan in accordance with Section 3.2.4 hereof, the Owner agrees for itself, and its successors and assigns to comply with all the covenants, conditions and restrictions set forth in this Section 4.15 and the Regulatory Agreement in connection with the use, operation and maintenance of the Project and the Property. 4.15.1 Nondiscrimination Covenant. The Owner covenants and agrees for itself, its successors, its assigns and every successor in interest to the Project and the Property or any part thereof, that in perpetuity, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Project and the Property, nor shall the Owner itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Project and the Property. The Owner shall, in perpetuity, refrain from restricting the rental, sale or lease of the Project and the Property on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 4.15.1.1 In Deeds. "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or- segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 4.15.1.2 In Leases. "The lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." 4.15.1.3 In Contracts. "There shall be no discrimination against or segregation of anyperson or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or RVPUB\KCV\646177 -14- 03 2010683 !�; enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land." 4.15.2 Use Covenant. As more specifically provided in the Regulatory Agreement, the Owner covenants and agrees for itself, its assigns and all voluntary and involuntary successors in interest to the Property or any part thereof, that Owner shall, for the term set forth in the Regulatory Agreement, use fifty -three (53) Units of the Project solely and exclusively to provide housing for Qualified Households as Affordable Rents. The Owner further agrees that the Property shall, in perpetuity, be put to no use other than those uses specified in the City's General Plan and zoning ordinances as the same may be amended from time to time. Nothing in this Section 4.15.2 shall limit, expand, modify or otherwise affect any right of the Owner to continue any legal nonconforming use upon the Property following changes in the City's General Plan or zoning ordinances. 4.15.3 Enforcement of Covenants. The covenants set forth in Sections 4.15.1 and 4.15.2 touch and concern the Property, and every part thereof, and constitute covenants and equitable servitudes running with the Property and every part thereof, which may be enforced by the Agency or the City (as an intended third party beneficiary), regardless of whether the Agency or the City currently or continue to own an interest in any property within the Project Area. The Owner irrevocably stipulates and agrees that breach of any of the covenants set forth in Sections 4.15.1 and 4.15.2 will result in great and irreparable damage to the Agency and the City, will violate the public policy and the purposes of the CRL, and will result in damages to the Agency and the City which are either impracticable or extremely difficult to quantify. Accordingly, upon the breach of any covenant set forth in Sections 4.15.1 and 4.15.2 the Agency may institute an action for mandatory or prohibitive injunctive relief against such breach. 4.16 Relocation Costs and Benefits. Owner and Agency acknowledge that, under federal, state and local law, certain individuals and/or businesses may be entitled to receive relocation assistance and other compensation (including, but not limited to, moving expenses, rental expenses, replacement payments and loss of good will payments) or other relocation compensation, benefits and reimbursements (collectively, "Relocation Costs and Benefits ") from the Agency in connection with the development of the Project. In consideration of the terms of this Agreement, including the provision of the Agency Loan in accordance with Section 3.2.4 hereof, the Owner agrees for itself, and its successors and assigns to contract with and pay for a professional relocation consultant ( "Relocation Consultant ") to determine and process all Relocation Costs and Benefits arising out of the development of the Project. The Owner further agrees to pay for any and all Relocation Costs and Benefits as determined by: (i) the Relocation Consultant and approved by the Agency pursuant to this Section 4.16; and/or (ii) a court of law. 4.16.1 Agency Approval of Relocation Consultant. Owner shall obtain the Agency's written approval of the Relocation Consultant responsible for determining and processing the Relocation Costs and Benefits for the Project. In determining whether to give the approval, the 03 ` 010683 RVPUB\KCV\646177 -15- krN 5110 Agency shall evaluate: (i) the fitness and experience of the proposed Relocation Consultant; (ii) a list of references and referrals for past relocation projects; (iii) whether the Relocation Consultant has all licenses and qualifications of whatever nature legally required to work in the Relocation Consultant's profession; and (iv) the proposed Relocation Consultant's ability to determine and process the Relocation Costs and Benefits in a manner acceptable to the Agency. The Agency's approval of the Relocation Consultant is for internal purposes only and by doing so, the Agency is not passing judgment on the quality of work performed by such Relocation Consultant nor may the Owner rely on the Agency's approvals for such. Neither the Owner nor any person or entity not a signatory to this Agreement shall have any rights or causes of action against any party to this Agreement as a result of any Agency approval hereunder. The Agency and Owner acknowledge and agree that the Relocation Consultant is the sole and exclusive contractor of the Owner and that the Relocation Consultant is not a contractor or employee of the Agency. The Owner shall pay all wages, salaries and other amounts due to the Relocation Consultant in connection with their performance under this Agreement as required by law. 4.16.2 Determination and Processing of Relocation Costs and Benefits. Within the time set forth in the Schedule of Performance, the Owner shall submit to the Agency a determination of the Relocation Costs and Benefits prepared by the Relocation Consultant for the Agency's review pursuant to Section 4.16.3 of this Agreement. The Relocation Costs and Benefits determination shall be consistent with federal, state and local law, including the Agency's Rules and Regulations for the Implementation of the California Relocation Assistance Law and Real Property Acquisition Guidelines ( "Relocation Guidelines "). 4.16.3 Agency Approval of Relocation Costs and Benefits Determination. The Agency shall have the right of review and approval of the Relocation Costs and Benefits determination. The Agency shall review and reasonably approve or disapprove such determination of Relocation Costs and Benefits within twenty (20) business days of its receipt of such determination. Any disapproval shall state in writing the reasons for disapproval and the changes requested by the Agency to be made. The Owner, upon receipt of a disapproval, shall revise the determination of Relocation Costs and Benefits and shall submit it to the Agency within twenty (20) business days after receipt of notice of disapproval. The Agency shall approve or disapprove the determination of Relocation Costs and Benefits within twenty (20) business days from the date of its submission to the Agency. Failure by the Agency to either approve or disapprove within the time established in this Section 4.16.3 shall be deemed an approval. The foregoing notwithstanding, no matter shall be deemed approved unless the request for approval conforms with Section 6.6. 4.17 Prevailing Wages. The Owner is aware of the requirements of the Prevailing Wage Laws, as defined in Section 3.4.9, which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects and the Owner agrees to fully comply with such Prevailing Wage Laws. The Owner shall defend, indemnify and hold the Agency and the City, its elected officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. RVPUB\ICCV\646177 -16- 03 2010683 f *y 7/��/A� |�/uv omPoamCvN46177 -l7- �� ARTICLE 5. DAMAGES AND REMEDIES. 5.1 Event of Default. Each of the following shall constitute an "Event of Default" under this Agreement: 5.1.1 Failure by a Party to comply with and observe any of the conditions, terms, or covenants set forth in this Agreement or the Loan Documents and failure to cure (or commence to cure, if applicable) as provided herein or as set forth in the Loan Documents. 5.1.2 Any representation or warranty contained in this Agreement or in any application, financial statement, invoice, certificate, or report submitted by one to the other Party that proves to have been intentionally incorrect in any material respect when made. 5.2 Rights and Remedies Not Exclusive. Unless prohibited by law or otherwise provided by a specific term of this Agreement, the rights and remedies of the Agency and the Owner under this Agreement are nonexclusive, and all remedies hereunder maybe exercised individually or cumulatively. In addition to those remedies expressly granted herein, the Parties shall also have the right to seek all other available legal and equitable remedies, including, without implied limitation, general and consequential damages, unless otherwise expressly provided to the contrary herein. 5.3 Notice and Opportunity to Cure. If either Party to this Agreement believes that the other Party has failed to perform any obligation of that Party in accordance with the terms of this Agreement ( "Default "), the Party alleging the Default shall provide written notice ( "Default Notice ") to the other Party, setting forth the nature of the alleged Default. Unless otherwise provided by a specific term of this Agreement or the Loan Documents, the Party claimed to be in Default shall have ten (10) business days after its receipt of the Default Notice to completely cure such Default or, if such Default cannot reasonably be cured within such ten (10) business day period, to commence the cure of such Default within the ten (10) business day period and diligently prosecute the cure to completion thereafter. If the Party alleged to be in Default fails to cure, or to commence to cure (if applicable), as provided in the preceding paragraph, the Party alleging the Default may exercise such rights and remedies as provided for in this Agreement or the Loan Documents upon an Event of Default. 5.4 Termination. In addition to all other rights and remedies granted to the Parties under this Agreement and the Loan Documents or available to the Parties in equity or at law, and prior to the first disbursement of the Agency Loan, the Agency may terminate this Agreement and the Loan Documents and all of its obligations hereunder and thereunder without cost or liability upon the Owner's Event of Default. 5.5 Origination Fee. As consideration for the Agency's entry into this Agreement and the Agency's Loan to Owner, within fifteen (15) working days from the Effective Date of this Agreement, the Owner shall submit to Agency a fee to reimburse the Agency for all of its costs and expenses in connection with the approval and processing of the Agency Loan ( "Origination Fee "). The amount of Origination Fee shall be Twenty Thousand Dollars ($20,000) and shall be in a form 43 2010683 RVPUB\ICCV\646177 -18- of security acceptable to the Agency to insure that the Owner will proceed diligently and in good faith to fulfill its obligations under this Agreement. If the Origination Fee is in the form of cash or a certified cashier's check, it shall be deposited in an account in a bank selected by Agency. The Origination Fee shall be refunded or released to Owner upon the Agency's payment of Progress Payment 1 to the Owner as set forth in the Schedule of Performance. In the event that the Agency does not pay to Owner Progress Payment 1 as a result of the Owner's Event of Default, the Agency shall be entitled to keep the Origination Fee and any accrued interest thereon. The forgoing notwithstanding, in the event that the Owner makes a good faith application to obtain the HOME Funds and the CSCDA Bonds as set forth in Section 3.2, but does not receive either the HOME Funds or the CSCDA Bonds, the Agency shall promptly release to the Owner the entire amount of the Origination Fee, without interest. ARTICLE 6. GENERAL TERMS. 6.1 Notices and Demands. All notices or other communications required or permitted between the Agency and the Owner under this Agreement shall be in writing, and may be (i) personally delivered, (ii) sent by United States registered or certified mail, postage prepaid, return receipt requested, (iii) sent by telecopier, or (iv) sent by nationally recognized overnight courier service (e.g., Federal Express), addressed to Parties at the addresses provided in Section 1.3, subject to the right of either Party to designate a different address for itself by notice similarly given. Any notice so given by registered or certified United States mail shall be deemed to have been given on the second (2nd) business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail, such as notices delivered by telecopier or courier service (e.g., Federal Express), shall be deemed given upon receipt of the same by the Party to whom the notice is given. 6.2 Nonliability of Agency or City Officials and Employees. No board member, official, contractor, consultant, attorney or employee of the Agency or the City shall be personally liable to the Owner, any voluntary or involuntary successors or assignees, or any lender or other party holding an interest in the Proj ect or the Property, in the event of any default or breach by the Agency, or for any amount which may become due to the Owner or to its successors or assignees, or on any obligations arising under this Agreement. 6.3 Conflict of Interests. No board member, official, contractor, consultant, attorney or employee of the Agency or the City shall have any personal interest, direct or indirect, in this Agreement nor shall any such board member, official or employee participate in any decision relating to this Agreement which affects his /her personal interests or the interests of any corporation, partnership or association in which he /she is directly or indirectly interested. The Owner represents and warrants to the Agency that it has not received any other form of consideration in connection with this Agreement other than the consideration expressly provided herein. 6.4 Time Deadlines Critical; Extensions and Delays; No Excuse Due to Economic Changes. Time is of the essence in the performance of the Agency's and the Owner's obligations under this Agreement. In addition to specific provisions of this Agreement, providing for extensions RVPUB\KCV\646177 -19- 03 2010683 'Y/ `/ �x..k of time, times for performance hereunder shall be extended where delays or defaults are due to war•, terrorism; insurrection; any form of labor dispute; lockouts; riots; floods; earthquakes; fires; acts of God or of third parties; third party litigation; acts of a public enemy; referenda; acts of governmental authorities (except that the failure of the Agency to act as required hereunder shall not excuse its performance); moratoria; epidemics; quarantine restrictions; and freight embargoes (collectively, "Enforced Delays ") provided, however, that the Party claiming the extension notifies the other Party of the nature of the matter causing the default; and, provided further, that the extension of time shall be only for the period of the Enforced Delays. However, deadlines for performance may not be extended as provided above due to any inability of the Owner to obtain or maintain acceptable financing for the construction or operation of the Project. ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, THE OWNER EXPRESSLY ASSUMES THE RISK OF UNFORESEEABLE CHANGES IN ECONOMIC CIRCUMSTANCES AND /OR MARKET DEMAND /CONDITIONS AND WAIVES, TO THE GREATEST LEGAL EXTENT, ANY DEFENSE, CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART ON ECONOMIC NECESSITY, IMPRACTICABILITY, CHANGED ECONOMIC CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES _ er's Ini£ials 6.5 Attorneys' Fees. In the event of the bringing of an arbitration, action or suit by a Party hereto against another Party hereunder by reason of any breach of any of the covenants or agreements or any intentional inaccuracies in any of the representations and warranties on the part of the other Party arising out of this Agreement or any other dispute between the Parties concerning this Agreement or the Property, then, in that event, the prevailing Party in such action or dispute, whether by final judgment or arbitration award, shall be entitled to have and recover of and from the other Party all costs and expenses of suit or claim, including actual attorneys' and expert's fees. Any judgment, order or award entered in any final judgment or award shall contain a specific provision providing for the recovery of all costs and expenses of suit or claim, including actual attorneys' and expert's fees (collectively, "Costs ") incurred in enforcing, perfecting and executing such judgment or award. For the purposes of this Section 6.5, Costs shall include, without implied limitation, attorneys' and experts' fees, costs and expenses incurred in the following: (i) post judgment motions and appeals, (ii) contempt proceedings, (iii) garnishment, levy and debtor and third party examination; (iv) discovery; and (v) bankruptcy litigation. This Section 6.5 shall survive any termination of this Agreement. 6.6 Submission of Documents and Other Actions for Approval. Except where such approval is expressly reserved to the sole discretion of the approving Party, all approvals required hereunder by either Party shall not be unreasonably withheld or delayed. Any requests for approval of documents submitted to the Agency shall contain the following all capitalized heading in no less than twelve (12) point bold type on the first page of the request: RVPUB\KCV\646177 -20- 103 2010683 W 7 J 1 1 15 l(11 )l ATTENTION EXECUTIVE DIRECTOR: THIS IS A REQUEST FOR AGENCY APPROVAL OF THE ATTACHED DOCUMENT. PLEASE REVIEW THE MATERIAL AND APPROVE OR DISAPPROVE IT IN WRITING WITHIN THE TIME ESTABLISHED THEREFOR IN THE AGREEMENT OR SCHEDULE OF PERFORMANCE. FAILURE TO DISAPPROVE WITHIN THE ALLOTTED TIME MAY BE DEEMED AN APPROVAL. 6.7 Amendments to This Agreement. The Owner and the Agency agree to consider reasonable requests for amendments to this Agreement which may be made by any of the Parties hereto, lending institutions, bond counsel or financial consultants. Any amendments to this Agreement must be in writing and signed by the appropriate authorities of both the Agency and the Owner. The Agency's Executive Director is authorized on behalf of the Agency to approve and execute minor amendments to this Agreement, including, but not limited to, the granting of extensions of time to the Owner. 6.8 Jurisdiction and Venue. Any legal action or proceeding concerning this Agreement shall be filed and prosecuted in the appropriate federal district or state court in the County of Los Angeles, California. Each Party hereto irrevocably consents to the personal jurisdiction of that court. The Agency and the Owner each hereby expressly waive the benefit of any provision of federal or state law or judicial decision providing for the filing, removal, or change of venue to any other court or jurisdiction, including, without implied limitation, federal district court, due to any diversity of citizenship between the Agency and the Owner, due to the fact that either the City or the Agency is a party to such action or proceeding or due to the fact that a federal question or federal right is involved or alleged to be involved. Without limiting the generality of the foregoing, the Owner and the Agency specifically waive any rights provided to it pursuant to California Code of Civil Procedure Section 394. The Owner acknowledges that the provisions of this Section 6.8 are material consideration to the Agency for its entry into this Agreement, in that the Agency will avoid the potential cost, expense and inconvenience of litigating in a distant forum. 6.9 Interpretation. The Agency and the Owner acknowledge that this Agreement is the product of mutual arms- length negotiation and drafting and that each Party has been represented by legal counsel in the negotiation and drafting of this Agreement. Accordingly, the rule of construction which provides the ambiguities in a document shall be construed against the drafter of that document shall have no application to the interpretation and enforcement of this Agreement. In any action or proceeding to interpret or enforce this Agreement, the finder of fact may refer to any extrinsic evidence not in direct conflict with any specific provision of this Agreement to determine and give effect to the intention of the Parties. 6.10 Counterpart Originals; Integration. This Agreement maybe executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument. This Agreement, and its Exhibits, represent the entire understanding of the Parties and supersedes all negotiations and previous agreements, whether oral or written, between the Parties with respect to all or any part of the subject matter hereof. RVPUB\KCV\646177 -21- 2010683 6.11 No Waiver. Failure to insist on any one occasion upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any right or power hereunder at any one time or more times be deemed a waiver or relinquishment of such other right or power at any other time or times. 6.12 Successors and Assigns. The terms, covenants and conditions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns. Except as provided in Section 4.12, upon the permitted sale, transfer or conveyance by an owner of the Property of its interest therein, such owner shall thereupon be relieved of its obligations under this Agreement from and after the date of sale, transfer or conveyance except with respect to any defaults in the performance of its obligations hereunder or thereunder which occurred prior to such sale, transfer or conveyance, and the transferee shall thereafter be solely responsible for the performance of all of the duties and obligations of the Owner under this Agreement. 6.13 No Third Party Beneficiaries. The performance of the Agency's and the Owner's respective obligations under this Agreement are not intended to benefit any party other than the Agency or the Owner, except as expressly provided otherwise herein. No person or entity not a signatory to this Agreement shall have any rights or causes of action against any Party to this Agreement as a result of that Party's performance or non - performance under this Agreement, except as expressly provided otherwise herein. 6.14 No Effect on Eminent Domain Authority. Nothing in this Agreement shall be deemed to limit, modify, or abridge or affect in any manner whatsoever the Agency's and the City's eminent domain powers with respect to the Property or the Project, or any other property owned by the Owner. 6.15 Tax Effects. The Owner acknowledges that the benefits to be received by Owner hereunder may be taxable or have tax consequences pursuant to one or more provisions of the United States Internal Revenue Code or California Revenue & Taxation Code. The Owner acknowledges that neither the City nor the Agency has made any representations to the owner concerning the effect, if any, of such consequences and the Owner acknowledges that it has retained independent tax advice from advisors of its own choosing. The Owner shall be responsible for all tax consequences resulting from Owner's entry into this Agreement or from any benefits which Owner may receive pursuant to the provisions hereof. 6.16 Inspection of Books and Records; Yearly Audited Financial Statements. Upon reasonable advance notice and during normal business hours, the Agency may, at all reasonable times, inspect the books and records of Owner pertaining to the Property and the Project as pertinent to the purposes of this Agreement and the Loan Documents. 6.16.1 Annual Financial Statements. The Owner shall, at its sole cost, expense and liability, provide the Agency with certified financial statements on an annual basis. The certified financial statements shall be provided to the Agency without need of request therefor by the Agency RVPUB\KCV\646177 -22- 03 2010683 7 1 / f, l and immediately after they have been prepared and certified for distribution by the Owner's accounting firm. Commencing from and after construction of the Project is completed, the certified financial statements must be prepared by reputable, licensed certified public accountants. The certified financial statements must contain sufficient information to allow the Agency to determine whether the Owner has complied with its obligations and responsibilities under this Agreement and the Loan Documents. Without limiting the generality of the foregoing, the certified financial statements must provide, at a minimum, a description of the sources and uses of funds for the Project. 6.16.2 Financial Audit. In addition to the yearly certified financial statements, the Agency, may, at any time, at is sole cost and expense, conduct or have conducted on its behalf, a financial audit of all the Owner's books, records, ledgers and documents concerning the Property and the Project. The Owner shall cooperate with the Agency's auditors and shall provide such information as the auditors may reasonably request and the Owner shall direct its auditors to do the same. [Signatures on Following Pages] 03 2010083 RVPUB\KCV\646177 -23- 0w0wwkww**,f" 1115I^ SIGNATURE PAGE TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT "AGENCY" THE ARCADIA REDEVELOPMENT AGENCY a public body, corporate and politic By: A �'Om) William Kelly Executive Director ATTEST: By: Agency SecretaryP APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP a RVPUB\Y,CV\646177 -24- 03 2010683 STATE OF CALIFORNIA } CAPACITY CLAIMED BY SIGNER: COUNTY OF LOS ANGELES On t_. ' 2003 before me, the undersigned notary public, personally appeared d personally known to me OR proved to me on the basis of (\ satisfacto evidence to be the person whose name( is /ale subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(i`es), and that by his/her /their signature(g) on the instrument the person($), or the entity upon behalf of which the personN) acted, executed the instrument. WITNESS my hand and official seal. Signature of otary Public RVPUB\KCV\646177 -- Corporate Officer(s) Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness -- Guardian/Conservator Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) SIGNATURE PAGE TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT /LOAN AGREEMENT "OWNER" ARCADIA HERITAGE PARK, LP a California limited partnership By: ASL ARCADIA, INC. a California corporation Its: Development General Partner By: Roger Davila Vice - President By: HERITAGE COMMUNITY HOUSING, INC. a California non - profit corporation Its: Managing General Partner By John Bigley " Executive Vice President By: AMERICAN SENIOR LIVING, INC. a California corporation Its: Developer By: Roger avila Vice - President RVPUB\KCV\646177 -25- 03 2010683 f µ, ry �F STATE OF CALIFORNIA COUNTY OF EE)S:ft tMtS �-� , 2003, b ore me the undersigned notary public, personally appeared 44 A- , personally known to me OR proved to me on t e basis of satisfactory evidence to be the person whose nameQ0 is /X subscribed to the within instrument and acknowledged to me that he /skel/tIry executed the same in his/4k /tWr authorized capacity(i )6, and that by his/16 /th r signature(4 on the instrument the persono), or the entity upon behalf of which the person acted, executed the instrument. my hand and official seal. CAPACITY CLAIMED BY SIGNER: -- Individual(s) Corporate _ Officer(s)) VJU Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness Guardian /Camservator Other SIGNER IS REPRESENTING: N OAF P RSON( ) OR ENTITY(IES) A. 4 Suture of Notary Public c ScA� Ott `a §Icm Notary N`41- - Cdlf,—rlla P,n�C rY;7t xT uaC3C1XZ e' r . RVPUB\-KCV\646177 -26- 03 2010683 Y� STATE OF 1 •' On- 2003, bgfore me, the undersigned notary public, personally appeared -� t , personally known to me OR proved to me on the basis d sati factory evidence to be the person(,' whose name(. is /ak subscribed to the within instrument and acknowledged to me that he /sbCtl*,-v executed the same in his/WthVr authorized capacity(ig), and that by his/lVtfVr' signatureVon the instrument the person(j', or the entity upon behalf of which the person(p) acted, executed the instrument. my hand and official seal. otary Public CAPACITY CLAIMED BY SIGNER: Corporate ` Officer(s) ���� rte! it Partner(s) — Attorney -in -Fact — Trustee(s) Subscribing Witness Guardian /Cmservator Other SIGNER IS REPRESENTING: NAME Oli PERSON(S) OR ENTITY(IRS) RVPUB\KCV\646177 -27- 03 '2010600 ,� k p e `INN! CCOR Err rcttr ~iC:, -nt 122,62'm � RVPUB\KCV\646177 -27- 03 '2010600 ,� 3 STATE OF CALIFORNIA b04nq e- COUNTY OF SAS- "' -- Ona t�—n 2003, before me, the undersigned notary public, personally appearedTpGQ,t 'L� 114 personally known to me OR proved to me on the basis of satisfactory evidence to be the personX whose name04 is /* subscribed to the within instrument and acknowledged to me that he /sW /tcy executed the same in his/]* /thkT authorized capacity(iW), and that by hisJ* /tWir signature�on the instrument the person(4, or the entity upon behalf of which the personal acted, executed the instrument. my hand and official seal. of Notary Public CLAIMED BY SIGNER: Individual(s) Corporate Officer(s)Nj j .j R t —� Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness Guardian /Conservator SIGNER IS REPRESENTING: NAME OF PERSONLS) OR ENTJTY( RVPUB\KCV\646177 -28- 9 j 4010683 � r '� 'fa =W r CLAIMED BY SIGNER: Individual(s) Corporate Officer(s)Nj j .j R t —� Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness Guardian /Conservator SIGNER IS REPRESENTING: NAME OF PERSONLS) OR ENTJTY( RVPUB\KCV\646177 -28- 9 j 4010683 STATE OF CALIFORNIA COUNTY OF LOS ANGELES On 2003, before me, the dersigned notary public, personally appeared '�, ersonally known to me OR proved to me on the basis of satisfactory videncc to be the person(N) whose name(,) is /ale subscribed to the within instrument and acknowledged to me that he /ske /NIey executed the same in his/her /their authorized capacity(ks), and that by hisAer /their signature(s) on the instrument the person(N), or the entity upon behalf — Corporate Officer(s) Partner(s) — Attorney -in -Fact Trustee(s) — Subscribing Witness -- Guardian/Conservator Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) Signature of Notary Public RVPUB\KCV\646177 03-2010683 r" 711 EXHIBIT A -1 TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT /LOAN AGREEMENT Legal Description of Property The Property referred to in the Agreement is in the State of California, County of Los Angeles, and is described as follows: PARCELI : THE WEST 185.48 FEET OF THE EAST 768.00 FEET OF LOT 68 OF SANTA ANITA COLONY, IN THE CITY OF ARCADIA, AS PER MAP RECORDED IN BOOK 42 PAGE 87 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM THAT PORTION INCLUDED WITHIN THE LINES OF THE 80 FOOT STRIP OF LAND CONDEMNED FOR FLOOD CONTROL PURPOSES BY FINAL DECREE ENTERED IN CASE NO. 519554 OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF LOS ANGELES, AS DESCRIBED IN CERTIFICATE OF TITLE NO. TV -61158 ON FILE IN THE OFFICE OF THE REGISTAR OF TITLES OF SAID COUNTY. PARCEL 2: THAT PORTION OF THE EASTERLY 582.52 FEET OF LOT 68 IN SANTA ANITA COLONY, AS SHOWN ON MAP RECORDED IN BOOK 42 PAGE 87 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN THE FOLLOWING DESCRIBED BOUNDARIES: BEGINNING AT THE INTERSECTION OF THE WESTERLY LINE OF SAID EASTERLY 582.52 FEET ON SAID LOT AND THE NORTHERLY LINE OF LIVE OAK AVENUE, 100 FEET WIDE, AS SHOWN ON MAP OF TRACT 13935 RECORDED IN BOOK 285 PAGES 12 AND 14 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG SAID NORTHERLY LINE NORTH 79 58' 10" EAST 26.09 FEET TO THE WESTERLY SIDELINE OF THAT STRIP OF LAND, 80 FEET WIDE DESCRIBED IN PARCEL NO. 123 IN A FINAL JUDGEMENT HAD IN SUPERIOR COURT CASE NO. 519554, RECORDED IN BOOK 25990 PAGE 156, OFFICIAL RECORDS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG SAID WESTERLY LIVE NORTH 9 57'51" WEST 166.89 FEET TO SAID WESTERLY LINE OF SAID EASTERLY 582.52 FEET OF SAID LOT; THENCE SOUTHERLY ALONG SAID LAST MENTIONED WESTERLY LINE 168.96 FEET TO THE POINT OF BEGINNING. EXCEPT THEREFROM 25% OF ALL OIL, GAS, AND HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND WITHOUT RIGHT OF SURFACE ENTRY, AS TO PARCELS 1 AND 2. RVPUB\KM646177 Exhibit A -1 3 2010683 510 14 V EXHIBIT A-2 TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT Site Map of Property [Attached Behind This Page] RVPUB\KCV\646177 Exhibit A-2 03 2010683 - lfieas� °�i�a4xt itl „1(,i, r (p (17,) (1881 (123) ODRUFF AVE q72) (fee) ryeo) N 100 0 100 200 300 Feet (188J ( }77) (171) (188) (169) SANDRA AVE (,BB) O-) (l 11) (2100) (2714) (2720) (2730) (2740) (tAJ) 11371 (131) 1 (123) 1 (117) (7 (109) (99) I (981 10 (100) (811 (tAJ) 11371 (131) 1 (123) 1 (117) (1091 I (103) (99) I (981 I (9 (14n (138) 100 Min, (11 B) (108) MOs) f98J (84) (B0) (141) 1 (135) 1 (127) I (119) I I (1031 I (101) (177 189 (1811 (189) (181) LAS TUNAS DR (10 (132 (124) (120) (114) (10 ( 0 (82J 88) (2101 rVO I n Q o (271 v D (123) (119) (2719) O c/) (141) (fad J (1719 WA 1i, (185) Q rii VE '� e K / (148) (1M) (208J � C�� TY O.F1 Development Services Department Ax °c IP. Engineering Division Prepared by: R. S. Gonzalez, December, 2002 �OORPORAT%'9 I h (90) 'A 1�1�' I (50) 148 -158 W Las Tunas Dr APN 5788- 022 -014 03 20.0083 � v�M EXHIBIT B TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT /LOAN AGREEMENT Scope of Development The Owner shall design, construct and operate the Project on the Property in accordance with this Agreement and the Loan Documents. The Project shall include a fifty -four (54) Unit, three (3) story affordable senior housing development. As provided in this Agreement and the Loan Documents, fifty -three (53) of the Units shall be restricted for use by very low and low income seniors for a period of at least fifty five (55) years. The Project, including the individual Units, parking area and grounds, shall be constructed consistent with the Owner's revised proposal and F & A Architectural plans dated May 28, 2002 (renderings and elevations); August 1, 2002; September 6, 2002 (site plan and floor plan); and December 26, 2002 (one bedroom plan and two bedroom plan). All costs for the Project, including but not limited to related on and off site costs and required governmental fees, assessments, taxes, surcharges, and the like shall be paid by the Owner. RVPUB\KCV\646177 Exhibit B � " fi 03 2010683 ,'r 1 EXHIBIT C TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT Schedule of Performance Pre Agency Approval of OPA in 1. The Owner shall provide, as reasonably requested all proforma construction and Dec 2, 2002 cost information related to the Project to the Agency and/or the Agency's housing consultant, and shall cooperate in the Agency's efforts to reduce the Agency's costs while maximizing the financial assistance to lower income seniors and constructing the Project to the City's design standards. 2. Planning Commission approval of CUP /ADR. 3. Owner shall negotiate and execute OPA. 4. Planning Commission approves ADR #02 -040 and PCR #1685 for CUP 02 -014. Post Agency Approval of OPA 1. Owner shall submit CSCDA Bond and HOME Fund applications 2. Agency shall approve OPA and Loan Documents. 3. Owner shall submit building plans for plan check. Dec 10, 2002 Jan 7, 2003 Jan 14, 2003 Jan 15, 2003 Jan 21, 2003 March 1, 2003 4. Owner closes on land for development (Marketowne), City returns plans for March 3, 2003 correction. RVPUB\KCV\646177 Exhibit C Page 1 03 2010683 aM 0 �F 5. Owner or Owner's consultant shall start tenant relocation program. March 4, 2003 6. Owner receives bond allocation. March 26, 2003 7. Owner shall submit tax credit application to CTCAC. April 1, 2003 8. Owner shall re- submit building plans to City for permits. April 28, 2003 9. City shall return plans for final correction. May 23, 2003 10. Owner shall submit final plans for permits, pays fees. June 13, 2003 11. Owner shall close on CSCDA bonds. June 23, 2003 11. Owner or Owner's consultant shall complete tenant relocation. June 30, 2003 13. Owner shall begin construction. Upon completion of rough grading for the July 14, 2003 foundation, the Agency shall pay Owner Progress Payment 1 - $540,000. RVPUB\KCV\646177 Exhibit C 03 2010683 Page 2 14. Construction complete, as determined by an authorized representative of the April 16, 2004 City. Agency shall pay Owner Progress Payment 2 - $900,000. 15. Project begins residential operations and forty three (43) rental tenants move in. May 1, 2004 Agency shall pay Owner Progress Payment 3 - $360,000. 16. Project is fully leased. Sept 1, 2004 RVPUB\KCV\646177 Exhibit C Page 03 2010683 Y EXHIBIT D TOsr HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT Residual Receipts Promissory Note RVPUB\KCV\646177 Exhibit D 03 2010683 V,� v RESIDUAL RECEIPTS PROMISSORY NOTE $1,800,000 , 2003 Arcadia, California FOR VALUE RECEIVED, the undersigned, ARCADIA HERITAGE PARK, L.P., a California limited partnership ( "Maker "), promises to pay to THE ARCADIA REDEVELOPMENT AGENCY, a public body, corporate and politic ( "Holder "), or order at Holder's office at 240 West Huntington Drive, Arcadia, California 91006 -6021, or such other place as Holder may designate in writing, the principal sum of One Million Eight Hundred Thousand Dollars ($1,800,000) together with interest as provided herein. 1. Related Agreements. The rights and obligations of Maker and Holder under this Residual Receipts Promissory Note ( "Note ") are made with respect to that certain Heritage Park Owner Participation Agreement/Loan Agreement dated January 21, 2003 ( "Agreement "); that certain Deed of Trust and Assignment of Rents dated January 21, 2003 ( "Trust Deed "); and that certain Regulatory Agreement dated January 21, 2003 ( "Regulatory Agreement "). The Agreement, Trust Deed and Regulatory Agreement shall hereinafter be collectively referred to as the "Related Agreements." All initially capitalized terms used and not otherwise defined in this Note shall have the meanings given to them in the Related Agreements. 2. Repayment of Note. Maker will pay to Holder the principal amount of this Note, and all accrued interest ( "Payment Amount ") as follows: 2.1 From the date of this Note until paid in full, the unpaid principal balance of this Note will bear simple interest computed at the rate of four and one -half percent (4.5 %) per annum, compounded annually. 2.2 Interest shall be computed on the basis of a year of three hundred sixty (360) days and actual days elapsed and shall be payable on the unpaid principal balance hereof outstanding annually as set forth in Section 2.3 until the Payment Amount is paid in full. 2.3 The amounts due under this Note shall be repaid on an annual basis from fifty percent (50 %) of the Project's Residual Receipts. "Residual Receipts" shall mean all money and income from the Project ( "Gross Receipts ") remaining annually after the payment of all normal and necessary expenses of operation of the Project, including but not limited to the following expenses which are listed in order of priority: (i) The normally amortized principal and interest payments due on mortgages which are senior to the Note which have been approved by the Holder; (ii) The fee deferred by the developer of the Project and approved by the Owner and the tax credit investor for the services of developer related to the development of the Project, including the preparation RVPUB \KCV646177 Exhibit D 0 3 2010683 Page 1 �j 1�5 of plans, tests, studies and supervision of construction related to the Project, in an amount not to exceed fifteen percent (15 %) of eligible basis as defined in Section 42 of the Internal Revenue Service Code; (iii) Insurance on the Project; (iv) Ad valorem taxes and assessment payments; (v) Property management fees, expenses and costs in an amount not to exceed five percent (5 %) of the Gross Receipts. The Maker shall fund all costs of the Project's social programs as well as the costs of compliance monitoring and reporting from such project management fees and no other deduction from the Gross Receipts shall be allowed for the same; (vi) Limited partnership asset management fees not to exceed Five Thousand Dollars ($5,000) per year, subject to annual adjustments equal to the increase or decrease in the Consumer Price Index for All Urban Consumers (CPI -U) (Los Angeles), (base year 2002 = 100), published by the United States Department of Labor, Bureau of Labor Statistics, but in no event shall operation of the above result in an increase or decrease in excess of three percent (3 %) in any one year; (vii) General partner administrative fees, not to exceed Ten Thousand Dollars ($10,000) per year subject to annual adjustments equal to the increase or decrease in the Consumer Price Index for All Urban Consumers (CPI -U) (Los Angeles), (base year 2002 = 100), published by the United States Department of Labor, Bureau of Labor Statistics, but in no event shall operation of the above result in an increase or decrease in excess of three percent (3 %) in any one year; (viii) Annual reserves for repair and replacement of the improvements in the Project not more than the greater of (a) Two Hundred Dollars ($200) per Unit, or (b) such amount per Unit as may be required by a tax credit investor or holder of senior financing; and (ix) Auditing and accounting fees for standard, customary and non - forensic audits required by any tax credit investor, holder of senior financing, the County of Los Angeles, or the City. Operating expenses shall be considered "normal and necessary" if incurred generally for similarly structured, financed and restricted rental properties operated by similar entities. Non - cash expenditures, including without implied limitation, depreciation expenses, shall not be considered normal and necessary operating expenses of the Project and shall not be deducted from the Gross Receipts for the purposes of determining Residual Receipts. Any and all capital repairs and replacement costs shall first be funded from the applicable reserve account and shall be expensed only if the reserve account is completely depleted. The amount of the annual payment to the Holder shall be an amount equal to fifty percent (50 %) of the Residual Receipts multiplied by a fraction, the numerator of which is the original principal R,VPUB \KC V646177 Exhibit D Page 2 amount of this Note and the denominator of which is the original principal amount of this Note plus the original principal amount of the County of Los Angeles HOME Funds ( "Holder's Share "). Payment of the Holder's Share of the Residual Receipts produced from the Project shall be made by the Maker to the Holder annually on or before July 15th of each year. Payment shall be applied first to accrued interest and thereafter to principal. Maker shall annually provide the Holder with an accounting acceptable to the Holder, documenting the calculation of Residual Receipts for the previous calendar year ending December 31. This accounting shall be made on or before July 15, together with the payment of Holder's Share of the Residual Receipts. 2.4 For the purpose of this Note, the "Note Term" shall be the period beginning as of the disbursement of the Agency's Loan and ending on the thirtieth (30t) anniversary ( "Maturity Date ") of the date that the first certificate of occupancy for the Project is issued by the City. On the Maturity Date, any outstanding balances due pursuant to this Note shall be due and payable from any and all funds available to Maker provided, however, that in the event of any refinancing of all or any portion of the senior liens and encumbrances prior to the Maturity Date , one hundred percent (100 %) of the net proceeds thereof shall be used as necessary, up to and including one hundred percent (100 %) of said proceeds, to prepay the principal and accrued interest of this Note 2.5 The Payment Amount may be prepaid, without penalty, in whole or in part, at any time and from time to time without penalty or premium. The foregoing notwithstanding, payment or prepayment shall not relieve the Maker of the covenants, conditions and obligations set forth in this Note or the Related Agreements. 2.6 Maker's obligations under this Note and the Related Agreements are absolute and not contingent upon Maker's completion of the Project, Maker's ability to locate tenants to occupy the Project on the Property, or any other condition. 2.7 All payments due hereunder are payable in lawful money of the United States of America in same day funds. Any payments made shall be applied first to accrued interest and thereafter to reduction of principal. 2.8 In the event Maker fails to make the required payment of principal and /or interest under this Note within ten (10) business days after such payment becomes due and payable, a late charge of five percent (5 %) of the overdue payment of principal and /or interest (or of principal only if by the laws of the State of California a late charge may not be charged on overdue interest) may be charged by Holder, unless applicable law requires a lesser such charge, in which event the maximum rate permitted by such law may be charged by Holder.. The parties agree that this late charge represents a reasonable sum considering all of the circumstances existing on the date of this Note and represents a fair and reasonable estimate of the costs and damages that Holder will incur by reason of the late payment. The parties further agree that proof of actual damages would be costly or inconvenient. Acceptance of any late charge shall not constitute a waiver of the default with respect to the overdue amount, and shall not prevent Holder from exercising any of the other rights and remedies available to Holder. The foregoing shall not be construed as obligating the Holder to accept any payment after its due date. RVPUB \KCV646177 Exhibit D Page 03 2`010683 �.ig 3. Security. This Note is secured by the Trust Deed. 4. Non - Recourse. Except as otherwise provided in this Section 4, the Maker shall have no personal liability under this Note or the Related Agreements for the repayment of the indebtedness evidenced by this Note ( "Indebtedness ") or for the performance of any other obligations of the Maker under the Related Agreements, and the Holder's only recourse for the satisfaction of the Indebtedness and the performance of such obligations shall be the Holder's exercise of its rights and remedies with respect to the Property under the Related Agreements and any other collateral held by the Holder as security for the Indebtedness. 4.1 The Maker shall be personally liable to the Holder for the repayment of a portion of the Indebtedness equal to any loss or damage actually suffered by the Holder as a result of (i) failure of the Maker to pay to the Holder any rents, insurance proceeds or condemnation proceeds to the extent required by the Deed of Trust following an Event of Default; or (ii) fraud or written material misrepresentation by the Maker or any officer, director, partner, member or employee of the Maker in connection with the application for or creation of the Indebtedness or any request for any action or consent by the Holder, except that the Maker will not be personally liable to the extent that the Maker lacks the legal right to direct the disbursement of such sums because of a bankruptcy, receivership or similar judicial proceeding. 4.2 To the extent that the Maker has personal liability under this Section 4, the Holder may exercise its rights against the Maker personally without regard to whether the Holder has exercised any rights against the Property or any other security, or pursued any rights against any guarantor, or pursued any other rights available to the Holder under this Note or the Related Agreements or applicable law. 5. Default. An "Event of Default" shall be deemed to occur upon any material breach of an obligation under either this Note or the Related Agreements, if the breach is not cured within ten (10) business days after Trustor receives initial notice of such breach. Furthermore, any event defined as a "Default" or "Event of Default" under the Related Agreements shall constitute an Event of Default under this Note. The foregoing notwithstanding, upon the occurrence of any of the following, an Event of Default shall be deemed to have occurred and the Holder may, at Holder's option, without prior notice and without regard to whether the Maturity Date has occurred, declare the unpaid principal balance and all accrued interest due under this Note to be immediately due and payable, and the same shall immediately become due and payable: 5.1 Maker fails to make any payment under this Note when due or within ten (10) business days following written notice of such failure from Holder; or 5.2 Maker (i) becomes insolvent or unable to pay Maker's debts generally as they mature, (ii) makes a general assignment for the benefit of creditors, (iii) admits in writing Maker's inability to pay Maker's debts generally as they mature, (iv) files or has filed against it a petition in bankruptcy or a petition or answer seeking a reorganization, arrangement with creditors or other similar relief under the Federal bankruptcy laws or under any other applicable law of the United States of America or any state thereof, or (v) consents to the appointment of a trustee or receiver for it or for a substantial part of Maker's property; or R.VPUB \KCV646177 Exhibit D Page 03 20.x.0683 5.3 Any order, judgment or decree is entered appointing, without Maker's consent, a trustee or receiver for it or for a substantial part of Maker's property that is not removed within sixty (60) business days from such entry; or 5.4 A judgment against Maker for the payment of money totaling in excess of Two Hundred Fifty Thousand Dollars ($250,000) is outstanding for a period of sixty (60) business days without a stay of execution thereof; or 5.5 Maker fails to materially comply with any obligation required of it pursuant to this Note, the Related Agreements, or any other agreement between Maker and Holder. Notwithstanding the above, in the event of an actual or deemed entry of an order for relief with respect to Maker under the Federal Bankruptcy Code, this Note and all interest and other amounts due hereon shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker. The Holder may exercise Holder's option to accelerate after any Event of Default, regardless of any prior forbearance. 6. Indemnification. Maker agrees to indemnify Holder to hold Holder and Holder's successors and assigns harmless from and against any and all claims, demands, costs, liabilities and obligations of any kind or nature arising out of any default hereunder, including, without limitation, all costs of collection, including actual attorneys' and expert witness fees and all costs of suit, in the event the unpaid principal sum of this Note and /or any interest thereon is not paid when due. 7. Amendments and Modifications. This Note may be amended or modified only in writing signed by Maker and Holder. 8. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other person or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 9. Successors and Assigns. This Note shall bind Maker and Maker's successors and assigns and the benefits hereof shall inure to Holder and Holder's successors and assigns. 10. Governing Law. The validity, interpretation and performance of this Note shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles. 11. Time of the Essence. Time is of the essence of this Note. 12. Joint and Several Obligation. Maker and all other persons liable or to become liable for all or part of this indebtedness, jointly and severally waive demand, presentment for RVPUB \KCV646177 Exhibit D Page 5 01068 l 1 IL' f payment, notice of nonpayment, protest and notice of protest hereon, and agree to pay, in the Event of Default hereunder, all costs of collection, including attorneys fees', whether or not suit is commenced. 13. Jurisdiction. The Holder and the Maker acknowledge and stipulate that the obligation hereunder was entered into in the City of Arcadia, Los Angeles County, California. Any legal action or proceeding to interpret, enforce, or which in any way arises out of this Note shall be instituted and prosecuted in the appropriate court in Los Angeles County, California. Maker expressly waives, to the maximum legal extent, any legal right it may have to have such action or proceeding transferred to or prosecuted in any other court or jurisdiction. 14. Attorneys' Fees. Maker agrees that if any amounts due under this Note are not paid when due, Maker shall pay in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not a suit is filed. [Signatures on Following Page] RVPUB \KCV646177 Exhibit D Page 03 201.0683 7/ if 5 /0: ARCADIA HERITAGE PARK, LP a California limited partnership By: ASL ARCADIA, INC. a California corporation Its: Development General Partner Roger Davila Vice - President By: HERITAGE COMMUNITY HOUSING, INC. a California non - profit corporation Its: Managing General Partner S John Bigley Executive Vice - President By: AMERICAN SENIOR LIVING, INC. a California corporation Its: Developer Roger Davila Vice - President RVPUB \KCV646177 Exhibit D Page 7 03 2010683 t� EXHIBIT E TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT/LOAN AGREEMENT Deed of Trust and Assignment of Rents RVPUB\KCV646177 Exhibit E 03 2010683 =11� RECORDING REQUESTED BY AND 1 WHEN RECORDED MAIL TO: The Arcadia Redevelopment Agency 240 West Huntington Drive Post Office Box 60021 Arcadia, California 91006 -6021 Attn: Executive Director FFee Exempt -Govt. Code '61031 (Space above for Recorder's Use) HERITAGE PARK OWNER PARTICIPATION AGREEMENT / LOAN AGREEMENT DEED OF TRUST AND ASSIGNMENT OF RENTS THIS DEED OF TRUST AND ASSIGNMENT OF RENTS ( "Deed of Trust "), dated January 7, 2003, is made by ARCADIA HERITAGE PARK, L.P., a California limited partnership, whose address is 1740 East Garry Avenue, Suite 105, Santa Ana, California ( "Trustor "), in favor of , a ( "Trustee "), and THE ARCADIA REDEVELOPMENT AGENCY, a public body, corporate and politic, whose address is 240 West Huntington Drive, Post Office Box 60021, Arcadia, California 91006 -6021 ( "Beneficiary "), and is executed to secure, that certain Promissory Note of even date herewith ( "Note "), in the principal amount of One Million Eight Hundred Thousand Dollars ($1,800,000), executed by Trustor in favor of Beneficiary. This Deed of Trust is made with respect to the Note; that certain Heritage Park Owner Participation Agreement /Loan Agreement dated January 21, 2003 ( "Agreement "); and that certain Regulatory Agreement dated January 21, 2003 ( "Regulatory Agreement "). All initially capitalized terms used and not otherwise defined in this Deed of Trust shall have the meanings given to them in the Agreement. 1. Grant in Trust and Security Agreement. For valuable consideration, Trustor irrevocably grants, transfers and assigns to Trustee, in trust, with power of sale, for the benefit of Beneficiary, the following property ( "Trust Estate "): 1.1 the real property described in Exhibit A attached to this Deed of Trust and incorporated in this Deed of Trust by reference ( "Land "); 1.2 all buildings, structures and other improvements now or in the future located or to be constructed on the Land ( "Improvements "); and 1.3 all tenements, hereditaments, appurtenances, privileges and other rights and interests now or in the future benefitting or otherwise relating to the Land or RVPUB\KCV\646177 Exhibit E Pagel 03 2010683 the Improvements, including easements, rights -of -way, development rights, mineral rights, water rights and water stock ( "Appurtenances," and together with the Land and the Improvements, "Real Property "). 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following ( "Secured Obligations "): 2.1 all present and future indebtedness evidenced by the Note, including principal, interest and all other amounts payable under the terms of the Note; 2.2 all present and future obligations of Trustor to Beneficiary under this Deed of Trust; and 2.3 all additional present and future obligations of Trustor to Beneficiary under the Agreement, Regulatory Agreement, or any other agreement or instrument (whether existing now or in the future) which states that it is, or such obligations are, secured by this Deed of Trust; in each case as such indebtedness and other obligations may from time to time be supplemented, modified, amended, renewed and extended, whether evidenced by new or additional documents or resulting in a change in the interest rate on any indebtedness or otherwise. 3. Trustor's Covenants. To protect the security of this Deed of Trust, Trustor agrees as follows: 3.1 Payment and Performance of Secured Obligations; Purchase Agreement. Trustor shall pay and perform all Secured Obligations in accordance with the respective terms of such Secured Obligations, whether evidenced by or arising under this Deed of Trust or the Note. 3.2 Maintenance of Trust Estate. Unless Beneficiary otherwise consents in writing, Trustor shall: 3.2.1 keep the Trust Estate in good condition and repair, and promptly and in a good and workmanlike manner (and with new materials of good quality) complete any Improvements to be constructed on the Land, repair or restore any part of the Real Property that may be injured, damaged or destroyed, and repair, restore or replace any goods that maybe injured, damaged, destroyed or lost or that maybe or become obsolete, defective or worn out (except that Trustor shall not be required to repair, restore or replace any such goods of insignificant value which are not reasonably necessary or appropriate to the efficient operation of the Real Property), and in each case pay when due all valid claims for labor, service, equipment and material and any other costs incurred in connection with any such action; RVPUB\KCV\646177 Exhibit E Page 03 2010683 3.2.2 not remove, demolish or materially alter any Improvements; 3.2.3 not commit or permit any waste of any part of the Trust Estate; 3.2.4 comply in all material respects with all laws and other requirements, and not commit or permit any material violation of any laws or other requirements, which affect any part of the Trust Estate or require any alterations or improvements to be made to any part of the Trust Estate; 3.2.5 take such action from time to time as maybe reasonably necessary or appropriate, or as Beneficiary may reasonably require, to protect the physical security of the Trust Estate; 3.2.6 except as otherwise permitted by the Agreement, not part with possession of or abandon any part of the Trust Estate or cause or permit any interest in any part of the Trust Estate to be sold, transferred, leased, encumbered, released, relinquished, terminated or otherwise disposed of (whether voluntarily, by operation of law or otherwise); and 3.2.7 take all other action which may be reasonably necessary or appropriate to preserve, maintain and protect the Trust Estate, including the enforcement or performance of any rights or obligations of Trustor or any conditions with respect to any Rights. 3.3 Assignment of Rents, Issues and Profits. Trustor hereby assigns and transfers absolutely to the Beneficiary all of the rents from the Units and hereby gives to and confers upon the Beneficiary the right, power and authority to collect such rents at such times and upon the occurrence of such events as provided herein. Trustor irrevocably appoints the Beneficiary, its true and lawful attorney -in -fact, at its option, at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in its name or in the name of Trustor, for all such rents, and apply the same to the obligations secured hereby; provided, however, that Trustor shall have the right to collect such rents (but no more than one (1) month in advance unless the written approval has first been obtained), and to retain and enjoy the same, so long as an Event of Default shall not have occurred hereunder or, if occurred, be cured as provided hereunder. The assignment of rents in this Section 3.3 is intended to be an absolute assignment from Trustor to the Beneficiary and not merely the passing of a security interest. The foregoing power of attorney is coupled with an interest and cannot be revoked. 3.4 Insurance, Condemnation and Damage Claims. Trustor shall maintain the commercial, general liability and automobile insurance policies covering the Improvements and Real Property in the amounts set forth below: (a) $1,000,000 for anyone person; and RVPUB\KCV\646177 Exhibit E Page 03 2010083 { 7111 (b) $3,000,000 for any one occurrence; and (c) $1,000,000 for any property damage. The policies shall be "occurrence," not "claims made," policies and shall be primary and non- contributing to any insurance that the Beneficiary may elect to obtain. Such policies shall contain a full waiver of subrogation clause. The policies shall be issued by a carrier licensed to do business in California, with a then - current Best's rating of ANIH or better. Said policies shall provide that they shall not be canceled or reduced in types of coverage or amount of coverage without at least thirty (30) business days' prior written notice to the Beneficiary and that such reduction or cancellation shall become effective until at least twenty (20) business days after receipt by the Beneficiary of the written notice thereof. All proceeds of any claim, demand, award, settlement or other payment arising or resulting from or otherwise relating to any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property ( "Damage Claim ") are assigned and shall be payable and delivered to Beneficiary (any such proceeds of any Damage Claim being referred to in this Deed of Trust as "Damage Proceeds "). Trustor shall take all action reasonably necessary or required by Beneficiary in order to protect Trustor's and Beneficiary's rights and interests with respect to any Damage Claim, including the commencement of, appearance in and prosecution of any appropriate action or other proceeding, and Beneficiary may in its discretion participate in any such action or proceeding at the expense of Trustor. So long as no Event of Default, as defined in Section 3.9 of this Deed of Trust, has occurred and is continuing, Trustor may settle, compromise or adjust any Damage Claim with the prior written consent of Beneficiary (which shall not be unreasonably withheld). Upon the occurrence and during the continuance of any Event of Default, Beneficiary shall have the sole right to settle, compromise or adjust any Damage Claim in such manner as Beneficiary may determine, and for this purpose Beneficiary may, in its own name or in the name of Trustor, take such action as Beneficiary deems appropriate to realize on any such Damage Claim. In either case, all Damage Proceeds payable in connection with any such Damage Claim shall be delivered directly to Beneficiary as provided in the preceding paragraph. Any Damage Proceeds received by Beneficiary may be applied by Beneficiary in payment of the Secured Obligations in such order and manner as Beneficiary may determine, provided that so long as no Event of Default has occurred and is continuing, Beneficiary shall release such Damage Proceeds to Trustor for the Restoration of the Trust Estate in the Beneficiary's sole discretion, except that Beneficiary shall not be required to release such Damage Proceeds (and may apply such Damage Proceeds to the Secured Obligations as set forth above) to the extent that such Damage Proceeds relate to any condemnation, seizure or other appropriation by any governmental agency of all or any portion of the Trust Estate (including Damage Proceeds payable in lieu of any such action), or if Beneficiary has reasonably determined that the security of this Deed of Trust has been impaired, or will be impaired upon the release of Damage Proceeds to Trustor. 3.5 Liens and Taxes. Subject to the right of Trustor to contest any such payments in accordance with the terms of the Agreement, (i) Trustor shall pay, prior to delinquency, all taxes, RVPUB\KCV\646177 Exhibit E Page 03 2010683 4 if any, which are or may become a lien affecting any part of the Trust Estate (including assessments on appurtenant water stock), and (ii) Trustor shall pay and perform when due all other obligations secured by or constituting a lien affecting any part of the Trust Estate. 3.6 Actions. Trustor shall appear in and defend any claim or any action or other proceeding purporting to affect title or other interests relating to any part of the Trust Estate, the security of this Deed of Trust or the rights or powers of Beneficiary or Trustee, and give Beneficiary prompt written notice of any such claim, action or proceeding. Beneficiary and Trustee may, at the expense of Trustor, appear in and defend any such claim, action or proceeding and any claim, action or other proceeding asserted or brought against Beneficiary or Trustee in connection with or relating to any part of the Trust Estate or this Deed of Trust. 3.7 Action by Beneficiary or Trustee. If Trustor fails to perform any of its obligations under this Deed of Trust, Beneficiary or Trustee may, but without any obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any obligations under this Deed of Trust, and at the expense of Trustor: (a) perform such obligations in such manner and to such extent and make such payments and take such other action as either may deem necessary in order to protect the security of this Deed of Trust, Beneficiary or Trustee being authorized to enter upon the Property for such purposes; (b) appear in and defend any claim or any action or other proceeding purporting to affect title or other interests relating to any part of the Trust Estate, the security of this Deed of Trust or the rights or powers of Beneficiary of Trustee; and (c) pay, purchase, contest or compromise any lien or right of others which in the reasonable judgment of either is or appears to be or may for any reason become prior or superior to this Deed of Trust. If Beneficiary or Trustee shall elect to pay any such lien or right of others or any taxes which are or may become a lien affecting any part of the Trust Estate or make any other payments to protect the security of this Deed of Trust, Beneficiary or Trustee may do so without inquiring into the validity or enforceability of any apparent or threatened lien, right of others or taxes, and may pay any such taxes in reliance on information from the appropriate taxing authority or public office without further inquiry. 3.8 Obligations With Respect to Trust Estate. Neither Beneficiary nor Trustee shall be under any obligation to preserve, maintain or protect the Trust Estate or any of Trustor's rights or interests in the Trust Estate, or make or give any presentments, demands for performance, protests, notices of nonperformance, protest or dishonor or other notices of any kind in connection with any Rights, or take any other action with respect to any other matters relating to the Trust Estate. Beneficiary and Trustee do not assume and shall have no liability for, and shall not be obligated to perform, any of Trustor's obligations with respect to any Rights or any other matters relating to the Trust Estate, and nothing contained in this Deed of Trust shall release Trustor from any such obligations. 3.9 Default. An "Event of Default" shall be deemed to occur upon any material breach of an obligation under any of the following: (i) this Deed of Trust; (ii) the Note; (iii) the Agreement; or (iv) the Regulatory Agreement, if the breach is not cured within ten (10) business days after Trustor receives initial notice of such breach. Furthermore, any event defined as a "Default" or "Event of Default" under the Note, the Agreement or the Regulatory Agreement shall constitute an Event of Default under this Deed of Trust. RVPUB\KCV\646177 Exhibit E Q 2010683 Page 5 u.. F� { Upon the occurrence of any Event of Default: (i) Trustor shall be in default under this Deed of Trust, and all Secured Obligations shall immediately become due and payable without further notice to Trustor; (ii) upon demand by Beneficiary, Trustor shall pay to Beneficiary, in addition to all other payments specifically required under the Note, in monthly installments, at the times and in the amounts required by Beneficiary from time to time, sums which when cumulated will be sufficient to pay one month prior to the time the same become delinquent, all Taxes which are or may become a Lien affecting the Trust Estate and the premiums for any policies of insurance to be obtained hereunder (all such payments to be held in a cash collateral account as additional security for the Secured Obligations over which Beneficiary shall have sole and exclusive control and right of withdrawal); and (iii) Beneficiary may, without notice to or demand upon Trustor, which are expressly waived by Trustor (except for notices or demands otherwise required by applicable Laws to the extent not effectively waived by Trustor and any notices or demands specified below), and without releasing Trustor from any of its Obligations, exercise any one or more of the following Remedies as Beneficiary may determine: 3.9.1 Beneficiary may, either directly or through an agent or court- appointed receiver, and without regard to the adequacy of any security for the Secured Obligations: (i) enter, take possession of, manage, operate, protect, preserve and maintain, and exercise any other rights of an owner of the Trust Estate, and use any other properties or facilities of Trustor relating to the Trust Estate, all without payment of rent or other compensation to Trustor; (ii) enter into such contracts and take such other action as Beneficiary deems appropriate to complete all or any part of any construction which may have commenced on the Land, subject to such modifications and other changes in the plan of development as Beneficiary may deem appropriate; (iii) make, cancel, enforce or modify leases, obtain and evict tenants, fix or modify rents and, in its own name or in the name of Trustor, otherwise conduct any business of Trustor in relation to the Trust Estate and deal with Trustor's creditors, debtors, tenants, agents and employees and any other Persons having any relationship with Trustor in relation to the Trust Estate, and amend any contracts between them, in any manner Beneficiary may determine; (iv) endorse, in the name of Trustor, all checks, drafts and other evidences of payment relating to the Trust Estate, and receive, open and dispose of all mail addressed to Trustor and notify the postal authorities to change the address for delivery of such mail to such address as Beneficiary may designate; and xvPUB\ccv\646177 Exhibit E 03 2010683 �� 11 /0 (v) take such other action as Beneficiary deems appropriate to protect the security of this Deed of Trust. Beneficiary's agent or court- appointed receiver shall hold all monies and proceeds, including, without limitation, proceeds from the sale of the Trust Estate or any portion thereof, for the benefit of the Trustor and shall not disburse the monies or proceeds for the satisfaction of the Secured Obligations without the prior written consent of Beneficiary. The Beneficiary's agent or court- appointed receiver may, but without any obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from any Obligations under this Deed of Trust, and at the expense of Trustor, follow the written instruction of Beneficiary under this Section 3.9. 3.9.2 Beneficiary may execute and deliver to Trustee written declaration of default and demand for sale and written notice of default and of election to cause all or any part of the Trust Estate to be sold, which notice Trustee shall cause to be filed for record; and after the lapse of such time as may then be required by law following the recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell such Trust Estate at the time and place fixed by it in such notice of sale, either as a whole or in separate parcels and in such order as Beneficiary may direct ( Trustor waiving any right to direct the order of sale), at public auction to the highest bidder for cash in lawful money of the United States (or cash equivalents acceptable to Trustee to the extent permitted by applicable law), payable at the time of sale. Trustee may postpone the sale of all or any part of the Trust Estate by public announcement at such time and place of sale, and from time to time after any such postponement may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser at such sale its deed conveying the Trust Estate so sold, but without any covenant or warranty, express or implied, and the recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustee or Beneficiary, may purchase at such sale, and any bid by Beneficiary may be, in whole or in part, in the form of cancellation of all or any part of the Secured Obligations. Any such sale shall be free and clear of any interest of Trustor and any lease, encumbrance or other matter affecting the Trust Estate so sold which is subject or subordinate to this Deed of Trust, except that any such sale shall not result in the termination of any such lease, (i) if and to the extent otherwise provided in any estoppel or other agreement executed by the tenant and Beneficiary (or executed by the tenant in favor of, and accepted by, Beneficiary), or (ii) if the purchaser at such sale gives written notice to the tenant, within thirty (30) business days after date of sale, that the lease will continue in effect. 3.9 .3 Beneficiary may proceed to protect, exercise and enforce any and all other Remedies provided under the Note, the Agreement, the Regulatory Agreement, this Deed of Trust or by applicable Laws. All proceeds of collection, sale or other liquidation of the Trust Estate shall be applied first to all costs, fees, expenses and other amounts (including interest) payable by Trustor under this Deed of Trust and to all other Secured Obligations not otherwise repaid in such order and manner as Beneficiary may determine, and the remainder, if any, to the Person or Persons legally entitled thereto. RVPUB\KCV\646177 Exhibit E 03 2010683 Page 7 t, } 711510 Each of the Remedies provided in this Deed of Trust is cumulative and not exclusive of, and shall not prejudice, any other Remedy provided in this Deed of Trust or by applicable Laws. Each Remedy may be exercised from time to time as often as deemed necessary by Trustee and Beneficiary, and in such order and manner as Beneficiary may determine. This Deed of Trust is independent of any other security for the Secured Obligations, and upon the occurrence of an Event of Default, Trustee or Beneficiary may proceed in the enforcement of this Deed of Trust independently of any other Remedy that Trustee or Beneficiary may at any time hold with respect to the Trust Estate or the Secured Obligations or any other security. Trustor, for itself and for any other Person claiming by or through Trustor, waives, to the fullest extent permitted by applicable Laws, all rights to require a marshaling of assets by Trustee or Beneficiary or to require Trustee or Beneficiary to first resort to any particular portion of the Trust Estate or any other security (whether such portion shall have been retained or conveyed by Trustor) before resorting to any other portion, and all rights of redemption, stay and appraisal. Upon the occurrence of a transfer of the Trust Estate or any part of it or interest in it is transferred, sold, or alienated ( "Event of Default "), Trustor shall be in default under this Deed of Trust and the Note shall become due and payable without further notice to Trustor at the option of the Beneficiary. 3.10 Costs, Fees and Expenses. Trustor shall pay, on demand, all costs, fees, expenses, advances, charges, losses and liabilities of Trustee and Beneficiary under or in connection with this Deed of Trust or the enforcement of, or the exercise of any Remedy or any other action taken by Trustee or Beneficiary under, this Deed of Trust or the collection of the Secured Obligations, in each case including: (a) reconveyance and foreclosure fees of Trustee; (b) costs and expenses of Beneficiary or Trustee or any receiver appointed under this Deed of Trust in connection with the operation, maintenance, management, protection, preservation, collection, sale or other liquidation of the Trust Estate or foreclosure of this Deed of Trust; (c) advances made by Beneficiary to complete or partially construct all or any part of any construction which may have commenced on the Land or otherwise to protect the security of this Deed of Trust; (d) cost of evidence of title; and (e) the reasonable fees and disbursements of Trustee's and Beneficiary's legal counsel and other out - of- pocket expenses, and the reasonable charges of Beneficiary's internal legal counsel. 3.11 Late Payments. By accepting payment of any part of the Secured Obligations after its due date, Beneficiary does not waive its right either to require prompt payment when due of all other Secured Obligations or to declare a default for failure to so pay. 3.12 Action by Trustee. At any time and from time to time upon written request of Beneficiary and presentation of this Deed of Trust for endorsement, and without affecting the personal liability of any Person for payment of the Secured Obligations or the security of this Deed of Trust for the full amount of the Secured Obligations on all property remaining subject to this Deed of Trust, Trustee may, without notice and without liability for such action, and notwithstanding the absence of any payment on the Secured Obligations or any other consideration: (a) reconvey all or any part of the Trust Estate; (b) consent to the making and recording, or either, of any map or plat of the Land; (c) join in granting any easement affecting the Land; or (d) join in or consent to any RVPUB\KCV\646177 Exhibit E Pages 03 2010683 711510 extension agreement or any agreement subordinating the Lien of this Deed of Trust. Trustee is not obligated to notify Trustor or Beneficiary of any pending sale under any other deed of trust or of any action or other proceeding in which Trustor, Beneficiary or Trustee is a party unless brought by Trustee. 3.13 Reconveyance. Upon written request of Beneficiary and surrender of this Deed of Trust and the Note to Trustee for cancellation or endorsement, and upon payment of its fees and charges, Trustee shall reconvey, without warranty, all or any part of the property then subject to this Deed of Trust. Any reconveyance, whether full or partial, may be made in terms to "the person or persons legally entitled thereto," and the recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. Beneficiary shall not be required to cause any property to be released from this Deed of Trust until final payment and performance in full of all Secured Obligations and termination of all obligations of Beneficiary under or in connection with the Note or until the Secured Obligations are forgiven. 3.14 Substitution of Trustee. Beneficiary may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named in or acting under this Deed of Trust, which instrument, when executed by Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Land is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees who shall, without conveyance from the predecessor Trustee, succeed to all of its title, estate, rights, powers and duties. Such instrument must contain the name of the original Trustor, Trustee and Beneficiary, the book and page where this Deed of Trust is recorded (or the date of recording and instrument number) and the name and address of the new Trustee. 3.15 Attorney -in -Fact. Trustor appoints Beneficiary as Trustor's attorney -in -fact, with full authority in the place of Trustor and in the name of Trustor or Beneficiary, to take such action and execute such Documents as Beneficiary may reasonably deem necessary or advisable in connection with the exercise of any Remedies or any other action taken by Beneficiary or Trustee under this Deed of Trust. 3.16 Successors and Assigns. This Deed of Trust applies to and shall be binding on and inure to the benefit of all parties to this Deed of Trust and their respective successors and assigns. 3.17 Acceptance. Notice of acceptance of this Deed of Trust by Beneficiary or Trustee is waived by Trustor. Trustee accepts this Deed of Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. 3.18 Beneficiary's Statements. For any statement regarding the Secured Obligations, Beneficiary may charge the maximum amount permitted by law at the time of the request for such statement. 3.19 Governing Law. This Deed of Trust shall be governed by, and construed and enforced in accordance with, the Laws of California. RVPUB\KCV\646177 Exhibit E Page 03 2-0,10,683 4, , �i' 7/ 3.20 Request for Notice. Trustor requests that a copy of any notice of default and a copy of any notice of sale be mailed to Trustor at Trustor's address set forth above. [Signatures on Following Pages] RVPUB\KCV\646177 Exhibit E Page 10 03 2010683 w "TRUSTOR" ARCADIA HERITAGE PARK, LP a California limited partnership By: ASL ARCADIA, INC. a California corporation Its: Development General Partner Roger Davila Vice - President By: HERITAGE COMMUNITY HOUSING, INC. a California non - profit corporation Its: Managing General Partner an John Biglcy Executive Vice - President By: AMERICAN SENIOR LIVING, INC. a California corporation Its: Developer LIM Roger Davila Vice - President RVPUB\KCV\646177 Exhibit E Page 11 03 2010683 rr O ATTEST: Agency Secretary APPROVED AS TO LEGAL FORM BEST BEST & KRIEGER LLP IN Agency Counsel "BENEFICIARY" THE ARCADIA REDEVELOPMENT AGENCY a public body, corporate and politic William Kelly Executive Director RVPUB\KCV\646177 Exhibit E 03 2010683 Page 12 EXHIBIT A TO DEED OF TRUST AND ASSIGNMENT OF RENTS Legal Description of Land RVPUB\KCV\646177 Exhibit E Page 13 03 2010683 Z=Z STATE OF CALIFORNIA COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared , personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public CAPACITY CLAIMED BY SIGNER: Corporate Officer(s) Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness Guardian /Cmservator Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) RVPUB\KCV\646177 Exhibit E } d 3 Page 14 (168- r 1 •:►1 COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared , personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public RVPUB\KCV\646177 Exhibit E Page 15 Corporate Officer(s) Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness Guardian /Conservator Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) r01iC��! EXHIBIT F TO I(, HERITAGE PARK OWNER PARTICIPATION AGREEMENT /LOAN AGREEMENT Certificate of Completion 03 20:1003 RVPUB\KCV\646177 Exhibit F n RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The Arcadia Redevelopment Agency 240 West Huntington Drive Post Office Box 60021 Arcadia, California 91006 -6021 Attn: Executive Director [Fee Exempt -Govt. Code '61031 (Space above for Recorder's Use) CERTIFICATE OF COMPLETION I, William Kelly, Executive Director of the Arcadia Redevelopment Agency ( "Agency "), certify as follows: By its Resolution No. , adopted and approved , 2003, the Agency resolved as follows: Section 1. The affordable senior housing project ( "Project ") required to be constructed in accordance with that certain Heritage Park Owner Participation Agreement/Loan Agreement ( "Agreement ") dated as of January 21, 2003, between the Agency and by Arcadia Heritage Park, L.P., a California limited partnership ( "Owner ") on that certain real property consisting of the Property ( "Property ") described on the attached Exhibit A has been completed in accordance with the provisions of the Agreement. The Agreement was recorded on , as Instrument No. Section 2. Pursuant to Section 4.14 of the Agreement, this Certificate of Completion is a conclusive determination of the satisfactory completion of the Owner's obligations under the Agreement with respect to the completion of the Project, including all buildings, parking improvements, landscaping and related improvements necessary to support the Project and its use and occupancy upon the Property; provided, however, that the Agency may enforce any covenants and obligations surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement. The Agreement is an official record of the Agency and a copy of the Agreement maybe inspected in the office of the Secretary of the Agency, located at 240 West Huntington Drive, Arcadia, California 91006 -6021, during regular business hours. [Signatures on Following Page] RVPUB\KCV\646177 Exhibit F Pagel 03 2010683 DATED AND ISSUED this day of ATTEST: I' Agency Secretary By: William Kelly Executive Director RVPUB\KCV\646177 Exhibit F Page 2 2010683 k STATE OF CALIFORNIA COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared , personally Mown to me OR 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. WITNESS my hand and official seal. Signature of Notary Public RVPUB\KCV\646177 Exhibit F Page 3 BY SIGNER: Corporate Officer(s) Partner(s) Attorney -in -Fact Trustee(s) Subscribing Witness Guardian /Conservator Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) 03 2010683 r f f ;, STATE OF CALIFORNIA COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared , personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public Corporate Officer(s) Partner(s) Attorney -in -Fact — Trustee(s) Subscribing Witness Guardian /Conservator — Other SIGNER IS REPRESENTING. NAME OF PERSON(S) OR ENTITY(IES) RVPUB\-KCV\646177 Exhibit F Page 03 2010683 EXHIBIT A TO CERTIFICATE OF COMPLETION Legal Description of Property RVPUB\KCV\646177 Exhibit F Page 5 0 3 2010683 CJ, EXHIBIT G TO HERITAGE PARK OWNER PARTICIPATION AGREEMENT /LOAN AGREEMENT Regulatory Agreement and Declaration of Restrictive Covenants xvPUB\KCV\646177 Exhibit G 03 2010683 �r µ 711'x; RECORDED AT THE REQUEST OF AND WHEN RECORDED MAIL TO: The Arcadia Redevelopment Agency 240 West Huntington Drive Post Office Box 60021 Arcadia, California 91006 -6021 Attn: Executive Director [Fee Exempt Govt Code Section 61031 (Space above for Recorder's Use) HERITAGE PARK REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS between THE ARCADIA REDEVELOPMENT AGENCY a public body, corporate and politic and ARCADIA HERITAGE PARK, L.P. a California limited partnership [Dated as of January 21, 2003, for reference purposes only] RVPUB\KCV\646177 Exhibit G Page 1 03 20:10683 �* 7115l01 "l'! HERITAGE PARK REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS HERITAGE PARK REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS ('Regulatory Agreement ") is dated as of January 21, 2003, for reference purposes only, and is by and between (i) THE ARCADIA REDEVELOPMENT AGENCY ( "Agency "), a public body, corporate and politic; and (ii) by ARCADIA HERITAGE PARK, L.P. ( "Owner "), a California limited partnership. RECITALS A. Agency and the Owner have entered into those certain agreements entitled: (i) "Heritage Park Owner Participation Agreement / Loan Agreement" ( "Agreement ") dated as of January 21, 2003; (ii) "Promissory Note" ( "Note ") dated as of January 21, 2003; and (iii) "Deed of Trust with Assignment of Rents" ( "Trust Deed "), dated as of January 21, 2003. The Agreement, Note, Trust Deed shall hereinafter be collectively referred to as the 'Related Agreements." B. Pursuant to the Agreement, Owner will construct a fifty four (54) unit multi - family senior residential housing project to be commonly known as the Heritage Park Senior Housing Project ( "Project ") on real property ( "Property ") legally described on the attached Exhibit A and commonly knows as 150 West Las Tunas Drive, within the City of Arcadia, California. C. Owner is willing to enter into this Regulatory Agreement to assure the Agency of the operation of the Project for the purposes of increasing and improving the community's supply of very low- and low - income housing. D. Under the provisions of the California Community Redevelopment Law (California Health & Safety Code Sections 33000 et seq.), the Agency is required to set aside twenty percent (20 %) of its general property tax increment allocation to be used for the purposes of increasing, providing and preserving the community supply of low- and moderate - income housing available at affordable housing costs to persons of low- and moderate - income. E. Pursuant to the provisions of California Health & Safety Code Section 33334.3, such funds as must be held in a separate low and moderate - income housing fund ( "Housing Fund ") until used. F. Owner has requested that Agency provide funds from its Housing Fund to assist in the acquisition, development and operation of the Project. G. Owner has agreed that, in return for financial assistance from the City and the Agency, Owner will construct, operate and maintain the Project to provide apartment units at affordable rents for senior persons of very low- and low- income. RVPUS\KCV\646177 Exhibit G Page 03 2010683 :.x Rte...... 15 31 H. Owner has requested and will receive the referenced financial assistance frc and the Agency in connection with Owner's construction of the Project. I. As a condition to the willingness of the Agency to provide such financial as: the City for the benefit of the Owner and the Project, Owner has agreed to rent or lea,, available for rent or occupancy, fifty three (53) of the available apartment Units within t for rent to senior persons of very low- and low - income, all for the public purpose of assi, individuals to afford the cost of decent, safe, and sanitary housing. To facilitate the same, willing to enter into certain restrictions upon the ownership and operation of the Project ti bind the Project and Owner, its successors and assigns, for the entire term of this F Agreement. The purpose of this Regulatory Agreement is to create such easements, c covenants, restrictions, liens, servitudes, and charges in favor of the Agency upon and which the Project and each and every part and portion thereof shall be occupied, owned, rr held, leased, rented, sold, and conveyed. The provisions of this Regulatory Agreement sha each and every portion of the Proj ect and shall inure to and pass with each and every porti; and shall apply to and bind any successors -in- interest of Owner. Each of the provision imposed upon the Project as mutual and reciprocal equitable servitudes in favor of each other portion of the Project. NOW, THEREFORE, in consideration of the mutual covenants and undertakint herein and other good and valuable consideration, the receipt and sufficiency of which acknowledged, the Agency and the Owner hereby agree as follows: ARTICLE 1. DEFINITIONS AND INTERPRETATION 1.1 General Definitions. Initially capitalized terms used herein shall have the meanings unless the context in which they are used clearly requires otherwise. 1.2 Income Restrictions; Definitions. "Affordable Rent" shall mean a the monthly rent charged to a Qualifying Househo` which shall be no greater than that allowed as an "affordable rent" by California Healt` Code Section 50053, as amended or substituted, for the Qualifying Household. "Agency" shall mean the Arcadia Redevelopment Agency. "City" shall mean the City of Arcadia. "HUD" shall mean the United State Department of Housing and Urban Develo "Median Income" shall mean the median income adjusted by actual househ published annually by HUD for the County of Los Angeles, which Median Income lev . adjusted in the future concurrently with publication of adjustment of the same by HUD "Qualified Household" means households meeting all of the following criteria: RVPUB\KCV\646177 Exhibit G Page 03 2010683 4lfV (1) At least one of the residents in the household is sixty -two (62) years of age or older; (ii) Every member of the household who is not sixty -two (62) years of age or older as described in (i) above shall be a "Qualified Permanent Resident" or a "Permitted Health Care Resident," as defined by California Civil Code Section 51.3(c)(2) and (6), respectively; (iii) Which qualifies as persons of very low income, as provided by California Health & Safety Code Section 50105, as those sections may be amended and /or substituted from time to time; and (iv) At the commencement of the occupancy of a Unit, the maximum allowable household income was either (i) equal to (or less than) fifty percent (50 %) of Median Income, or (ii) equal to (or less than) sixty percent (60 %) of Median Income. "Units" means the apartment dwelling units in the Project. "Project" is the fifty four (54) unit multi - family senior residential rental apartment complex to be located at 150 West Las Tunas Drive, within the City, together with structures, improvements, equipment, fixtures, and other personal property owned by the Owner and located on or used in comlection with all such improvements and all functionally related and subordinate facilities. "Related Agreements" means the Agreement, the Note, and the Trust Deed. 1.3 Rules of Construction. 1.3.1 The singular form of any word used herein, including the terms defined herein shall include the plural and vice versa. The use herein of a word of any gender shall include correlative words of all genders. 1.3.2 Unless otherwise specified, references to Articles, Sections, and other subdivisions of this Regulatory Agreement are to the designated Articles, Sections, and other subdivisions of this Regulatory Agreement as originally executed. The words "hereof," "herein," "hereunder," and words of similar import shall refer to this Regulatory Agreement as a whole. 1.3.3 All of the terms and provisions hereof shall be construed to effectuate the purposes set forth in this Regulatory Agreement and to sustain the validity hereof. 1.3.4 Headings or titles of the several articles and sections hereof and the table of contents appended to copies hereof shall be solely for convenience of reference and shall not affect the meaning, construction, or effect of the provisions hereof. RVPUB\KCV\646177 Exhibit G Page 03 2010683 11�IC 1.3.5 This Regulatory Agreement and the Related Agreements shall beat all times interpreted, administered and enforced in compliance with California Civil Code Section 51.3, as the same may be from time to time amended or substituted. In the event of any conflict between this Regulatory Agreement or the Related Agreements and any provision of California Civil Code Section 51.3, the provisions of California Civil Code Section 51.3 shall govern and control over any inconsistent or conflicting term or provision, but only to the extent of such conflict or inconsistency. ARTICLE 2. ONGOING PROJECT OBLIGATIONS 2.1 Binding for Term. The provisions of this Regulatory Agreement shall apply to the Project throughout the entire term hereof, as established in Section 3.1 below. The parties agree that in the event of a default by Owner which is not remedied, if provisions for remedy are provided to Owner, the Agency shall be entitled to all relief to which it would be entitled by virtue of a default under any of the provisions hereof. 2.2 General Use Restrictions. The Project will be used only for purposes consistent with this Regulatory Agreement and the Related Agreements, subject to the affordability and income restrictions set forth herein. 2.3 Residential Rental Property. Owner represents, warrants, and covenants to operate the Project as residential rental property. The Project will be held and used for the purpose of providing senior residential housing, and Owner shall own, manage and operate, or cause the management and operation of, the Project to provide senior rental housing and for no other purposes. As used herein, facilities functionally related and subordinate to the Proj ect include facilities for use by the tenants thereof, including for example, swimming pools, other recreational facilities and meeting rooms, parking areas, and other facilities which are reasonably required for the Project (heating and cooling equipment, trash disposal equipment and the Unit for residential managers or maintenance personnel). Owner will not knowingly permit any of the Units to be used on a transient basis and will not rent any such Unit for a period of less than thirty (30) consecutive calendar days, and none of the Units will at any time be leased or rented for use as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, assisted living facility, skilled nursing facility, congregate care facility, adult day care facility, sanitary or rest home, or trailer court or park. 2.4 Marketing, Application and Tenant Selection Plan. Owner shall comply with the Marketing, Application and Tenant Selection Plan attached as Exhibit D, and with any amendment thereto which are imposed by any state or federal agency. The Marketing, Application and Tenant Selection Plan is incorporated herein by this reference. 2.5 Qualified Household.Fifty three (53) of the Units will be occupied or available for occupancy by Qualified Households at Affordable Rents on a continuous basis. Qualified Households are those who qualify to occupy one (1) of the fifty -three (53) Units pursuant to the provisions of this Regulatory Agreement and the Related Agreements. Eleven (11) of the fifty -three (53) Units shall be occupied by Qualified Households whose maximum allowable income, at the commencement of the occupancy of a Unit, is equal to (or less than) fifty percent (50 %) of Median RVPUB\KCV\646177 Exhibit G Page 03 2010683 115 1 Income. Forty -two (42) of the fifty -three (53) Units shall be occupied by Qualified Households whose maximum allowable income, at the commencement of the occupancy of a Unit, is equal to (or less than) sixty percent (60 %) of Median Income Owner will advise the Agency on an annual or other periodic basis in writing of occupancy of Units by Qualified Households by delivery of a certificate in a form specified by such entity. For the purposes of this Regulatory Agreement, a Unit occupied by an individual who, at the commencement of the occupancy was a Qualified Household, is treated as occupied by a Qualified Household during their occupancy of such Unit until they cease to be qualified as a Qualified Household. Moreover, a Unit occupied by a Qualified Household shall be deemed, upon termination of such Qualified Household's occupancy (whether voluntarily or involuntarily), to be continuously occupied by a Qualified Household until reoccupied. Owner will also obtain and maintain on file such Certifications of Tenant Eligibility in form similar to Exhibit B attached hereto and incorporated herein by reference, for each Qualified Household as the Agency may, from time to time, require. Owner shall make a good faith effort to verify that the income provided by an applicant in an income certification is accurate by taking any one or more as necessary of the following steps as part of the verification process: (i) Obtain a pay stub for the most recent pay period; (ii) Obtain an income tax return for the most recent tax year; (iii) Obtain an income verification form from the applicant's current employer; (iv) Obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of those agencies; or (v) If the applicant is unemployed and has no tax return, obtain another form of independent verification. Owner will prepare and submit to the Agency, at such periodic frequency as they might require, a Certificate of Continuing Program Compliance in a form similar to Exhibit C hereto certifying: (i) all the Units were occupied by Qualified Households or held vacant and available for occupancy by Qualified Households during such period; and (ii) that to the knowledge of the Owner, no default has occurred under the provisions of this Regulatory Agreement or the Related Agreements. Owner will also prepare and submit to the Agency a report in form and substance satisfactory to the Agency, each year for the preceding calendar year, summarizing the vacancy rate of the Units and of the Project on a month -to -month basis for such calendar year, in a form meeting the Agency's reporting obligations under California Health & Safety Code Section 33418. Owner will accept as tenants of the Project, on the same basis as all other prospective tenants, Qualified Households who are recipients of Federal certificates and/or vouchers for rent RVPUB\KCV\646177 Exhibit G Page 6 03 2010683 r .ry g �R (l subsidies pursuant to an existing program under Section 8 of the United States Housing Act of 1937 or its successor, and shall not apply selection criteria to Section 8 certificate holders that are more burdensome than the criteria applied to all other prospective tenants. The provisions of rental to Qualified Households set forth in this Article 2 shall apply during the entire term of this Regulatory Agreement. 2.6 Availability of Units. During the term of this Regulatory Agreement, fifty three (53) of the Units shall be occupied or available for occupancy by Qualifying Households. Eleven (11) of the fifty -three (53) Units shall be occupied by Qualified Households whose maximum allowable income, at the commencement of the occupancy of a Unit, is equal to (or less than) fifty percent (50 %) of Median Income. Forty -two (42) of the fifty -three (53) Units shall be occupied by Qualified Households whose maximum allowable income, at the commencement of the occupancy of a Unit, is equal to (or less than) sixty percent (60 %) of Median Income. 2.7 Rent Increases. Rent for Qualifying Households may be increased only once per year by an amount equal to the maximum increase which would still maintain the rent as an Affordable Rent for the income category of the Qualifying Household occupying the Property. 2.8 Lease Provisions. The form of lease or rental agreement used by the Owner for the lease or rental of Units shall be subject to review and approval by the Agency, the approval of which shall not be unreasonably withheld. The Owner shall include provisions in leases or rental agreements for all Units which authorize the Owner to immediately terminate the tenancy of any Qualified Household occupying a Unit where one or more of such Qualified Households have misrepresented any fact material to the qualification of such an individual as a Qualified Household and/or for qualification for occupancy of a Unit. Each lease or rental agreement shall also provide that the tenants of such Unit shall be subject to annual certification or recertification of income and subject to rental increases in accordance with Section 2.6. Each lease or rental agreement shall also provide that the Owner will not discriminate on the basis of race, creed, color, sex, national origin, ancestry, religion, marital status, age, disability or receipt of public assistance or housing assistance in connection with a rental of a Unit, or in connection with the employment or application for employment of persons for operation and management of the Project, and all contracts, applications and leases entered into for such purposes shall contain similar nondiscriminatory clauses to such effect. 2.9 Tenant Income Certification. On an annual basis and as required by Section 2.4 above, the Owner shall obtain, complete and maintain on file Certificates of Tenant Eligibility from each Qualified Household. Copies of such certificates shall be made available for review by the Agency, upon request and upon reasonable notice. 2.10 Security Deposits. The Owner shall not require security deposits on Units in excess of one - month's rent for such Unit. Such deposits may be paid by the Qualifying Household in not more than four (4) installments, as approved by the Owner or Management Agent in its reasonable discretion. RVPUB\KCV\646177 Exhibit G Pagel 03 2-010683 2.11 Additional Information; Books and Records. Owner shall provide any additional information concerning the Units reasonably requested by the Agency. The Agency shall have the right to examine and make copies of all books, records or other documents maintained by Owner or by any of Owner's agents which pertain to any Unit. 2.12 Specific Enforcement of Affordability Restrictions. The affordability restrictions contained in this Regulatory Agreement and the Related Agreements shall remain in full force and effect for a period of at least fifty five (55) years from the date the first final and permanent certificate of occupancy is issued for the Project. Owner hereby agrees that specific enforcement of Owner's agreement to comply with the affordable rent and occupancy restrictions of this Article 2 is one of the reasons for the financial contribution of the Agency to assist Owner to complete the Project and that, in the event of Owner's breach of such requirements, potential monetary damages to the Agency, as well as to prospective Qualified Households, would be difficult, if not impossible, to evaluate and quantify. Therefore, in addition to any other relief to which the Agency may be entitled as a consequence of the breach hereof, Owner agrees to the imposition of the remedy of specific performance against it in the case of any event of default by Owner in complying with the allowable rent, occupancy restrictions or any other provision of this Article 2. 2.13 Indemnity. Owner hereby agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the Agency), the Agency, the City and their board members, officers, and employees from and against any and all claims, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action requirements, enforcement actions of any kind, and all costs and expenses incurred in connection therewith (including, but not limited to, attorneys' fees and expenses), arising directly or indirectly, in whole or in part, out of any activity carried on or undertaken on or off the Project. This Section 2.13 shall survive termination or expiration of this Regulatory Agreement. 2.14 No Limitation. The Owner hereby acknowledges and agrees that the Owner's duties, obligations and liabilities under this Regulatory Agreement, including without limitation, under Section 2.13 above, are in no way limited or otherwise affected by any information the Agency may have concerning the Project, whether the Agency obtained such information from the Owner or from its own investigations. 2.15 Management Allent. 2.15.1 Management. Owner, and the management agent (if not the Owner), shall operate the Proj ect in a manner that will provide decent, safe and sanitary residential facilities to the occupants thereof, and will comply with all the provisions of this Regulatory Agreement and the Related Agreements, and of any other applicable contract or agreement between the Agency, the City and the Owner. The Owner shall be the initial "Management Agent" of the Project. The Owner may retain, at no cost or expense to the Agency, on -site personnel and other consultants and service providers to assist Owner to operate the Project effectively and in compliance with the provisions of this Regulatory Agreement and the Related Agreements and state and federal law. Owner may not terminate its self - management of the Project without the prior approval of the Agency, which may be given or withheld in the Agency's sole and absolute discretion. RVPUB\KCV\646177 Exhibit G Page 8 03 2010683 i SIC!, 1 2.15.2 Removal of Management Agent. If Agency determines in its reasonable judgment that the Project is not being operated or managed in accordance with all the requirements and standards of this Regulatory Agreement or the Related Agreements or other applicable laws and ordinances, then the Agency may deliver written notice to the Owner setting forth with reasonable detail the nature of the deficiencies. Within ten (10) business days following the Owner's receipt of such notice, the Agency and the Owner shall meet and confer in good faith concerning the nature of the Agency's alleged deficiencies and the actions which the Agency believes necessary to cure such deficiencies. Within thirty (30) business days from the conclusion of such discussions, the Owner shall cure such deficiencies and shall ensure that such deficiencies do not recur. If such deficiencies are not cured within said thirty (30) business day period, or if such deficiencies recur at a future date, the Agency may, at its option, require the Owner to replace the Management Agent with another Management Agent selected by the Owner in its reasonable discretion, provided, that the Owner shall ensure that such replacement Management Agent has the necessary skills, experience and financial ability to operate and manage the Project in accordance with all of the requirements and standards of this Regulatory Agreement, the Related Agreements and all other applicable laws and ordinances. Any contract for the operation or management of the Project entered into by the Owner shall provide that such contract shall be terminated upon thirty (30) business days' notice, with or without cause. The Owner's failure to remove and replace a Management Agent in accordance with the provisions of this Section 2.15 shall constitute an event of default under this Regulatory Agreement and the Related Agreements. 2.15.3 Performance Review. Upon the request of the Agency, which request shall be in writing, the Owner shall cooperate with the Agency in the periodic review of the management practices and financial status of the Units, but not more frequently than on a quarterly basis, and at least on an annual basis. The purpose of each periodic review will be to enable the Agency to determine if the Units within the Project are being operated and managed in accordance with the requirements and standards of this Regulatory Agreement and the Related Agreements. Results of such review by the Agency shall be provided to Owner. The Agency shall have the express authority to contact the Qualified Households by telephone, letter or in person to assess the performance of the Management Agent. 2.15.4 Management Policies. The Owner shall deliver to the Agency a copy of the Owner's or Management Agent's general rental policies and procedures manual, together with any modifications or supplements thereto, adopted by the Owner or the Management Agent from time to time. 2.16 Insurance Requirements. 2.16.1 Required Coverage. The Owner shall maintain and keep in force, at the Owner's sole cost and expense, the following insurance applicable to the Project: RVPUB\KCV\646177 Exhibit G Page 03 201068 1 p) 2.16.1.1 Comprehensive general liability insurance with limits not less than $1,000,000 for each occurrence, combined single limit for bodily injury and property damage, including coverages for contractual liability, personal injury, broad form property damage, products and completed operations. 2.16.1.2 Comprehensive automobile liability insurance with limits not less than $1,000,000 for each occurrence, combined single limit for bodily injury and property damage, including coverages for owned, non -owned and hired vehicles, as applicable; provided, however, that if the Owner does not own or lease vehicles for purposes of this Regulatory Agreement, then no automobile insurance shall be required. 2.16.1.3 Property insurance covering the Project against all risks of loss for one hundred percent (100 %) of the replacement value, with deductible limits acceptable to the Agency, and with three (3) months rental interruption coverage. 2.16.1.4 Worker's compensation insurance, fidelity bonds and/or such other insurance coverage which is ordinarily and customarily maintained on like kind and sized apartment projects within the City. 2.16.2 General Requirements. The insurance required by this Section 2.16 shall be provided under an occurrence form, and the Owner shall maintain such coverage continuously so long as this Regulatory Agreement is in force. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall be one and one -half times the occurrence limits specified above. 2.16.3 Additional Insured. Both the City and the Agency shall be named and endorsed as an additional insured on both the general liability, automobile liability and extended coverage property insurance covering the Project. Comprehensive general liability, comprehensive automobile liability and property insurance policies shall also be endorsed to name as additional insureds the Agency, the City and their board members, officers, agents, and employees. All policies and bonds shall be endorsed to provide thirty (30) business days prior written notice of cancellation, reduction in coverage, or intent not to renew to the address established for notices to each of the Agency pursuant to Section 5.2 below. 2.16.4 Insurance Endorsements. Upon request at any time during the term of this Regulatory Agreement, the Owner shall provide endorsements to Owner's insurance policies, in form and with insurers reasonably acceptable to the Agency, evidencing compliance with the requirements of this Section 2.16. 2.16.5 Adjustment in Levels of Insurance Coverage. If any other agreement concerning the Project requires insurance in amounts in excess of the amount set forth in this Section 2.16, the requirements of insurance coverage to be maintained on the Project hereunder shall be deemed satisfied by provision of such greater amounts of insurance, providing only that all such insurance policies comply with the provisions of Section 2.16.3 above. All coverage types and limits RVPUB\KCV\646177 Exhibit G Page 10` 03 2-010683 7/15 11' required by this Regulatory Agreement and the Related Agreements, shall be subject to modifications, additional requirements and reasonable increases by the Agency and City, as the need arises. The Owner shall not make any reductions in the scope of coverage that may affect the Agency's or City's protection, without the Agency's and City's prior written consent. ARTICLE 3. TERM AND RECORDATION 3.1 Term of Regulatory Agreement. This Regulatory Agreement and the Related Agreements shall remain in full force and effect for a period of fifty five (5 5) years from the date the first final and permanent certificate of occupancy is issued for the Project, unless the Owner and the Agency agree, in writing, to sooner terminate this Regulatory Agreement or the Related Agreements. The parties intend that the provisions and effect of this Regulatory Agreement and the Related Agreements, and specifically of Article 2 hereof, shall remain in full force and effect for the entire term hereof. 3.2 Agreement to Record. Owner agrees that this Regulatory Agreement and the Related Agreements may be recorded in the real property records of Los Angeles County, California, and in such other places as the Agency may reasonably request. ARTICLE 4. DEFAULT; REMEDIES 4.1 An Event of Default. Each of the following shall constitute an "Event of Default" by the Owner of this Regulatory Agreement and the Related Agreements: 4.1.1 Failure by the Owner to duly perform, comply with and observe any of the conditions, terms, or covenants of any agreement with the Agency concerning the Project, or of this Regulatory Agreement or the Related Agreements, if such failure remains uncured ten (10) business days after written notice of such failure from the Agency to the Owner in the manner provided herein or, with respect to a default that cannot be cured within ten (10) business days, if the Owner fails to commence such cure within such ten (10) business day period or thereafter fails to diligently and continuously proceed with such cure to completion. However, if a different period or notice requirement is specified under any other section of this Regulatory Agreement or the Related Agreements, then the specific provision shall control. 4.1.2 Any representation or warranty contained in this Regulatory Agreement or the Related Agreements or in any application, financial statement, certificate, or report submitted by Owner to the Agency proves to have been incorrect in any material respect when made. 4.1.3 A court having jurisdiction shall have made or rendered a decree or order: (i) adjudging Owner to be bankrupt or insolvent; (ii) approving as properly filed a petition seeking reorganization of Owner or seeking any arrangement on behalf of the Owner under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or of any state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of the Owner in bankruptcy or insolvency or for any of its properties; or (iv) directing the winding up or liquidation of the Owner, RVPUB\KCV\646177 Exhibit G Page 11 0, 20106813 t1" 7 11510 providing, however, that any such decree or order described in any of the foregoing subsections shall have continued unstayed or undischarged for a period of ninety (90) business days. 4.1.4 The Owner shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment or execution on any substantial part of its property, unless the property so assigned, sequestered, attached, or executed upon shall have been returned or released within ninety (90) business days after such event (unless a lesser time period is for cure hereunder) or prior to sale pursuant to such sequestration, attachment, or execution. If the Owner is diligently working to obtain a return or release of the property and the Agency's interests hereunder are not imminently threatened in its reasonable business judgment, then the Agency shall not declare a default under this subsection. 4.1.5 The Owner shall have voluntarily suspended its business or dissolved. 4.1.6 The condemnation, seizure, or appropriation of all or, in the opinion of the Agency, a substantial part of the Project, except for condemnation initiated by the City or the Agency. 4.1.7 Should there occur any default declared by any lender under any loan document or deed of trust relating to any loan made in connection with the Project, which loan is secured by a deed of trust or other instrument senior to this Regulatory Agreement. 4.2 Agency's Option to Lease. To cause the Project to meet the requirements of this Regulatory Agreement, Owner hereby grants to the Agency an irrevocable option to lease from time to time up to all of the Units in the Project as necessary to achieve compliance with the provisions of Article 2 of this Regulatory Agreement. Any rental paid under any such sublease shall be paid to the Agency without obligation to pay any such rental to Owner or any other third party. 4.3 Maintenance, Repair, Alterations. Owner shall maintain and preserve the Project in good condition and repair and in a prudent and businesslike manner. Except upon the prior written consent of the Agency, Owner shall not remove, demolish or substantially alter any of the improvements on the Project other than to make repairs of a nonstructural nature in the ordinary course of business which shall serve to preserve or increase the value of the Project. Owner shall complete promptly and in a good and workmanlike manner any improvements which may now or hereinafter be constructed on the Project and promptly restore in like manner any improvement which may be damaged or destroyed thereon from any cause whatsoever and pay when due all claims for labor performed and material finished therefor. Owner shall comply with all laws, ordinances, rules, regulations, covenants, conditions, restrictions, and orders of any governmental authority now or hereafter affecting the conduct or operation of the Project and of Owner's business on the Project or any part thereof or requiring any alteration or improvement to be made thereon. Owner shall not commit, suffer, or permit any act to be done in, upon, or to the Project or any part thereof in violation of any such laws, ordinances, rules, regulations, or orders. RVPUB\KCV\646177 Exhibit G Page 12 03 2010683 X11510IV Owner shall not commit or permit any waste or deterioration of the Project and shall keep and maintain abutting grounds, sidewalks, roads, parking, and landscaped areas in good and neat order and repair. Owner will not take, or fall to take, any action which if taken, or not so taken, would increase in anyway the risk of fire or other hazard occurring to or affecting the Project. Owner shall do any and all other acts which may be reasonably necessary to preserve or protect the value of the Proj ect. Owner hereby agrees that Agency may conduct from time to time through representatives, upon reasonable notice, on -site inspections and observation of: (i) the maintenance and repair of the Project, including a review of all maintenance and repair programs and practices and all reports and records pertaining thereto, including records of expenditures relating thereto; and (ii) such other facilities, practices, and records of Owner relating to the Units as the Agency reasonably deem to be necessary or appropriate in order to monitor Owner's compliance with the provisions of this Regulatory Agreement or the Related Agreements. 4.4 Liens. Owner shall pay and promptly discharge when due, at Owner's cost and expense, all liens, encumbrances and charges upon the Project, or any part thereof or interest therein, provided that the existence of any mechanic's, laborer's, materialman's, supplier's, or vendor's lien or right thereto shall not constitute a violation of this Section if payment is not yet due under the contract which is the foundation thereof and if such contract does not postpone payment for more than forty -five (45) business days after the performance thereof. Owner shall have the right to contest in good faith the validity of any such lien, encumbrance or charge, provided that within ten (10) business days after service of a stop notice or ninety (90) business days after recording of a mechanic's lien, Owner shall post and/or record a bond or other security reasonably satisfactory, but no more than the amount required to release the lien under California law, and provided further that Owner shall thereafter diligently proceed to cause such lien, encumbrance or charge to be removed and discharged. If Owner shall fail either to remove and discharge any such lien, encumbrance or charge or to bond against or deposit security in accordance with the preceding sentence, if applicable, then, in addition to any other right or remedy of the Agency, they may, but shall not be obligated to, discharge the same, without inquiring into the validity of such lien, encumbrance or charge nor into the existence of any defense or offset thereto, either by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by depositing in a court a bond or the amount or otherwise giving security for such claim, in such manner as is or may be prescribed by law. Owner shall, immediately upon demand therefor by the Agency pay to the Agency an amount equal to all costs and expenses incurred in connection with the exercise by the Agency of the foregoing right to discharge any such lien, encumbrance or charge. 4.5 Assignment of Rents, Issues and Profits. Owner hereby assigns and transfers absolutely to the Agency all of the rents from the Units and hereby gives to and confers upon the Agency the right, power and authority to collect such rents at such times and upon the occurrence of such events as provided herein. Owner irrevocably appoints the Agency, its true and lawful attorney -in -fact, at its option, at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in its name or in the name of Owner, for all such rents, and apply the same to the obligations secured hereby; provided, however, that Owner shall have the right to collect such rents (but no more than one (1) month in advance unless RVPUB\KCV\646177 Exhibit G Page 13 03 2010683 gym° the written approval has first been obtained), and to retain and enjoy the same, so long as an Event of Default shall not have occurred hereunder or, if occurred, be cured as provided hereunder. The assignment of rents in this Article 4 is intended to be an absolute assignment from Owner to the Agency and not merely the passing of a security interest. The foregoing power of attorney is coupled with an interest and cannot be revoked. 4.6 Collection Upon Default. Upon the occurrence of an Event of Default hereunder, the Agency may at any time, with notice, either in person, by agent or by a receiver appointed by a court and without regard to the adequacy of its security, enter upon and take possession of the Project or any part thereof, and, with or without taking possession of the Project or anypart thereof, in its own name sue for or otherwise collect such rents, including those past due and unpaid, and all prepaid rents and all other monies which may have been or may hereafter be deposited with Owner by any lessee or tenant of Owner to secure the payment of any rent or for any services thereafter to be rendered by Owner or any other obligation of any tenant to Owner arising under any lease or rental agreement. Owner agrees that upon the occurrence of any Event of Default hereunder, Owner shall promptly deliver all such rents and other monies to the Agency, and the Agency may apply the same, less reasonable costs and expenses of operation and collection, including, without limitation, attorneys' fees, whether or not suit is brought or prosecuted to judgment, upon any indebtedness or obligation of Owner arising under this Regulatory Agreement or the Related Agreements, and in such order as it may determine, notwithstanding that said indebtedness or the performance of said obligation may not then be due. The collection of such rents, or the entering upon and taking possession of the Project, or the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or pursuant to such notice of default or be deemed or construed to make the Agency a mortgagee -in- possession of the Project or any portion thereof. 4.7 Application of Funds After Default. Except as otherwise herein provided, upon the occurrence and during the continuation of an Event of Default hereunder, the Agency may, at any time without notice, apply any or all sums or amounts received and held by the Agency to pay insurance premiums, impositions, or either of them, and all other sums or amounts received by the Agency from or on account of Owner, may be applied by the Agency toward payment of any indebtedness or obligation of the Owner arising under this Regulatory Agreement or the Related Agreements, in such manner and order as the Agency may elect, notwithstanding that said indebtedness or the performance of said obligation may not yet be due. The receipt, use or application of any such sum or amount shall not be construed to affect or cure any Owner Event of Default hereunder, or to cure or waive any default or notice of default hereunder, or to invalidate any act of the Agency. 4.8 Costs of Enforcement. If any Event of Default occurs, the Agency may employ an attorney or attorneys to protect its rights hereunder. Owner promises to pay to the Agency, on demand, the fees and expenses of such attorneys and all other costs of enforcing the obligations secured hereby including without limitation, recording fees, receiver's fees and expenses, and all other expenses of whatever kind or nature, incurred by the Agency in connection with the enforcement of the obligations secured hereby, whether or not such enforcement includes the filing of a lawsuit. RVPUB\KCV\646177 Exhibit G Page 14 03 201068-3 e �x 4.9 Remedies Not Exclusive. The Agency shall be entitled to enforce payment and performance of any indebtedness or obligation of Owner arising under this Regulatory Agreement or the Related Agreements and to exercise all rights and powers under this Regulatory Agreement or the Related Agreements or any law now or hereafter in force, notwithstanding some or all of the said indebtedness and obligations secured hereby may now or hereafter be otherwise secured, whether by guaranty, mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this Regulatory Agreement or the Related Agreements nor their enforcement by court action shall prejudice or in any manner affect the Agency's rights to realize upon or enforce any other security now or hereafter held by the Agency, it being agreed that the Agency shall be entitled to enforce this Regulatory Agreement or the Related Agreements and any other security now or hereafter held in such order and manner as it may in their absolute discretion determine. No remedy herein conferred upon or reserved to the Agency is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by this Regulatory Agreement or the Related Agreements to the Agency may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Agency, and the Agency may pursue inconsistent remedies. 4.10 Specific Performance. The Agency shall have the right to mandamus or other suit, action or proceeding at law or in equity to require the Owner to perform their obligations and covenants under this Regulatory Agreement or the Related Agreements or to enjoin acts or things which may be unlawful or in violation of the provisions hereof. 4.11 Right to Cure at Owner's Expense. The Agency shall have the right to cure any monetary default by Owner under a loan secured by an encumbrance on the Project; provided, however, that if the Owner is in good faith contesting a claim of default under a loan and the interests of the Agency are not imminently threatened by such default, in their sole judgment, then the Agency shall not have the right to cure such default. The Owner shall reimburse the Agency for any sums advanced by the Agency to cure a monetary default by the Owner upon demand therefor, together with interest thereon at the lesser of the rate of ten percent (10 %) per annum or the maximum rate permitted by law from the date of expenditure until the date of reimbursement. 4.12 Right of Contest. The Owner shall have the right to contest in good faith any claim, demand, levy, or assessment, the assertion of which would constitute an Event of Default hereunder. Any such contest shall be prosecuted diligently and in a manner not prejudicial to the rights of the Agency hereunder. 4.13 Action at Law; No Remedy Exclusive. The Agency may take whatever action at law or in equity as may be necessary or desirable to enforce performance and observance of any obligation, agreement or covenant of the Owner under this Regulatory Agreement or the Related Agreements. No remedy herein conferred upon or reserved by the Agency is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Regulatory Agreement or the Related Agreements or now or hereafter existing at law, in equity or by statute. No delay or RVPUB\KCV\646177 Exhibit G Page 15 2010683 1 omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of such right or power, but any such right or power may be exercised from time to time and as often as the Agency may deem expedient. In order to entitle the Agency to exercise any remedy reserved to it in this Regulatory Agreement or the Related Agreements, it shall not be necessary to give any notice, other than such notice as may be herein expressly required or required by law to be given. ARTICLE 5. GENERAL PROVISIONS 5.1 Limitations on Recourse. The Agency's obligation to pay any monetary damages arising from the Agency's default under this Regulatory Agreement or the Related Agreements shall be strictly limited to monies available in the Agency's Housing Fund established pursuant to Health & Safety Code Section 33334.3. Under no set of circumstances shall the City's or the Agency's general fund or other accounts become liable for damages in the event of the breach of the Agency's obligations under this Regulatory Agreement or the Related Agreements. All Agency's obligations under this Regulatory Agreement or the Related Agreements shall be funded only out of the Agency's Housing Fund as provided in Section 3.6 of the Agreement. 5.2 Notice. All notices (other than telephone notices), certificates or other communications (other than telephone communications) required or permitted hereunder shall be sufficiently given and should be deemed given when personally delivered or when sent by telegram, or when sent by facsimile transmission (if properly confirmed in writing), or seventy -two (72) hours following mailing by registered or certified mail, postage prepaid, or twenty -four hours following transmission of such notice by express mail, Federal Express or similar carriers, addressed as follows: If to the Agency: The Arcadia Redevelopment Agency 240 West Huntington Drive Post Office Box 60021 Arcadia, California 91006 -6021 Attention: Executive Director With a copy to (but not to be used for giving Notice): Best Best & Krieger LLP 3750 University Avenue Suite 400 Riverside, California 92501 Attention: Agency Counsel for the Arcadia Redevelopment Agency If to the Owner: Arcadia Heritage Park, L.P. RVPUB\KCV\646177 Exhibit G Page 16 ® 2010683 1740 East Garry Avenue Suite 105 Santa Ana, California 92705 Attention: Roger Davila With a copy to (but not to be used for giving Notice): Arter & Hadden LLP 5 Park Plaza Suite 1000 Irvine, California 92614 -8528 Attention: Bruce Holden 5.3 Relationship of Parties. Nothing contained in this Regulatory Agreement shall be interpreted or understood by any of the parties, or by any third persons, as creating the relationship of employer and employee, principal and agent limited or general partnership, or joint venture between the Agency and the Owner or the Owner's agents, employees or contractors, and the Owner shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Regulatory Agreement for the operation of the Project. Except as otherwise provided in the Related Agreements, the Owner has and hereby retains the right to exercise full control of employment direction, compensation and discharge of all persons assisting in the performance of services hereunder. In regards to the on -site operation of the Project, the Owner shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding and all other laws and regulations governing such matters. The Owner agrees to be solely responsible for its own acts and those of its agents and employees. 5.4 No Claims. Nothing contained in this Regulatory Agreement shall create or justify any claim against the Agency by any person the Owner may have employed or with whom the Owner may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the operation of the Project. 5.5 Conflict of Interests. No member, official or employee of the City or Agency shall make any decision relating to this Regulatory Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 5.6 Non - Liability of City and Agency Officials, Employees and Agents. No member, official, employee or agent of the City or the Agency shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Owner or successor or on any obligation under the terms of this Regulatory Agreement. 5.7 Enforced Delay. In addition to specific provisions of this Regulatory Agreement, performance by any party to this Regulatory Agreement shall not be deemed to be in default where RVPUB\KCV\646177 Exhibit G Page 17 03 0 0683 11 1 delays or defaults are due to war; terrorism; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; government restrictions or priorities; litigation; unusually severe weather; inability to secure unnecessary labor, materials or tools; delays of any contractor or supplier; acts of the other parties; acts or failure to act of the Agency or any other public or governmental agency or entity (except that any act or failure to act of the Agency shall not excuse performance by the Agency and except where such act or failure to act is required or allowed by law); or any other causes beyond the reasonable control or without the default of the party claiming an extension of time to perform. Any extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other parties hereunder more than thirty (3 0) business days after the commencement of the cause, the period shall commence to run only thirty (30) business days prior to the giving of such notice. 5.8 Title of Parts and Sections. Any titles of the parts, sections or subsections of this Regulatory Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any part of its provision. 5.9 Hold Harmless. Except as such claims may arise from gross negligence or willful misconduct by the Agency, if any person or entity performing work for the Owner on the Project shall assert any claim against the Agency on account of any damage alleged to have been caused by reason of the negligent or willful acts of the Owner, the Owner shall defend at its own expense any suit based upon such claim, and if any judgment or claims against the Agency shall be allowed, the Owner shall pay or satisfy such judgment or claim and pay all costs and expenses in connection therewith. Nothing herein stated shall be interpreted as a prohibition against the Owner seeking indemnification (either contractually or as a matter of law) from any third person or entity other than the City or the Agency. In addition, the Owner shall defend the City and the Agency (with counsel reasonably satisfactory to the Agency) against any claims or litigation of any nature whatsoever brought by third parties and directly or indirectly arising from the Owner's performance of its obligations under this Regulatory Agreement or the Related Agreements, and in the event of settlement, compromise or judgment hold the City and the Agency free and harmless therefrom. 5.10 Rights and Remedies Cumulative. Except as otherwise expressly stated in this Regulatory Agreement, the rights and remedies of the parties are cumulative, and the exercise or failure to exercise one or more of such rights or remedies by either party shall not preclude the exercise by it, at the same time or different times, of any right or remedy for the same default or any other default by the other party. No waiver of any default or breach by the Owner hereunder shall be implied from any omission by the Agency to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such wavier shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by the Agency to or of any act by the Owner requiring further consent or approval shall not be deemed to RVPUB\KCV\646177 Exhibit G Page 18 03 20" 106o a f ° ^ waive or render unnecessary the consent or approval to or of any subsequent similar act. The r exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under this Regulatory Agreement, nor shall it invalidate any act done pursuant to notice of default, or prejudice the Agency in the exercise of any right, power, or remedy hereunder or under any agreements ancillary or related hereto. 5.11 Applicable Law; Venue. This Regulatory Agreement and the Related Agreements shall be interpreted under and pursuant to the laws of the State of California, without regard to its conflicts of laws principles. Any action or proceeding pertaining to the interpretation or enforcement of this Regulatory Agreement or the Related Agreements, or which in any way arise from the existence of this Regulatory Agreement or the Related Agreements, shall be instituted and prosecuted in the appropriate court in the County of Los Angeles, California. Owner hereby irrevocably waives, to the maximum legal extent, any statutory or common law rights which it may have to a change of venue to any other court or jurisdiction (including Federal District Court) for any reason whatsoever, including, without limitation, due to the fact that the Agency or the City is or may be a party to this Regulatory Agreement, or due to the fact that questions involving Federal laws or rights may be involved. Without limiting the generality of the foregoing, the Owner hereby irrevocably waives, to the maximum legal extent, any rights which it may have arising under California Code of Civil Procedure Section 394. 5.12 Severability. If any term, provision, covenant or condition of this Regulatory Agreement or the Related Agreements is held in a final disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall continue in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. 5.13 Attorneys' Fees. In the event any legal action is commenced to interpret or to enforce the terms of this Regulatory Agreement or the Related Agreements or to collect damages as a result of any breach thereof, the party prevailing in any such action shall be entitled to recover against the party not prevailing all reasonable attorneys' fees and costs incurred in such action (including all legal fees incurred in any appeal or in any action to enforce any resulting judgment). 5.14 Binding Upon Successors. This Regulatory Agreement or the Related Agreements shall be binding upon and inure to the benefit of the permitted heirs, administrators, executors, successors in interest and assigns of each of the parties, except that there shall be no transfer of the Project by the Owner without the prior written consent of the Agency. Any reference in this Regulatory Agreement to a specifically named party shall be deemed to apply to any successor, heir, administrator, executor or assign of such party who has acquired an interest in compliance with the terms hereof or under law. 5.15 Time of the Essence. In all matters under this Regulatory Agreement or the Related Agreements, time is of the essence. RVPUB\KCV\646177 Exhibit G Page 19 03 2'010683 1 15/0 5.16 Approval by Agency. y 5.16.1 Any approvals required under this Regulatory Agreement shall not be unreasonably withheld or made, except where it is specifically provided that another standard applies, in which case the specified standard shall apply. 5.16.2 Except as otherwise provided in this Regulatory Agreement, whenever this Regulatory Agreement calls for approval by the Agency of a proposed document to be submitted by the Owner, the Agency shall notify the Owner of approval or disapproval within twenty (20) business days after receipt of the proposed document. The Agency may not disapprove a proposed document without giving specific reasons for its disapproval. 5.17 Complete Understanding of the Parties. This Regulatory Agreement may be executed in multiple originals, each of which shall be deemed to be an original. This Regulatory Agreement and the attached Exhibits constitute the entire understanding and agreement of the parties with respect to the matters herein discussed, except as otherwise expressly set forth herein. 5.18 Burden and Benefit. The Agency and the Owner to hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concerning the Project, and that Owner's legal interest in the Project is rendered less valuable thereby. The Agency and Owner hereby declare their understanding and intent that the covenants, reservations, and restrictions set forth herein directly benefit the land (i) by enhancing and increasing the enjoyment and use of the Project by Qualified Households, (ii) by making possible the obtaining of advantageous financing for the Project and (iii) by furthering the public purposes advanced by the City and the Agency. [Signatures on Following Pages] RVPUS\KCV\646177 Exhibit G Page 20 03 2010683 ATTEST: Agency Secretary APPROVED AS TO LEGAL FORM: BEST BEST & KRIEGER LLP C Agency Counsel RVPUB\KCV\646177 "AGENCY" Y THE ARCADIA REDEVELOPMENT AGENCY a public body, corporate and politic By: William Kelly Executive Director Exhibit G Page 21 03 2010683 711 10 "OWNER" ARCADIA HERITAGE PARK, LP a California limited partnership By: ASL ARCADIA, INC. a California corporation Its: Development General Partner LSD Roger Davila Vice - President By: HERITAGE COMMUNITY HOUSING, INC. a California non - profit corporation Its: Managing General Partner WE John Bigley Executive Vice - President By: AMERICAN SENIOR LIVING, INC. a California corporation Its: Developer By: Roger Davila Vice - President RVPUB\-KCV\646177 Exhibit G Page 22 03 2010683 .,7 a^"fsp° A� EXHIBIT A TO HERITAGE PARK REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS Legal Description of Property RVPUB\KCV\646177 Exhibit G Page23 3 2010683 ?1,5 0 EXHIBIT B TO HERITAGE PARK REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS CERTIFICATION OF TENANT ELIGIBILITY NOTE TO APARTMENT OWNER: This form is designed to assist you in computing Annual Income in accordance with the method set forth in the Department of Housing and Urban Development ( "HUD ") Regulations (24 CFR 813). You should make certain that this form is at all times up -to -date with the HUD Regulations. Re: [Address of Apartment Building] I/We, the undersigned state that Uwe have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment project. Listed below are the names of all persons who intend to reside in the unit: 1. 2. Dames of Relationship Members of to Head of Household Household Age Income Computation 3. 4. 5. Social Security Place of Number Employment The total anticipated income, calculated it accordance : =nth the provisions of this Section, of all persons over the age of 18 years listed above for the 12 -month period beginning the date that I/we plan to move into a unit is $ Included in the total anticipated income listed above are: (a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; RVPUB\KCV\646177 Exhibit G Page 24 3 2010683 4 17/0 (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets); (c) interest and dividends (including income from assets excluded below); (d) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of period receipts, including any lump sum payment for the delayed start of a periodic payment; (e) payments in lieu of earnings, such as unemployment and disability compensation, workmen's compensation and severance pay; (f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (1) any earned income tax credit to the extent that it exceeds income tax liability. Excluded from such anticipated income are: (a) casual, sporadic or irregular gifts; (b) amounts which are specifically for or in reimbursement of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen's compensation), capital gains and settlement for personal or property losses; (d) amounts of educational scholarship paid directly to the student of the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes, are to be included in income; (e) special pay to a household member who is away from home and exposed to hostile fire; (0 relocation payments under Title 11 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; (g) foster child care payments; (h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977; RVPUB\KCV\646177 Exhibit G Page 25 3 2.063 (i) payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act. (k) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; (1) payments or allowances made under the Department of Health and Human Services' Low- Income Home Energy Assistance Program; (m) payments received from the Job Training Partnership Act; and (n) the first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Court of Claims. 7. Do the persons whose income or contributions are included in item 6 above: (a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? Yes No; or (b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale) during the last two years at less than fair market value? Yes No (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than $5,000? Yes No (d) If the answer to (c) is yes, state: (i) the amount of income expected to be derived from such assets in the 12 -month period beginning on the date of initial occupancy in the unit that you propose to rent: $ ; and (ii) the amount of such income, if any, that was included in item 6 above: $ 8. (a) Are all of the individuals who propose to reside in the unit full -time students *? Yes No *A full -time student is an individual enrolled as a full -time student during each of five calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full -time course of institutional or farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is at least one of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? Yes No 9. Neither myself nor any other occupant of the unit Uwe propose to rent is the owner of the rental housing proj ect in which the unit is located (hereinafter the "Owner "), has any family relationship to the Owner or owns, directly or indirectly, any interest in the ownership. For purposes of this section, indirect ownership by an individual shall mean ownership by a family member, ownership by a corporation, partnership, estate or RVPUB\KCV\646177 Exhibit G Page 26 0 3 2 010 6 8 3 71150 V trust in proportion to the ownership or beneficial interest in such corporation, partnership, estate or trust held by the individual or a family member, and ownership, direct or indirect, by a partner of the individual. 10. This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and Uwe declare that all information set forth herein is true, correct and complete and, based upon information Uwe deem reliable and that the statement of total anticipated income contained in Section 6 is reasonable and based upon such investigation as the undersigned deemed necessary. 11. Uwe will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either an income verification from my /our present employer(s) or copies of federal tax returns for the immediately preceding calendar year. 12. Uwe acknowledge that Uwe have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my /our agreement with the Owner to lease the units and will entitle the Owner to prevent or terminate my /our occupancy of the unit by institution of an action for eviction or other appropriate proceedings. 13. Housing Issuer Statistical Information (Optional - -will be used for reporting purposes only): Marital Status: Race (Head of Household) White Asian Hispanic African- American Native American Other Physical Disability: Yes No Uwe declare under penalty of perjury that the foregoing is true and correct. Executed this day of , 20_ in the County of Los Angeles, California. Applicant Applicant [Signature of all persons over the age of 18 years listed in number 2 above required.] RVPUB\KCV\646177 Exhibit G Page 27 Vr ;Q1 6 µ 5 10, FOR COMPLETION BY APARTMENT OWNER ONLY: 1. Calculation of eligible income: (a) Enter amount entered for entire household in 6 above: $ (b)(1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance ($ ); (2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook savings ($ ), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance (3) Enter at right the greater of the amount calculated under (1) or (2) above: $ , (c) TOTAL ELIGIBLE INCOME (Line 1(a) plus line L(b)(3): $ 2. The amount entered in 1(c): Qualifies the applicant(s) as a Lower - Income Tenant(s). Does not qualify the applicant(s) as Lower - Income Tenant(s). 3. Number of apartment unit assigned: Bedroom Size: Rent: $ 4. This apartment unit [was /was not] last occupied for a period of 31 consecutive days by persons whose aggregate anticipated annual income, as certified in the above manner upon their initial occupancy of the apartment unit, qualified them as Lower - Income Tenants. 5. Method used to verify applicant(s) income: Employer income verification. Copies of tax returns. Other Manager RVPUB\KCV\646177 Exhibit G Page 28 03 20163 `�° 1151 '. r t �,; f �` INCOME VERIFICATION 1 (for employed persons) The undersigned employee has applied for a rental unit located in a project financed in part by a loan from the Arcadia Redevelopment Agency for persons of very low income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature Date Title I hereby grant you permission to disclose my income to that they may determine my income eligibility for rental of an apartment at [ * ** Signature Please send to: Date in order RVPUB\KCV\646177 Exhibit G Page 29 a' 2010683 P qp 5/03 INCOME VERIFICATION (for self - employed persons) I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge. Signature RVPUB\KCV\646177 Date Exhibit G Page 30 . 03 2010683 EXHIBIT C TO HERITAGE PARK REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE' FOR THE [MONTH /QUARTER] ENDING The undersigned, , as the authorized representative of Arcadia Heritage Park, L.P. ( "Developer "), which is a California limited partnership, has read and is thoroughly familiar with the provisions of the various documents associated with financial assistance provided to the Developer by the Arcadia Redevelopment Agency ( "Agency "), such documents including the Regulatory Agreement, dated as of January 21, 2003 between the Developer and the Agency. As of the date of this Certificate, the following percentages of completed residential units in the Project (i) are occupied by Qualified Households (as such term is defined in the Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Qualified Household vacated such unit, as indicated: Occupied by Low or Moderate Income Tenants: Held vacant for occupancy continuously since last occupied by Low or Moderate Income Tenant: Vacant Units: [Qualified Households] who commenced occupancy of units during the preceding [month/quarter] : Percent Unit Nos. Percent Units Nos. This form may be amended from time to time by the Arcadia Redevelopment Agency. RVPUB\KCV\646177 Exhibit G Page 31 LA 03 2010683 r' Attached is a separate sheet (the "Occupancy Summary ") listing, among other items, the following information for each apartment unit in the Proj ect: the number of each apartment unit, the occupants of each unit, the rental paid for each unit and the size and number of bedrooms of each unit. It also indicates which units are occupied by Qualified Households and which units became Units during the preceding [month/quarter]. The information contained thereon is true and accurate. The undersigned hereby certifies that (1) a review of the activities of the Developer during such [month/quarter] and of the Developer's performance under the Regulatory Agreement has been made under the supervision of the undersigned; and (2) to the best of the knowledge of the undersigned, based on the review described in clause (1) hereof, the Developer is not in default under any of the terms and provisions of the above documents [or describe the nature of any default in detail and set forth the measures being taken to remedy such default]. ARCADIA HERITAGE PARK, L.P. RVPUS\KCV\646177 Exhibit G Page 32 03 2010683 -" 15 / to EXHIBIT D TO ,r HERITAGE PARK REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS Marketing, Application and Tenant Selection Plan RVPtJB \KM646177 Exhibit G Page 33 03 2010683 � F 'j�1I4 i In cooperation with: Marketing, Application and Tenant Selection Plan January 21, 2000 (Revised) Arcadia Heritage Park, L.P. C/o American Senior Living 1740 East Garry Avenue, Suite 105 Santa Ana, California 92705 Telephone: (949) 224 -1800 Fax: (949) 224 -1805 Arcadia Redevelopment Agency c/o Development Services Department 240 West Huntington Drive Arcadia, California 91066 -6021 Telephone: (626) 574 -5408 Fax: (626) 447 -3309 RVPUB \KCV\646177 Exhibit G Page 34 03 2010683 1.0 2.0 3.0 Overall Marketing Objective a. To lease -up Heritage Park at Arcadia, as much as permitted by law and regulations, to income- qualified seniors who are currently living within the Arcadia city limits; and secondarily to eligible seniors in the area surrounding Arcadia. b. To provide a balanced tenant composition (sex, age, race, ethnicity, national origin, religion). Marketing Strategy The following marketing strategy will be utilized to achieve the overall marketing objective. • Generate awareness of Arcadia Heritage Park among Arcadia seniors and community influencers through the programs below: - Direct Marketing - Public Relations - Directory Advertising -Media Advertising • Generate and maintain prospect communication through an initial "Interest" list comprised of telephone inquiries resulting from publicity about the project in local news media, signage at the development site (including an "800" number), groundbreaking news release, and local advertising in Arcadia and the Arcadia area. • Build and maintain prospect and community influencer relationships through a community relations program with the City departments, Arcadia non - profits, community service organizations, and churches (see sample list, Attachment 1). • Work with the Los Angeles County Housing Authority to secure information regarding the possible waiting list of Arcadia senior citizen Section 8 voucher holders. • In the event sufficient interest is not generated from the Arcadia area, expand the marketing effort to the San Gabriel Valley, and then to the greater Los Angeles/Long Beach area by press and audio /visual announcements. Geographic Market • Primary Market Area (PMA) is within the City limits of Arcadia. • The Secondary Market Area (SMA) is within a three to five mile radius of the site, i.e., the western San Gabriel Valley. RVPUB \KCV\646177 Exhibit G Page 3 5 4.0 • The Tertiary Market Area (TMA) is the greater Los Angeles/Long Beach area. Basic Eligibility • Age 62 years or older (per Fair Housing Act, Title VIII of the Civil Rights Act of 1968; 424.5.C.3607(b)(2)(B); 24 C.F.R. 100.303(a). • Income ranges from $19,300 for a single person (very low income) to $29,760 for three people (low income). (See below) Income Limits (2002) 1 Person 2 People 3 People Very Low $19,300 $22,050 $24,800 Low $23,160 $26,460 $29,760 • Documented "good standing" based on renter /owner check, income verification, age. Marketing Programs Directory Advertising Advertise initially and annually in: • Senior Service Directory (City of Arcadia Senior Citizens Division) • Neighborhood and Public Service Directories - Pacific Bell and General Telephone - Donnelly Directory - Chamber of Commerce list of community organizations - Community Service Organizations themselves - Senior Housing Directories - Arcadia area rental guides - Housing Authority of the County of Los Angeles - Arcadia Churches, Temples, Synagogues and other places of worship Media Advertising Primary Market Area (PMA) - Advertise in the Arcadia Weekly. Secondary Market Area (SMA) — Advertise in the Pasadena Star News, San Gabriel Valley Tribune, Sierra Madre Weekly, Monrovia Weekly and Penny Saver. RVPUB \KCV\646177 Exhibit G Page 36 03 2010683 0 It qq l5/0 Tertiary Market Area (TMA) — Advertise in the Los Angeles Times, La Opinion, Daily News,� Long Beach Press Telegram, and other regional, minority and ethnic print and audio /visual media. Direct Marketing Utilize market research databases to compile a list of possible qualified prospects in the Arcadia PMA. o Preparation and distribution of a brochure /flyer to community organizations, individuals, and senior meeting places. 500 Wait List Policy and Procedures • Names will be placed on the "Interest" list in order of the inquiry. An Interest Form will be mailed to each interested party (see Attachment 2). • Only one (1) name per address /household will be permitted to submit an Interest Form and be placed on the waiting list. Should more than one (1) application per name or household be discovered, all applications from that name and household will be disqualified. • In order to be put on the "Waiting List" each applicant must return the signed "Interest Form," (Attachment 2) and must pay a $200 refundable deposit to "American. Senior Care." This $200 will be returned to the applicant if he /she is not selected in the Lottery or is otherwise ineligible for tenancy. • Once a wait list applicant has submitted the $200 deposit, signed and returned the completed Interest Form, they will be given a receipt with a number. This will act as the applicant's Wait List Number. There will be only one Wait List Number assigned to each application, no matter how many people are listed on the Interest Form. • The Interest Form, deposit account and Wait List records and Wait List Number will be kept at the American Senior Care corporate office, 1740 East Garry Avenue, Suite 105, Santa Ana, California 92705, (949) 224 -1800 (Ms. Aimee Staudt). • Monthly contact will be made via Newsletters keeping the Wait List applicants aware of the selection and subsequently the construction progress, etc. 6,0 Applicant Screening Process- to begin 90 days prior to occupancy • The applicant screening process will be based upon each applicant's Wait List Number. All applicant names on the Wait List will be placed in a Lottery (by Wait List Number). Note — only the Applicant's Wait List Number will be entered. RVPLJB \KCV\646177 Exhibit G Page 37 q 03 20106"83 b 1 t The following priority shall be made. Eligible applicants residing in Arcadia for twenty (20) or more years (e.g., 6,936 days) from December 31, 2002 shall have five (5) balls with their Wait List Number placed in the Lottery drum. Eligible applicants residing in Arcadia for more than five (5) years (e.g., 1461 days) but less than twenty (20) years (e.g., 6935 days) shall have three (3) balls with their Wait List Number placed in the Lottery drum. Eligible applicants residing in Arcadia for more than two (2) years (e.g., 730 days) but less than five (5) years (e.g., 1,460 days) shall have two (2) balls with their Wait List Number placed in the Lottery drum. All other eligible applicants shall have one (1) ball with their Wait List Number placed in the Lottery drum. The initial selection shall be made on at a.m. /p.m. in Arcadia City Hall Council Chambers, 240 West Huntington Drive. A list of the winners in the order drawn shall be prepared by Arcadia Heritage Park, L.P. A certified letter, return receipt requested, shall be sent to the first seventy five (75) names drawn. The first fifty three (53) applicants shall be informed of their potential tenancy; the twenty two (22) others shall be informed they may be tenants if one of the fifty three (53) are ineligible for any reason. • Each applicant selected then will have twenty one (21) calendar days to complete a detailed in- person questionnaire with an Arcadia Heritage Park representative. NOTE: Arcadia Heritage Park staff will conduct interviews in Arcadia, probably at the Community Center on Huntington Drive at Holly Avenue /Campus Drive. Potential tenants will not have to travel to the American Senior Living Office in Santa Ana. Applicants will need to provide proof of age and social security (Identification card, or Drivers License, and a valid social security card). • Applicants will need to provide proof of all income and assets (equity). • Applicants will be required to pay an additional $200 (to add to the previous $200 deposit for a total of $400), pay $25 for a credit report, and pay one month's rent. Summary - $200 — previously paid deposit — due at submission of Interest Form $200 — second payment on security deposit (total $400) — due after RVPUB \KCV\646177 Exhibit G Page 38 20 10683 P � is 4t �� Lottery selection and filing of detailed tenant application $25 — credit report fee - due after Lottery selection and filing of detailed tenant application To be determined (TBD) — first months rent. This amount will depend on the applicant's income and family size (1 or 2 bedroom). Total — $425, plus first month's rent The preliminary rent for one bedroom is $472 /month, plus an estimated $44 /month utility charge (total - $516 /month). Two bedroom rent is $576 /month plus an estimated $44 /month utility charge (total - $620 /month). These amounts are only estimates and will change (i.e., higher). • Applicants will need to complete an official application to rent. (Applicants will be required to make at least 1.5 times the monthly rent.) • Applicants will need to provide previous ownership and /or rental history contact information for verification by Heritage Park representatives. • Applicants must have no previous evictions and /or judgments concerning previous rental history. • Applicants must not be in a current bankruptcy. Arcadia Heritage Park will verify the information submitted by the 53 selected in the Lottery. If verified, they will become tenants in the development. If the information submitted is not verified, or is significantly inaccurate in the opinion of Arcadia Heritage Park, the applicant shall be ineligible to re -apply for a period of one (1) year. RVPUB\KCV1646177 Exhibit G Page 39 0 e A-1010683 ( v,f,�k�l�1lr' ATTACHMENT 1 TO MARKTING, APPLICATION AND TENANT SELLECTION PLAN ARCADIA COMMUNITY ORGANIZATIONS Arcadia Heritage Park Senior Housing Project CIVIC, MUNICIPAL, AND GENERAL WELFARE Arcadia Chapter — American Red Cross 376 West Huntington Drive, Arcadia 91007; Phone: 447 -2193; Fax: 445 -4147 Arcadia Meals on Wheels American Red Cross — Arcadia Chapter — 376 West Huntington Drive, Arcadia 91007 Phone: 447 -2192 Arcadia Welfare & Thrift Shop 323 North First Avenue, Arcadia 91006, 447 -2881. Meets second Wednesday each month 4:00 p.m. at First Federal Bank, Santa Anita & Foothill Boulevard. Assistance League of Arcadia 100 South Santa Anita, Arcadia; Phone 446 -7605; Meets fourth Tuesday each month 10:00 a.m. at the Assistance League House, Santa Anita Family Service 605 South Myrtle Avenue, Monrovia 91016; Phone: 359 -9358 SERVICE CLUBS Arcadia Sunrise Rotary Club President, Don Fandry 447 -6962. Contact person Russ Garside 574 -1582. Meets each Wednesday at 7:10 a.m. / Santa Anita Golf Course Bar & Grill. Altrusa Club of Arcadia President, Carolyn Castillo, 792 -3225, 330 E. Cordova 4130, Pasadena, CA 91101. Meets second Wednesday each month at 6:30 p.m. in Arcadia Chamber Board Room, RVPUB \KCV\646177 Exhibit G Page 40 (13 2010683, Civitan Club of Arcadia (Raises funds for high school scholarships, disabled, etc.) President, Linda Colley, 3355 Rubio Canyon Road, Altadena 91001. Meets second and fourth Tuesdays each month at 7:00 p.m. — Casa Romero Mexican Restaurant, 101 South First Avenue, Arcadia 91006. Lions Club of Arcadia President, George Sanders, Post Office Box 660571, Arcadia 91066; Phone: 449 -7898. Meets Thursdays 12:15 p.m. — Casa Romero Mexican Restaurant, 101 South First Avenue, Arcadia. Quota Club of Arcadia (Raises funds for hearing impaired individuals) President, Daisy Martin, 111 South Hidalgo, Alhambra 91801; Phone: 282 -7582. Contact person, Delfina Rodriguez, 217 North Lake Avenue, Suite C, Altadena 91101. Meets second Thursday each month at 7:00 p.m. - Colonial Kitchen, 1110 Huntington Drive, San Marino. Notary Club of Arcadia President, Bob Novell, Post Office Box 660638, Arcadia 91066; Phone: 447 -0236; Fax 447- 0236. Contact person, Barbara Barnes; Phone: 447 -0236. Meets each Friday at 12:OO.noon -- Embassy Suites, Arcadia. Soroptimist International of Arcadia and Monrovia President, Ann Durgerian; Phone: 574 -1331. Call Ann for meeting time and location. RVPUMKCV\646177 Exhibit G Page 41 �` 3 210603 �e r� ATTACHMENT 2 TO MARKTING, APPLICATION AND TENANT SELLECTION PLAN ARCADIA HERITAGE PARK INTEREST FORM Note: This form must be completely and accurately filled out, signed by all potential interested tenants, and returned to American Senior Care, 1740 East Garry Avenue, Suite 105, Santa Ana, California 92705 (Fax not accepted). 1. Applicant Name Birth Date Address Apt. City State Zip Code Telephone Fax E -mail 1 Length of time you have lived at this address. 3. If you have lived at the above address less than three (3) years, please provide your previous address. Address City 4. Length of time at this address. from to 5. Spouse`s Natile: (if to be co-tenant) Birth Date 6. Other third -party (non- spouse) proposing to share tenancy, (if any): Name: 7. Relationship to applicant: RVPU13\KCV\646177 Exhibit G Page 42 Birth Date 03 2010083 8. Assets /Equity — Per federal guidelines, the value of each applicant's and co- tenant's assets (net of mortgages, etc.) will be calculated. This amount shall be multiplied by a ten percent (10 %) interest factor and that figure shall be added to income (NOTE: the Developer can elect to apply a lesser market rate, e.g. 2 -3 %, for the purposes of making this calculation). Eligibility shall be based on total annual income. Annual Income Restrictions (per 2002 — U.S. Federal Housing and Urban Development). NOTE: These may be revised in February 2003 1 Person 2 People 3 People Very Low $19,300 $22,050 $24,800 Low $23,160 $26,460 $29,760 Certification a. I/We certify that I am at least 62 years of age, that my spouse and/or other interested party is at least 62 years of age. b. I/We certify that my /our annual income is less than shown in "Annual Income Restrictions" above. C. I/We certify that I/We are reasonably certain that my /our assets /equity as defined in paragraph 8 above will not be sufficient to disqualify me /us on the basis of income. d. I/We certify that my /our current (and previous address) is as stated in paragraphs 1 to 4 above. e. I/We acknowledge and understand that the Arcadia Heritage Park facility is not planned to be nor will it be an assisted living facility, convalescent home, congregate care facility, or nursing home. We acknowledge that the facility is designed and intended to be used by active seniors in reasonably good health. Disabled and/or handicapped seniors or spouses or third parties are eligible to apply. If you are initially selected through the Lottery, you (and your spouse and/or other third party) will be required to provide additional information and documentation verifying all of the information above and as may then be requested. Significant differences in the documentation submitted from this Interest Form or unresponsive reasonable requests for verification will result in removal from further consideration for tenancy for one (1) year. RVPUB \KCV\646177 Exhibit G Page 43 03 2010683 Applicant Signature: ' Applicant Date Print name Other Signature: (if any) Spouse Date Print name Signature: (if any) RVPUMKCV\646177 Other Party Print name Exhibit G Page 44 Date 03 2' 010683' STATE OF CALIFORNIA COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public RVPUB \KCV\646177 Exhibit G Page 45 -- Corporate Officer(s) — Partner(s) — Attorney -in -Fact — Trustee(s) — Subscribing Witness — Guardian/Conservator — Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) 40106 Q3 Jr t STATE OF CALIFORNIA COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public RVP1JB \KCV\646177 Exhibit G Page 46 --- Corporate Officer(s)... -- Partner(s) -- Attorney -in -Fact — Trustee(s) — Subscribing Witness — Guardian/Conservator — Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) R� ° 1 '5 1( STATE OF CALIFORNIA COUNTY OF LOS ANGELES On , 2003, before me, the undersigned notary public, personally appeared personally known to me OR 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. WITNESS my hand and official seal. Signature of Notary Public RVPUB \KCV\646I77 Exhibit G Page 47 — Corporate Officer(s) — Partner(s) — Attorney -in -Fact Trustee(s) — Subscribing Witness -- Guardian/Conservator — Other SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) 1.0 x EXHIBIT H TO HERITAGE PARKF OWNER PARTICIPATION AGREEMENT /LOAN AGREEMENT Project Budget January 3, 2003 HERITAGE PARK AT ARCADIA SCHEDULE OF FORECASTED SOURCES AND USES OF FUNDS FOR THE PERIOD JANUARY 1, 2004 THROUGH JANUARY 1, 2034 SOURCES OF FUNDS CSCDA Bonds $2,443,339 Agency Loan $1,800,000 HOME Funds $1,700,000 Deferred Developer Fee $ 297,655 Tax Credit Equity $2,336,763 Total Sources of Funds $8,577,857 USES OF FUNDS Land and Building Acquisition $1,856,000 Construction "Hard" Costs $4,252,900 Contractor and Developer Fees $1,024,828 Soft Costs $1,444,129 Total Uses of Funds $8,577,857 RVPUB \KCV\646177 Exhibit H 03 2010683