Resolution No. 2014-005 (3)i�/- eoff
CONTRACT/AMENDMENT SIGNATURE ROUTING FORM
CONTRACTOR: L A---,— i FtfLrti t A �'tAMy At" �—� � AVE-y' s
CONTRACT PURPOSE: C >9= Llo w�
CONTRACT IS: ❑ FEDERAL ❑ PREVAILING WAGE ❑ COMPETITIVE SELECTION & NOTICED RFP
[]COMPETITIVE BID & NOTICED INVITATION TO BID
❑ EXEMPT FROM COMPETITIVE PROCESS (APPROVAL ATTACHED)
❑ SERVICES ❑ MATERIALS ❑ BUDGETED ❑ NOT BUDGETED
TOTAL CONTRACT VALUE: $ Charge Acct. No(s)
Amendment Value $ ❑ Contract is an Amendment to Contract No. -- (if applicable)
RESPONSIBLE DEPARTMENT PERSON: Vr.j t A \At `-3 r,F.k PHONE: ext.
AUTHORIZATION: PjApproved by Council on 3 w Lj
(Check One) Resolution Nololq - 05 (if applicable)
Approved by City Administrator on
Note: Attach supporting documentation
❑Amendment Approved by (if applicable)
ROUTING SEQUENCE: (Please Follow In Order — Do not use N/A) Initials Date
(1) Responsible Department Person `Z_2-1_�r�
Checks substance of contract and assembles two (2) copies of
contract, insurance & bond documents, certifies compliance
with Competitive Bidding and Purchasing Ordinance
(2) Liability and Claims
Approves insurance and sureties, if bonds required
(3) Finance (Purchasing)
Checks compliance with Competitive Bidding & Living Wage Ordinances
and reflected in current budget
(4) City Attorney
Approves contract as to form, verifies bonds and insurance included
(5) City Signatory %2 -.�- 7, )6
Signs all copies on behalf of City Cf N�11
(6) City Clerk
Attests signatures, numbers, files contract, insurance and bonds, and
transmits duplicate original to contractor, notifies IT to remove related RFP/bid
notice, notifies any "consultant' of duties to file Form 700, if applicable
Rev 1/27/14
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: December 23, 2015
TO: Kevin Wilson, Director of Public Works, Water & Development Services
FROM: Deborah Juarez, Records Management Assistant�
RE: 52"d Drive Apartments L.P. — Termination and Release of Disposition and Development
Agreement
California Community Reinvestment Corporation — Ground Lease Estoppel
Transmitted herewith for proper processing are the documents listed above related to Resolution No. 2014-
05, which was approved by City Council on March 4, 2014.
Please ensure that a copy of transmittal correspondence and originals of the executed and recorded
miscellaneous documents are sent to the City Clerk's office for the file.
Thank you.
Attachments
Resolution No. 2014-05
Agreement No. 14-008
GROUND LEASE ESTOPPEL
THIS GROUND LEASE ESTOPPEL (this "Estopper') is made as of December 17,
2015, by the CITY OF VERNON, a California charter city and municipal corporation (the
"City") for the benefit of CALIFORNIA COMMUNITY REINVESTMENT CORPORATION, a
California nonprofit public benefit corporation ("CCRC')-
RECITALS
A. The City is the fee simple owner of those certain premises located in the City of
Vernon, County of Los Angeles, State of California and more particularly described in Exhibit
A=1 attached hereto (the "Fee Property");
B. 52"d DRIVE APARTMENTS, L.P., a California limited partnership ("Tenant'),
has leased from the City a portion of the Fee Property (the "Leased Premises"), as legally
described in Exhibit A-2 attached hereto pursuant to the terms of that certain Ground Lease dated
as of March 1, 2014 between the City, as landlord, and Tenant, as tenant (the "Ground Lease");
a Memorandum of Lease between the City and the Tenant with respect to the Ground Lease was
recorded in the Official Records of Los Angeles County, California (the "Official Records") on
March 21, 2014, as Instrument No. 20140286017.
C. This Estoppel is being entered into in connection with the loan (the "Bank Project
Loan") made to Tenant pursuant to that certain Construction and Permanent Loan Agreement
(Affordable Housing — California) ("Loan Agreement') dated as of March 1, 2014, between
Bank of America, N.A. ("Bank") and Tenant. The Bank Project Loan is evidenced by a
promissory note dated March 1, 2014 by Tenant to the order of Bank, in the aggregate face
principal amount of $8,820,340.00 (the "Note") and is secured by, inter alia, that certain
Construction and Permanent Leasehold Deed of Trust, with Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated as of March 1, 2014 and recorded March 21, 2014
as Instrument No. 20140286018 in the Official Records by Tenant, as trustor, for the benefit of
Bank, as beneficiary (the "Deed of Trust'). The Loan Agreement, Note, Deed of Trust and all
other documents executed and delivered in connection with the Bank Project Loan, as the same
may from time to time be amended, restated or otherwise modified, are herein sometimes
collectively referred to as the "Loan Documents."
D. Pursuant to that certain Loan Purchase Agreement (the "Loan Purchase
Agreement) dated as of March 1, 2014 by and among Borrower, Bank and CCRC, CCRC is
purchasing the Bank Project Loan from Bank, and the Bank Project Loan will convert into a term
loan as more fully described in the Note. This Estoppel is being delivered to CCRC in
connection with that conversion.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the City hereby represents, warrants and agrees as follows:
A. Estoppel. As of the date hereof, the City hereby represents, warrants and certifies
to CCRC the following:
(i) The Ground Lease is and remains in full force and effect without any
modification or amendment since its Effective Date, and neither the City nor Tenant shall have
terminated or attempted to terminate the Ground Lease. A complete and accurate copy of the
Ground Lease is attached to this Estoppel as Exhibit B. The City certifies to CCRC that, to the
actual knowledge of the City Director of Public Works, Water and Development Services ("City
Representative"), (a) the Ground Lease is in full force and effect; (b) there are no amendments or
modifications of any kind to the Ground Lease; (c) there are no promises, agreements,
understandings or commitments between the City and Tenant, relating to the Leased Premises,
except the Ground Lease; (d) Tenant has not given the City any notice of termination under the
Ground Lease; (e) the City has not given Tenant any notice of termination or default under the
Ground Lease, and (f) all conditions precedent to the effectiveness of the Ground Lease have
been satisfied. The Commencement Date of the Ground Lease, and accordingly the date that the
Ground Lease term commenced, was March 1, 2014.
(ii) All Base Rent due through the initial term of the Ground Lease has been
paid in full by Tenant. No rent is due under the Ground Lease. Neither the Base Rent nor any
Additional Rent (as defined in the Ground Lease) is currently due and owing to the City. No
event that might trigger Additional Rent has occurred, and no Additional Rent can become due
with the giving of notice or the passage of time, or both.
(iii) To the actual knowledge of the City Representative, there have been no
uncured events of default under the Ground Lease, whether or not the same may be continuing,
including, without limitation, any failure to pay Rent. To the actual knowledge of the City
Representative, neither the City nor the Tenant has any right to exercise any termination rights
granted to it under the terms of the Ground Lease.
(iv) Except as otherwise disclosed to CCRC in writing, the Ground Lease has
not have been amended, modified or changed in any manner since its Effective Date.
(v) A Site Management Plan, as referenced in the Ground Lease, has been
prepared in form and substance acceptable to the City. The Site Management Plan is attached as
Attachment No. 8 to the DDA (as defined below).
(vi) To the actual knowledge of the City Representative, Tenant has complied
with all provisions in the Ground Lease related to hazardous materials remediation of the
Property;
(vii) To the actual knowledge of the City Representative, no default or event
that, with the giving of notice or the passage of time, or both, could become a default, has
occurred under the Ground Lease.
(viii) Each of (a) that certain Disposition and Development Agreement dated as
of February 19, 2013 by and between Borrower and the City (the "DDA") and (b) that certain
Development Agreement (the "Development Agreement') dated as of March 5, 2013 and
recorded March 5, 2013 as Instrument No 20130334907 in the Official Records, by and between
the City and Meta Housing Corporation, as an affiliate of Tenant, have been terminated and are
of no further force and effect as of the date hereof, and the Development Agreement is being
removed, released and terminated of -record.
(ix) Entry into the Ground Lease by City was duly authorized, the Ground
Lease was duly executed and delivered by City, and, to the actual knowledge of the City
Representative, the Ground Lease (a) constitutes the legal, valid and binding obligation and
contract of City and (b) is enforceable against City in accordance with its terms. City's
execution of this Estoppel is also duly authorized, and this Estoppel is duly executed and
delivered by City. The undersigned representative of the City is duly authorized and fully
qualified to execute this Estoppel on behalf of the City.
(x) The City has not assigned, encumbered or otherwise transferred its interest
under the Ground Lease.
(xi) The City acknowledges its consent and approval of CCRC's acquisition of
Bank Project Loan from Bank in furtherance of the conversion of the Bank Project Loan into a
permanent loan. Nothing in the Ground Lease or otherwise has affected Section 14.20) of the
Ground Lease. The City agrees that, with respect to the Loan Documents, (a) CCRC shall be a
permitted "Lender" under the Ground Lease, (b) CCRC shall be entitled to all of the rights and
benefits afforded to a "Lender" under the terms of the Ground Lease, and (c) the Deed of Trust is
and shall continue to be (after assignment to CCRC) a "Permitted Encumbrance."
B. Notice. For all purposes of the Ground Lease, "Lender's" address for notice
purposes shall be as set forth below:
California Community Reinvestment Corporation
225 West Broadway, Suite 120
Glendale, California 91204
Attention: Mary Kaiser, President
CCRC may, by written notice to the City, from time to time change its address for notice
purposes under this Estoppel and the Ground Lease.
C. Reliance. This Estoppel is being entered into with the understanding that it is
being relied upon by CCRC in acquiring the Bank Project Loan; provided, however, that this
Estoppel is provided solely for the benefit of CCRC and may not be relied upon or used by any
other party.
IN WITNESS WHEREOF, the undersigned parties hereunder have caused this
Agreement to be executed by their duly authorized officers or representatives as of the date
hereof.
CITY OF VERNON, a California charter city and
municipal corporation
By:
Name: C LJ `^ %�
Title: City Administrator
TEST:
Maria E. Ayala,&tity Clerk
.19
EXHIBIT A- I
Legal Description of Fee Property
The real property situated in the City of Vernon, County of Los Angeles, State of California,
described as follows:
LOTS 45 TO 53 INCLUSIVE OF TRACT NO. 7923, IN THE CITY OF VERNON, COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 113,
PAGES 80 TO 83 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.
EXHIBIT A-2
Legal Description of Leased Premises
A leasehold estate as created by that certain unrecorded lease dated March 1, 2014, executed by
City of Vernon, a charter city and municipal corporation as lessor and 52nd Drive Apartments,
L.P., a California limited partnership as lessee, as disclosed by a Memorandum of Lease
recorded March 21, 2014 as Instrument No. 20140286017 of Official Records, in and on that
certain Real Property located in the City of Vernon, County of Los Angeles, State of California,
and more particularly described as follows:
LOTS 45 TO 53 INCLUSIVE OF TRACT NO.7923, IN THE CITY OF VERNON, COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 113,
PAGES 80 TO 83 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.
Street Address of Property: 4611, 4627, 4643, 4659 and 4675 52nd Drive, Vernon, CA
APN: 6314-002-901 (formerly 6314-002-900)
EXHIBIT B
Ground Lease
GROUND LEASE
By and Between
CITY OF VERNON,
LESSOR
And
52ND DRIVE APARTMENTS, L.P.,
LESSEE
1085815.5 12098-003
GROUND LEASE
This GROUND LEASE (the "Lease") is made as of March 1, 2014 (the "Commencement
Date"), by and between the CITY OF VERNON, a California charter city and municipal
corporation (the "City" or "Lessor"), and 52" DRIVE APARTMENTS, L.P., a California limited
partnership (the "Lessee").
1. SUBJECT OF LEASE.
The purpose of this Lease is the lease of the "Site" (as hereinafter defined) to Lessee for the
development and operation thereon of a forty-five unit multifamily apartment complex (the
"Housing Development'). This Lease is entered into pursuant to a Disposition and Development
Agreement between City and Lessee dated February 19, 2013 (the "DDA'), and a Regulatory
Agreement between City and Lessee dated March 1, 2014 (the "Regulatory Agreement").
2. LEASE OF THE SITE.
City, for and in consideration of the rents, covenants, and agreements hereinafter reserved
and contained on the part of Lessee to be paid, kept, performed and observed by Lessee, hereby
leases to Lessee, and Lessee hereby leases from City, that certain real property in the City of Vernon
(the "City' shown on the "Site Map" attached hereto as Exhibit "A" and incorporated herein by this
reference, and having the legal description in the "Site Description" attached hereto as Exhibit "B"
and incorporated herein by this reference (the "Site'). Except as expressly provided to the contrary
in this Lease, reference to the Site is to the described land, exclusive of any improvements now or
hereafter located on the land, notwithstanding that any such improvements may or shall be contanied
as affixed to and as constituting part of the real property.
3. LEASE TERM.
Lessee shall lease the Site from City and City shall lease the Site to Lessee for a term
extending from the Commencement Date of this Lease (the date set forth in the first paragraph
hereof) until the sixty-fifth (65th) anniversary of the Commencement Date (the "Initial Term"),
unless sooner terminated as provided for herein. Provided that no Event of Default has occurred and
is continuing under this Lease as of the expiration of the Initial Term, Lessee shall, by delivery of
written notice to City no later than twelve (12) months and no earlier than twenty-four (24) months
prior to the expiration of the Initial Term, have the right to extend the term of this Lease for an
additional ten (10) year period (the "Extended Term") on the same terms and conditions contained in
this Lease, commencing on the expiration of the Initial Term. The Initial Term and the Extended
Term are collectively referred to herein as the "Term."
4. RENT.
4.1 Net Lease. It is the intent of the parties hereto that the rent provided herein shall be
absolutely net to City and that Lessee shall pay all costs, taxes; charges, and expenses of every kind
and nature against the Site and the Housing Development which may arise or become due during the
Term, and which, except for execution hereof, would or could have been payable by City.
1085816.5 1209"3
4.2 Basic Rent. During the Initial Term and Extended Term, Lessee agrees to pay City
advance annual rent in the amount of One Dollar ($1.00) (the "Basic Rent"). The Basic Rent shall
be paid on the Commencement Date and each anniversary thereof. City acknowledges receipt of
Lessee's payment of the Basic Rent in advance for the Initial Term.
4.3 Additional Rent. The parties agree that upon the occurrence of certain events as set
forth below, if Lessee receives cash proceeds as a result of such events, City shall receive a portion
of such proceeds as "Additional Rent." For these purposes, receipt by Lessee of value in a form
other than cash will be treated as receipt by Lessee of the cash equivalent of such value based on the
fair market value of what is received by Lessee.
(a) Determination of Fair Market Rent Upon Certain Events. Additional
Rent shall become due in the event of and upon the occurrence of any of the following: (1) the
refinancing of the Project Loan (as defined in Section 15 hereon), (2) Lessee's sale or assignment of
its interest in the Housing Development and this Lease, (3) the expiration of the Tax Credit
Regulatory Agreement (as defined in the DDA), (4) the commencement of the Extended Term of
this Lease, and (5) affirmation of the Ground Lease in a bankruptcy proceeding. In each such event,
Additional Rent shall be calculated as follows:
The Additional Rent shall be the fair market value ground lease rent for the Site
(including the land but excluding the improvements thereon) pursuant to the Ground Lease, taking
into consideration the restrictions recorded against the Site, to the extent such restrictions remain
applicable and enforceable (the "Applicable Recorded Restrictions' ). The fair market rent shall be
determined by an independent appraisal performed by a qualified, independent appraiser who is
reasonably acceptable to City and Lessee. Such independent appraisal shall determine the fair
market value of the Site, at its highest and best use, but subject to the Applicable Recorded
Restrictions. The appraisal shall further determine the fair market value ground lease rent, subject to
the Applicable Recorded Restrictions, over the remaining Term of this Lease, with an objective that
the City cumulatively receive over the remaining Term of this Lease the fair market value ground
lease rent under the Ground Lease, subject to the Applicable Recorded Restrictions.
Notwithstanding the foregoing, however, in no event shall the Additional Rent in any year (a) be a
negative number, or (b) exceed fifty percent (50%) of the Residual Receipts of the Housing
Development. For purposes hereon; "Residual Receipts" shall mean annual project revenue
(excluding loan proceeds, capital contributions and security deposits received) less the sum of (i)
operating expenses, (ii) debt service, (iii) reserve deposits, (iv) partnership management fees, (v)
deferred developer fees, and (vi) asset management fees, for each calendar year, provided, however,
that if such calculation results in a negative number, Residual Receipts shall be zero for that year.
Upon the occurrence of any of the above events triggering the obligation to pay Additional Rent, the
parties shall mutually agree upon procedures for reporting and determining Residual Receipts.
(b) Payment Upon Refinancing. If in accordance with Section 15 hereof Lessee
borrows money whose repayment is secured, directly or indirectly, by Lessee's leasehold interest
hereunder, in a transaction that does not involve an Assignment as described in paragraph (c) below,
Lessee shall pay City a sum equal to fifty percent (50%) of the Net Financing Proceeds (as defined
below) as Additional Rent ("City's Pro Rata Share of the Net Financing Proceeds"). If there are
other Project Loans or Permitted Encumbrances which also require payment of a portion of Net
1485816.5 IM99-003 2
Financing Proceeds, Lessee shall use good faith efforts to reach an agreement with such other lender
or lenders as to an equitable distribution of Net Financing Proceeds between or among such parties.
Such Additional Rent shall be due and payable immediately upon the funding of the loan, and shall
be payable in addition to any other sums payable by Lessee under this Lease. Lessee shall provide
City a complete accounting of the Net Financing Proceeds. No Additional Rent shall be payable
upon the closing of the initial construction loan and permanent loan conversion permitted pursuant to
Section 401 of the DDA. For purposes of this paragraph, "Net Financing Proceeds" shall mean the
initial principal sum of the new loan, less (i) all amounts necessary to repay encumbrances to be
satisfied in connection therewith, if such encumbrances were approved or permitted in accordance
with this Lease or otherwise expressly consented to by City in writing, (ii) actual and reasonable
costs of refinancing, and (iii) any amount by which the refinancing lender requires Lessee to increase
Lessee's reserves for the Housing Development as a condition of such refinancing.
(c) Payment Upon Sale or Assignment. If Lessee sells or assigns its interest in
the Housing Development and this Lease, directly or indirectly, other than through a Permitted
Transfer (as defined in Section 14.2 hereof), Lessee shall pay City a sum equal to fifty percent (500/0)
of the Net Sates Proceeds (as defined below) as Additional Rent ("City's Pro Rata Share of the Net
Sales Proceeds"). If there are other Project Loans or Permitted Encumbrances which also require
payment of a portion of Net Sales Proceeds, Lessee shall use good faith efforts to reach an
agreement with such other lender or lenders as to an equitable distribution of Net Sales Proceeds
between or among such parties. Such Additional Rent shall be due and payable immediately upon
the closing of the sale or assignment, and shall be payable in addition to any other sums payable by
Lessee under this Lease. Lessee shall provide City a complete accounting of the Net Sale Proceeds.
For purposes of the fast sale or assignment, "Net Sales Proceeds" shall mean the total purchase price
of the Housing Development payable to Lessee, less (i) all amounts necessary to repay
encumbrances to be satisfied in connection therewith, if such encumbrances were approved or
permitted in accordance with this Lease or otherwise expressly consented to by City in writing; (ii)
actual and reasonable costs of sale, and (iii) any amount paid to the limited partner in Lessee (who
purchased such interest in order to benefit from the favorable tax treatment arising from the Housing
Development) for any repurchase or redemption of such partner's limited partnership interest in
Lessee completed by Lessee or its affiliates pursuant to a purchase option and exercised in
accordance with the terms of this Lease_ For purposes of subsequent sales or assignments, "Net
Sales Proceeds" shall mean the total purchase price of the Housing Development payable to Lessee,
less the purchase price paid by Lessee.
(d) Payment of Additional Rent into Capital Account. City may elect, at its
sole discretion, for all or a portion of the Additional Rent to be deposited directly into a capital
account to be established by Lessee instead of being paid to City. In such event City and Lessee
shall mutually agree upon the permitted uses of the capital account, which may include such uses as
specified capital improvements to the Housing Development and social service programs for the
benefit of the residents of the Housing Development.
(e) Application of Additional Rent Payments to Repayment of City Loan.
Until the loan provided by City to Lessee pursuant to that certain Loan Agreement dated July 3,
2013 (the "City Loan") has been paid in full, any payments of Additional Rent pursuant to
IM816.5 12M-W3
paragraphs (a), (b) and (c) of this Section 4.3 shall be applied to the repayment of the City Loan and
shall be credited against any amounts owing thereunder.
4A Payment of Rent. All rent that becomes due and payable pursuant to this Lease shall
be paid to City at the address of City listed in Section 25.7 or such other place as City may from time
to time designate by written notice to the Lessee without notice or demand, and without setoff,
counterclaim, abatement, deferment, suspension or deduction.
-�013_91331_li_I_iW1$ I
5.1 Use of the Site. Lessee covenants and agrees for itself, its successors and assigns,
that during the Tenn, the Site and the Housing Development shall be devoted to those uses as set
forth in this Lease and the Regulatory Agreement. Lessee covenants and agrees to cause the
Housing Development to be used only for the purposes set forth in Section 6 hereof, and no other
uses without the prior approval of the City, which approval may be given or withheld as provided
therein_
5.2 Only Lawful Uses Permitted Lessee shall not use the Site or the Housing
Development for any purpose that is in violation of any law, ordinance or regulation of any federal,
state, county or local governmental agency, body or entity. Furthermore, Lessee shall not maintain
or commit any nuisance or unlawful conduct (as now or hereafter defined by any applicable statutory
or decisional law) on the Site or the Housing Development, or any part thereof.
5.3 Site Management Plan; Property Management. Lessee has prepared a "Site
Management Plan" which sets forth in detail Lessee's property management duties, a marketing plan,
a tenant selection process, a security system and crime prevention program, the procedures for the
collection of rent, the procedures for eviction of tenants, the rules and regulations of the Housing
Development and manner of enforcement, a standard lease form, an operating budget, the identity of
the manager of the Housing Development (the "Property Manager"), a resident services program,
and other matters relevant to the management of the Housing Development. The Site Management
Plan shall prohibit the Property Manager from lobbying, influencing, or attempting to influence any
residents of the Housing Development or other registered voters of the City with respect to any
matters which require the approval of the City or the electorate of the City. Any violation of this
Section 5.3 shall be deemed a material breach of this Lease. The Site Management Plan is attached
hereto as Exhibit D and incorporated herein. The Site Management Plan may be revised from time
to time with the approval of the City. The management of the Housing Development shall be in
compliance with the Site Management Plan which is approved by the City. If the City determines
that the performance of the Property Manager is deficient based upon the standards set forth in the
Site Management Plan and in this Lease, the City shall provide notice to Lessee of such deficiencies,
and Lessee shall use its best efforts to correct such deficiencies. In the event that such deficiencies
have not been cured within the time set forth in this Lease, the City shall have the right to require
Lessee to immediately remove and replace the Property Manager with another property manager or
property management company which is reasonably acceptable to the City, which is not related to or
affiliated with Lessee, and which has not less than five (5) years' experience in property
management, including significant experience managing housing facilities of the size, quality and
scope of the Housing Development.
1085816.5 12098-M 4
5.4 Selection of Tenants. Lessee shall be responsible for the selection of tenants for the
Housing Units in compliance with lawful and reasonable criteria, as set forth in the Site Management
Plan, and according to a system which provides an agreed upon priority for persons employed or
residing in the City of Vernon or within a I mile radius as measured from the center of the Site. The
Site Management Plan shall include a system for the random selection of tenants from a pool of
applicants. Tenants shall meet criteria which is reasonable and customary for similar multifamily
developments. Tenant selection shall be made in an open and public manner. The tenant selection
system in the Site Management Plan shall be designed to prevent favoritism and outside influences
of any kind in the selection process. The tenant selection system shall provide for due diligence by
Lessee in evaluation of the applications for eligibility criteria, including the basis of any requested
priority. Representatives of the City shall be entitled to enter, inspect the records of, and audit the
Housing Development with respect to the tenant selection process as provided in Section 25.5
hereof. Any violation of the tenant selection system shall be deemed a material breach of this Lease.
5.5 Capital Reserve Requirements. Lessee shall also, or cause the Property Manager
to, annually set aside an amount of Three Hundred Dollars ($300) per Housing Unit (or such larger
amount as may be required by a Housing Development lender), from the gross rents received from
the Housing Development, into a separate interest -bearing trust account in the name of Lessee (the
"Capital Replacement Reserve"); provided, however, to the extent Lessee is required by any lender
to maintain a separate account to hold deposits for capital reserves, the amount of such deposits shall
be credited towards Lessee's obligations under this section. Such amount shall be adjusted annually
by the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor for
All Urban Consumers, Los Angeles — Riverside — Orange County, California (all items),1982-84 =
100, or its successor index (the "Consumer Price Index"). Funds in the Capital Replacement
Reserve shall be used for capital replacements to the Housing Development fixtures and equipment
which are normally capitalized under generally accepted accounting principles. The non -availability
of funds in the Capital Replacement Reserve does not in any manner relieve Lessee of the obligation
to undertake necessary capital repairs and improvements and to continue to maintain the Housing
Development in the manner prescribed herein. Not less than once per year, Lessee, at its expense,
shall submit to the City an accounting for the Capital Replacement Reserve. Capital repairs to and
replacement of the Housing Development shall include only those items with a long useful life,
including without limitation the following: carpet and drape replacement; appliance replacement;
exterior painting, including exterior trim; hot water heater replacement; plumbing fixtures
replacement, including tubs and showers, toilets, lavatories, sinks, faucets; air conditioning and
heating replacement; asphalt repair and replacement, and seal coating; roofing repair and
replacement; landscape tree replacement; irrigation pipe and controls replacement; gas line pipe
replacement; lighting fixture replacement; common area furniture replacement; common area
repainting, and uninsured losses due to casualties such as earthquakes.
5.6 Naming Rights. City shall have the exclusive non-commercial right to select the
name of the Housing Development in its sole discretion to honor one or more civic or business
leaders, as the City Council may designate. Lessee agrees to cooperate in the placement ofa suitable
monument or other feature to memorialize this honor, at the City's expense. Lessee shall use the
name selected by City on all exterior and interior project signage, written materials and letterhead,
leases and other project documents, and shall verbally refer to the Housing Development by the
selected name. The parties shall jointly agree in advance on the scheduling of any official naming
1085816,5 12098-003
ceremonies, and the press announcements regarding such ceremonies, and both parties shall have the
right to participate in any such naming ceremonies.
5.7 Prohibition on Lobbying. Lessee and its officers and employees shall not lobby,
influence, or attempt to influence any residents of the Housing Development or other registered
voters of the City with respect to any matters which require the approval of the City or the electorate
of the City. Any violation of this Section 5.7 shall be deemed a material breach of this Lease.
6. OPERATING COVENANT.
6.1 Operation in Accordance with Agreement. The Lessee covenants and agrees that,
at all times during the Term of this Lease, Lessee shall operate the Housing Development as a forty-
five unit multifamily apartment project. All uses conducted on the Site, including, without
limitation, all activities undertaken by the Lessee pursuant to this Lease, shall conform to all
applicable provisions of the City Municipal Code, and the recorded documents pertaining to and
running with the Site.
6.2 Subordination of Affordability Requirements. City has entered into a
Subordination Agreement by and among Bank of America, N.A., Lessee and City dated March 1,
2014, which subordinates the affordable housing covenants set forth in the Regulatory Agreement to
the liens of the construction loan and permanent loan. In connection with any future refinancing of
such loans, and in the event that the City finds that an economically feasible method of financing for
the construction and operation of the Housing Development, without the subordination of the
affordable housing covenants as may be set forth in the Regulatory Agreement, is not reasonably
available, the City shall make the affordable housing covenants set forth in the Regulatory
Agreement junior and subordinate to the deeds of trust and other documents required in connection
with such refinancing for the Housing Development approved pursuant to Section 15 hereof. Any
subordination agreement entered into by the City with respect to such refinancing shall contain
written commitments which the City finds are reasonably designed to protect City's investment in
the event of Default, such as either of the following: (a) a right of City to cure a default on the loan
prior to foreclosure, or (b) a right of City to negotiate with the lender after notice of default from the
lender and prior to foreclosure.
7. UTILITIES AND TAXES.
7.1 Utilities. Lessee shall pay all charges for gas, electricity, garbage collection, and
other utilities furnished to the Site and the Housing Development and all hookup or similar charges
or assessments for utilities levied against the Site and the Housing Development for any period
included within the Term.
7.2 Real Estate Taxes.
(a) Lessee covenants and agrees to pay before delinquency all real estate taxes,
assessments and liens of every kind and nature upon Lessee's possessory interest in the Site and the
Housing Development. "Real estate taxes" shall mean all real estate taxes, assessments for
improvements to the Site, public agency water and sewer rates and charges, or any other assessments
IM816.5 12099-003 6
or taxes, which shall be levied against the Site or the Housing Development, or any interest therein,
and which become a lien thereon and accrue during the Term.
(b) Lessee shall have the right to apply for and receive a welfare exemption from
the payment of property taxes pursuant to Revenue and Taxation Code Section 214(g) (or successor
statute).
(c) Lessee shall have the right to contest the amount or validity of any real estate
taxes, in whole or in part, by appropriate administrative and legal proceedings, without any costs or
expense to City.
7.3 Personal Property. Lessee covenants and agrees to pay before delinquency all
personal property taxes, assessments and liens of every kind and nature upon all personal property as
may be from time to time situated within the Site and the Housing Development.
S. OWNERSHIP OF IMPROVEMENTS, FIXTURES AND FURNISHINGS.
8.1 Ownership of Improvements During Term. All improvements constructed on the
Site by Lessee as permitted by this Lease (the "Housing Development") shall, during the Term, be
and remain the property of Lessee; provided, however, that Lessee shall have no right to waste the
Housing Development, or to destroy, demolish or remove the Housing Development except as
otherwise permitted pursuant to this Lease; and provided further that Lessee's rights and powers
with respect to the Housing Development are subject to the terms and limitations of this Lease.
8.2 Ownership of Land During Term. The Site (exclusive of the Housing
Development) shall, throughout the Term, be and remain the property of City. City represents and
warrants to Lessee that it has the power and authority to enter into this Lease and to perform all
obligations and agreements incidental or pertinent to this Lease. City shall not incur any lien or
encumbrance on or against the Site unless such lien or encumbrance is a Permitted Fee
Encumbrance. For purposes of this Lease, a "Permitted Fee Encumbrance" shall mean any of the
following: (a) a lien for real or personal property taxes, assessments or other governmental charges
or levies on the Property that are not yet delinquent or that are being contested in good faith by
appropriate action with sufficient bonds or reserves therefor; (b) an inchoate mechanic's or material
supplier's lien or similar lien for work, materials, services or equipment provided to the Housing
Development for which payment is not delinquent; or (c) the covenants, conditions, restrictions,
reservations, rights, rights -of -way, and easements of record prior to the recordation of the
Memorandum of Lease.
9. INDEMNIFICATION: FAITHFUL PERFORMANCE.
Lessee shall not suffer or permit any liens to be enforced against the City's fee simple estate
as to the Site, to City's fee simple estate in reversion of the Housing Development, nor against
Lessee's leasehold interest therein by reason of work, labor, services or materials supplied or
claimed to have been supplied to Lessee or anyone holding the Site and the Housing Development,
or any part thereof, through or under Lessee. Lessee agrees to defend, indemnify, and hold City and
its officers, officials, employees, agents, and representatives, harmless against such liens. If any
such lien shall at any time be filed against the Site or the Housing Development, Lessee shall, within
1085816.5 120"-003 7
thirty (30) days after notice to Lessee of the filing thereof, cause the same to be discharged of record;
provided, however, that Lessee shall have the right to contest the amount or validity, in whole or in
part, of any such lien by appropriate proceedings but in such event, Lessee shall notify City and
promptly bond such lien in the manner authorized by law with a responsible surety company
qualified to do business in the State of California or provide other security acceptable to City.
Lessee shall prosecute such proceedings with due diligence. Nothing in this Lease shall be deemed
to be, nor shall be construed in any way to constitute, the consent or request of City, express or
implied, by inference or otherwise, to any person, firm or limited partnership for the performance of
any labor or the furnishing of any materials for any construction, rebuilding, alteration or repair of or
to the Site, the Housing Development, or any part thereof. Prior to commencement of construction
of the Housing Development on the Site, or any repair or alteration thereto, Lessee shall give City
not less than thirty (30) days advance notice in writing of intention to begin said activity in order that
nonresponsibility notices may be posted and recorded as provided by State and local laws.
10. MAINTENANCE AND REPAIR
Lessee agrees to assume full responsibility for the management, operation and maintenance
of the Housing Development and the Site throughout the Term without expense to City, and to
perform all repairs and replacements necessary to maintain and preserve the Housing Development
and the Site in good repair, in a neat, clean, safe and orderly condition, in accordance with the
standard of maintenance of high quality apartment projects within Los Angeles County, California,
reasonably satisfactory to City and in compliance with all applicable laws. Lessee shall maintain the
Housing Development, all buildings, all exterior facades, all sidewalks, and all exterior areas, in a
safe and sanitary fashion. The Lessee agrees to provide utility services, administrative services,
supplies, contract services, maintenance, maintenance reserves, and management which are
necessary for the maintenance of the Housing Development. Lessee agrees that City shall not be
required to perform any maintenance, repairs or services or to assume any expense in connection
with the Housing Development and the Site. Lessee hereby waives all rights to make repairs or to
cause any work to be performed at the expense of City as may be provided for in Section 1941 and
1942 of the California Civil Code, if applicable. The Lessee shall manage and maintain the Housing
Development on the Site in conformity with the City Municipal Code. Parking lots, lighting
fixtures, trash enclosures, and all areas which can be seen from the adjacent streets shall be kept free
from any debris or waste materials by regularly scheduled maintenance. If at any time Lessee fails
to maintain the Housing Development in accordance with this Lease and such condition is not
corrected within five days after written notice from the City with respect to graffiti, debris, and waste
material, or thirty days after written notice from the City with respect to general maintenance,
landscaping and building improvements, then the City, in addition to whatever remedy it may have
at law or at equity, shall have the right to enter upon the applicable portion of the Housing
Development and perform all acts and work necessary to protect, maintain, and preserve the Housing
Development, and to attach a lien upon the Housing Development, or to assess the Housing
Development, in the amount of the expenditures arising from such ants and work of protection,
maintenance, and preservation by the City and/or costs of such cure, including a reasonable
administrative charge, which amount shall be promptly paid by Lessee to the City upon demand.
1085816.5 12098-W3
11. ENVIRONMENTAL MATTERS.
11.1 Definitions. For the purposes of this Lease, unless the context otherwise specifies or
requires, the following terms shall have the meanings herein specified:
(a) The term "Hazardous Materials" shall mean any substance, material, or waste
which is or becomes regulated by any local governmental authority, the County of Riverside, the
State of California, regional governmental authority or the United States Government, including, but
not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely
hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed
pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5
(Hazardous Waste Control Law)), (ii) defined as a "hazardous substance" under Section 25 316 of the
California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous
Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or
"hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20,
Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20,
Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos,
(vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely
hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Division 4,
Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water
Act (33 U.S.C. § 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. §9601 et seq. "Hazardous Materials" shall not include
such products in quantities as are customarily used in the construction, maintenance, rehabilitation or
management of residential developments or associated buildings and grounds, or typically used in
residential activities in a manner typical of other comparable residential developments, or substances
commonly ingested by a significant population living within the Housing Development, including
without limitation alcohol, aspirin, tobacco and saccharine.
(b) The term "Hazardous Materials Contamination" shall mean the contamination
(whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater,
air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the
buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result
of Hazardous Materials at any time (whether before or after the Date of Lease) emanating from the
Site.
(c) The term "Governmental Requirements" shall mean all past, present and
future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States,
the state, the county, the city, or any other political subdivision in which the Site is located, and any
other state, county city, political subdivision, agency, instrumentality or other entity exercising
jurisdiction over City, Lessee or the Site.
11.2 Site Evaluation. Pursuant to Sections 205 and 206 of the DDA, Lessee has had an
opportunity, prior to the Commencement Date of this Lease, to engage its own environmental
1085816.5 12098-003 9
consultant to make such investigations of the Site as Lessee has deemed necessary, and Lessee has
approved the environmental condition of the Site. Lessee assumes any and all responsibility and
Liabilities (as defined in Section 11.3 of this Lease) for all Hazardous Materials Contamination of
the Site which occurs during the Term of this Lease or extension thereof.
11.3 Indemnification. Upon and after the Commencement Date of this Lease, Lessee
agrees to indemnify, defend and hold City harmless from and against any claim, action, suit,
proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense
(including, without limitation, reasonable attorneys' fees), resulting from, arising out of, or based
upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials on,
under, in or about, or the transportation of any such Hazardous Materials to or from, the Site during
the term of this Lease, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule,
regulation, permit, judgment or license relating to the use, generation, release, discharge, storage,
disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Site during
the term of this Lease, excepting only any such loss, liability, claim, or judgment arising out of the
intentional wrongdoing or gross negligence of City, or its officers, officials, employees, members,
agents, volunteers, or representatives. This indemnity shall include, without limitation, any damage,
liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding,
including injunctive, mandamus, equity or action at law, for personal injury (including sickness,
disease or death), tangible or intangible property damage, compensation for lost wages, business
income, profits or other economic loss, damage to the natural resource or the environment, nuisance,
contamination, leak, spill, release or other adverse effect on the environment. Lessee's obligations
under this Section 11.3 shall survive the expiration of this Lease.
City agrees to indemnify, defend and hold Lessee and its officers, employees, agents and
representatives harmless from and against any claim, action, suit, proceeding, damage, liability,
deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys'
fees), resulting from, arising out of, or based upon the negligent acts or willful 'mis onduct of the
City or its officers, employees, agents, representatives or contractors with respect to the disposal or
handling of any Hazardous Materials on, under, in or about, or the transportation of any such
Hazardous Materials to or from, the Site. At the request of the City, the Lessee shall cooperate with
and assist the City in its defense of any such claim, action, suit, proceeding, loss, cost, damage,
liability, deficiency, fine, penalty, punitive damage, or expense; provided that the Lessee shall not be
obligated to incur any expense in connection with such cooperation or assistance.
11.4 Duty to Prevent Hazardous Materials Contamination. Lessee shall take all
commercially reasonable precautions to prevent the release of any Hazardous Materials into the
environment. Such precautions shall include compliance with all Governmental Requirements with
respect to Hazardous Materials. In addition, Lessee shall install and utilize such equipment and
implement and adhere to such procedures as are consistent with commercially reasonable standards
generally applied by similar industrial facilities as respects the disclosure, storage, use, removal, and
disposal of Hazardous Materials.
11.5 Obligation of Lessee to Remediate Premises. Lessee shall, at its sole expense,
design and install a vapor barrier and a venting system to reduce the vapor release from the Site to an
acceptable level, and perform all Remediation required pursuant to the DDA. Notwithstanding the
1085816.5 12099-003 10
obligation of Lessee to indemnify City pursuant to Section 11.3 of this Lease, Lessee shall, at its sole
cost and expense, promptly take (i) all actions required by any federal, state, regional, or local
governmental. agency or political subdivision or any Governmental Requirements and (ii) all actions
necessary and commercially reasonable to develop and operate the Housing Development in
accordance with this Lease, which requirements or necessity arise from the presence upon, about or
beneath the Site of any Hazardous Materials or Hazardous Materials Contamination no matter when
occurring. Such actions shall include, but not be limited to, the investigation of the environmental
condition of the Site, the preparation of any feasibility studies or reports and the performance of any
cleanup, remedial, removal or restoration work. Lessee shall take all actions necessary to promptly
restore the Site to an environmentally sound condition for the uses contemplated by this Lease
notwithstanding any lesser standard of remediation allowable under applicable Governmental
Requirements. The Lessee's duties hereunder shall not affect any rights Lessee has pursuant to
Section 11.3 hereof.
11.6 Right of Entry. Notwithstanding any other term or provision of this Lease, Lessee
shall permit City or its agents or employees to enter the Site at any time during normal business
hours (except in the event of an emergency ), without prior notice in the event of an emergency, and
with not less than forty-eight (48) hours advance notice if no emergency is involved, to inspect,
monitor and/or take emergency or long-term remedial action with respect to Hazardous Materials
and Hazardous Materials Contamination on or affecting the Site, or to discharge Lessee's obligations
hereunder with respect to such Hazardous Materials and Hazardous Materials Contamination when
Lessee has failed to do so after notice from City and an opportunity to cure such deficiency. All
costs and expenses incurred by City in connection with performing Lessee's obligations hereunder
shall be reimbursed by Lessee to City within thirty (30) days of Lessee's receipt of written request
therefor.
11.7 Storage or Handling of Hazardous Materials. Lessee, at its sole cost and expense,
shall comply and shall cause its tenants to comply with all Governmental Requirements for the
storage, use, transportation, handling and disposal of Hazardous Materials on or about the Site,
including without limitation wastes generated in connection with the uses conducted on the Site. In
the event Lessee will store, use, transport, handle or dispose of any Hazardous Materials, Lessee
shall notify City in writing at least ten (10) days prior to their first appearance on the Site and
Lessee's failure to do so shall constitute a material default under this Lease. Lessee shall conduct all
monitoring activities required or prescribed by applicable Governmental Requirements, and shall, at
its sole cost and expense, comply with all posting requirements of Proposition 65 or any other
similarly enacted Governmental Requirements. In addition, in the event of any complaint or
governmental inquiry, or if otherwise deemed necessary by City in its reasonable judgment, City
may require Lessee, at Lessee's sole cost and expense, to conduct specific monitoring or testing
activities with respect to Hazardous Materials on the Site. Such monitoring programs shall be in
compliance with applicable Governmental Requirements, and any program related to the specific
monitoring of or testing for Hazardous Materials on the Site, shall be satisfactory to City, in City's
reasonable discretion. Lessee shall further be solely responsible, and shall reimburse City, for all
costs and expenses incurred by City arising out of or connected with the removal, clean-up and/or
restoration work and materials necessary to return the Site and any property adjacent to the Site
affected by Hazardous Materials emanating from the Site to their condition existing at the time of the
Lessee's Site Evaluation. Lessee's obligations hereunder shall survive the termination of this Lease.
1085816.5 12N8-003 11
11.8 Environmental Inquiries. Lessee shall notify City, and provide to City a copy or
copies, of the following environmental permits, disclosures, applications, entitlements or inquiries
relating to the Side: notices of violation, notices to comply, citations, inquiries, clean-up or
abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and
reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous
Materials and underground tanks, and Lessee shall report to City, as soon as possible after each
incident, any unusual, potentially important incidents.
In the event of a release of any Hazardous Materials into the environment, Lessee shall, as
soon as possible after the release, furnish to City a copy of any and all reports relating thereto and
copies of all correspondence with governmental agencies relating to the release. Upon request of
City, Lessee shall furnish to City a copy or copies of any and all other environmental entitlements or
inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits
and reports including, without limitation, those reports and other matters which may be characterized
as confidential.
12. ALTERATION OF UWPROVEMENTS.
Upon completion of the Housing Development pursuant to the requirements of the DDA,
Lessee shall not make or permit to be made any structural alteration of the exterior of the Housing
Development, nor demolish all or any part of the Housing Development, without obtaining all
required City permits and entitlements, and without obtaining the prior written consent of City,
which consent shall not be unreasonably withheld. The foregoing shall not prohibit or restrict the
repair and/or replacement of the Housing Development by Lessee in accordance with Section 10
hereof. In requesting such consent of the City Lessee shall submit to City detailed plans and
specifications of the proposed work and an explanation of the need and reasons therefor. This
provision shall not limit or set aside any obligation of Lessee under this Lease to maintain the
Housing Development and the Site in a clean and safe condition, including structural repair and
restoration of damaged Housing Development. City shall not be obligated by this Lease to make any
improvements to the Site or to assume any expense therefor. Lessee shall not commit or suffer to be
committed any waste or impairment of the Site or the Housing Development, or any part thereof,
except as otherwise permitted pursuant to this Lease.
13. DAMAGE OR DESTRUCTION.
13.1 Obligation to Repair and Restore Damage Due to Casualty Covered by
Insurance. Subject to Section 13.3 below and the provisions of all Mortgages, if the Housing
Development shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire
or other casualty required to be insured against by Lessee, Lessee shall promptly proceed to obtain
insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon
receipt of insurance proceeds, to promptly and diligently commence the repair or replacement ofthe
Housing Development to substantially the same condition as the Housing Development is required to
be maintained in pursuant to this Lease, whether or not the insurance proceeds are sufficient to cover
the actual cost of repair, replacement, or restoration, and Lessee shall complete the same as soon as
possible thereafter so that the Housing Development can be occupied in accordance with this Lease.
Subject to Section 25.22, in no event shall the repair, replacement, or restoration period exceed one
1095816.5 12W&003 12
(1) year from the date Lessee obtains insurance proceeds unless the City Administrator or designee,
in his or her sole and absolute discretion, approves a longer period of time. City shall cooperate with
Lessee, at no expense to City, in obtaining any governmental permits required for the repair,
replacement, or restoration. If, however, the then -existing laws of any other governmental agencies
with jurisdiction over the Site or the provisions of any Mortgages do not permit the repair,
replacement, or restoration, Lessee may elect not to repair, replace, or restore the Housing
Development by giving notice to City (in which event Lessee will be entitled to all insurance
proceeds, subject to Lessee's obligations to Mortgagees or other third parties, but Lessee shall be
required to remove all debris from the Site) or Lessee may reconstruct such other improvements on
the Site as are consistent with applicable land use regulations and approved by the City, and all other
governmental agency or agencies with jurisdiction. In the event Lessee elects not to repair, replace,
or restore and give City notice of such election as provided herein, this Lease shall terminate.
13.2 Continued Operations, During any period of repair, Lessee shall continue, or cause
the continuation of, the operation of the Housing Development on the Site to the extent reasonably
practicable from the standpoint of prudent business management.
13.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance.
If the Housing Development is completely destroyed or substantially damaged by a casualty for
which Lessee is not required to (and has not) insured against, then City shall deliver written notice to
Lessee of its obligations under this Section 13.3 within thirty (30) days of such event of substantial
damage or destruction, and Lessee shall not be required to repair, replace, or restore such
improvements and may elect not to do so by providing City with written notice of election not to
repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In
such event, Lessee shall remove all debris from the applicable portion of the Site. As used in this
Section 13.3, "substantial damage" caused by a casualty not required to be (and not) covered by
insurance shall mean damage or destruction which is fifteen percent (15%) or more of the
replacement cost of the improvements comprising the Housing Development. In the event that the
City delivers such notice to Lessee but Lessee does not timely elect not to repair, replace, or restore
the Housing Development as set forth in the first sentence of this Section 13.3, Lessee shall be
conclusively deemed to have waived its right not to repair, replace, or restore the Housing
Development and thereafter Lessee shall promptly commence and complete the repair, replacement,
or restoration of the damaged or destroyed Housing Development in accordance with Section 13.1
above and continue operation of the Housing Development during the period of repair (if
practicable) in accordance with Section 13.2 above. In the event Lessee elects not to repair, replace,
or restore, and gives City notice of such election as provided herein, this Lease shall terminate,
subject to the provisions of Section 24.5 hereof. Notwithstanding the foregoing, however, no such
termination shall occur so long as (i) the holder of any Mortgage provides a notice of default to
Lessee based on such failure to repair, replace and rebuild and thereafter seeks to obtain possession
of the Site for the purposes of causing such rebuilding to occur, or the holder of the Mortgage or its
designee becomes the Lessee under a New Lease pursuant to section 24.5(e) hereof and thereafter
seeks to obtain possession of the Site for the purposes of causing such rebuilding to occur, and (ii)
such party clears any debris and maintains the property in a safe condition, and (iii) such party
commences, diligently pursues and completes the rebuilding in accordance with a commercially
reasonable schedule which is mutually acceptable to such party and City.
1085916.5 1209"3 13
14. SALE, ASSIGNMENT, LEASE OR OTHER TRANSFER
14.1 Prohibition of Sale, Assignment, Lease or Transfer. Except for Permitted
Transfers as provided pursuant to Section 14.2 hereof, Lessee shall not sell, assign, Lease, or
otherwise transfer this Lease or any right therein, nor make any total or partial sale, assignment,
lease, or transfer in any other mode or form of the whole or any part of the Site or the Housing
Development (each of which events is referred to in this Lease as an "Assignment'), without prior
written approval of City. Any purported assignment without the prior written consent of City, except
for assignments permitted pursuant to 14.2 hereof, shall render this Lease absolutely null and void
and shall confer no rights whatsoever upon any purported assignee or transferee. Lessee shall only
assign, Lease, or transfer the Site and the Housing Development as a whole and is not permitted to
subdivide the Site and the Housing Development for the duration of this Lease without the prior
written approval of City. Notwithstanding any provision in this Section 14.1 to the contrary, in no
event shall Lessee make any assignment which would or could be effective beyond the Term
(including extensions thereof) without the prior written consent of the City. City may assign or
transfer any of its rights or obligations under this Lease with the approval of the Lessee, which
approval shall not be unreasonably withheld.
14.2 Permitted Transfers. Notwithstanding any other provision of this Lease to the
contrary, City approval of an assignment of this Lease or conveyance of the Housing Development,
or any part thereof, shall not be required in connection with any of the following:
(a) The conveyance or dedication of any portion of the Site to the City, or the
granting of easements or permits to facilitate construction of the Housing Development.
(b) Any required assignment for financing purposes (subject to such financing
being considered and approved by City), including the grant of a deed of trust to secure the funds
necessary for land acquisition, construction and permanent financing of the Housing Development.
(c) Any transfers to a limited partnership formed for the purpose of obtaining Tax
Credits for the Housing Development, in which Meta Housing Corporation (or an entity wholly
owned by Meta Housing Corporation or John Huskey) is the administrative general partner and
Western Community Housing, Inc. (or a limited liability company wholly owned by Western
Community Housing, Inc.) is the managing general partner, subject to City approval of the identity
of the limited partners.
(d) The lease of Housing Units to qualified tenants.
(e) Lessee's conveyance of the Site or the limited partnership interest in Lessee to
Meta Housing Corporation, or another entity affiliated with and controlled by Meta Housing
Corporation or John Huskey, in accordance with the option to purchase set forth in Lessee's
partnership agreement.
(f) A transfer of a general partnership interest in Lessee to a nonprofit managing
general partner entity.
I OW 16.5 12M-M 14
(g) Notwithstanding anything to the contrary contained herein, without the
consent of the City, each Investor Limited Partner shall have the right to assign its interests as
limited partner in the Lessee to an entity which is controlled by such Investor Limited Partner or is
under common control with such Investor Limited Partner.
(h) Notwithstanding anything to the contrary contained herein, Investor Limited
Partner shall have the right to remove either general partner of Lessee, or both general partners, and
substitute any Investor Limited Partner or an affiliate thereof as a general partner of the Lessee,
pursuant to the Partnership Agreement, without City's consent. Any proposed replacement of a
general partner with an entity other than an Investor Limited Partner or an affiliate thereof will be
subject to City's prior consent, which shall not be unreasonably withheld.
(i) The foreclosure or deed in lieu thereof by a Mortgagee of its interest in the
Housing Development pursuant to a Project Loan.
0) California Community Reinvestment Corporation's acquisition of the Project
Loan from Bank of America N.A. in furtherance of the conversion of such loan.
In the event of an assignment by Lessee under subparagraph (c) or (e) above not requiring
City's prior approval, Lessee nevertheless agrees that at least thirty (30) days prior to such
assignment it shall give written notice to City of such assignment and provide to the City an
assignment and assumption agreement reasonably satisfactory to City. Upon the City's approval of
such assignment and assumption agreement, the assigning Lessee shall not be responsible for any
obligations hereunder which arise after the effective date of the assignment and assumption
agreement, provided that the assigning Lessee shall retain all indemnification obligations under this
Lease.
IS. FINANCING.
Lessee may, at any time and from time to time during the Term, upon prior written notice to
City and subject to the requirements of Sections 401 - 408 of the DDA, mortgage, pledge,
hypothecate or otherwise encumber in connection with project financing to a federally or state
chartered bank or savings and loan, a life insurance company, a mortgage company, a pension fund,
investment trust or similar institutional lender or trustee as required in connection with project
financing (herein called "Lender"), by deed of trust or mortgage or other security instrument, all of
Lessee's right, title and interest pursuant to this Lease and the leasehold estate hereby ("Project
Loan'. Project Loans shall include the construction loan and permanent loan approved by the City
pursuant to Section 401 of the DDA as set forth on Exhibit E attached hereto, and the refinancing of
the permanent loan, provided that the principal amount of the refinancing does not exceed the then
current amount owed pursuant to the loan, and the interest rate and other terms and conditions of the
refinancing do not exceed current market rates. The encumbrances securing the Project Loans,
together with refinancing of the Project Loans and any other loan or encumbrance approved by City
pursuant to the DDA and this Lease, shall be deemed to be "Permitted Encumbrances."
Notwithstanding anything in this Section 15 to the contrary, Lessee shall not, without the prior
written consent of City, which may be given or withheld in City's sole discretion, obtain any Project
t0858 t 6.5 M99-003 15
Loan or other conveyance for financing secured by the Housing Development or this Lease, the term
of which Capital Project Loan or other conveyance for financing purposes extends beyond the Term.
16. INDEMNITY.
Lessee shall defend, indemnify, assume all responsibility for, and hold City and its officers,
employees, agents, and representatives harmless from, all claims, demands, damages, defense costs
or liability of any kind or nature (including reasonable attorneys' fees and costs) and for any
damages to property or injuries to persons, including accidental death, which may be caused by or
arise out of (a) the Lessee's performance or failure to perform its obligations pursuant to this Lease,
whether such activities or performance thereof be by the Lessee or by anyone employed or
contracted with by the Lessee and whether such damage shall accrue or be discovered before or after
termination of this Lease, or (b) from any defect in the Site or the Housing Development, or for any
defects in the Development Plans approved by City pursuant to the DDA, or for any structural or
other defects in any work done according to the approved Development Plans, or for any delays
reasonably caused by the City's review and approval of the Development Plans, or (c) from any
displacement of residents or liability for relocation assistance pursuant to Government Code Section
7260, et seq., due to the acts of Lessee hereunder, or (d) Lessee's performance or nonperformance of
its obligations under the DDA, Lessee's ownership or operation of the Housing Development, or (e)
challenges to the approval, validity, applicability, interpretation or implementation of the DDA or
the California Environmental Quality Act approvals made in connection therewith, or (f) the
noncompliance by Lessee of any applicable local, state and/or federal law, including, without
limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable,
the requirement to pay state prevailing wages); (g) the implementation of Section 1781 of the Labor
Code, as the same may be amended from time to time, or any other similar law; or (h) failure by
Lessee to provide any required disclosure or identification as required by Labor Code Section 1781,
as the same may be amended from time to time, or any other similar law. Lessee shall not be liable
for property damage or bodily injury occasioned by the negligence of, willful misconduct of, or
breach of this Lease by City or its agents or employees.
17. INSURANCE.
17.1 Insurance to be Provided by Lessee. During the Term, Lessee, at its sole cost and
expense, shall itself take out and maintain, or cause to be taken out and maintained, the following
insurance coverage, in addition to any insurance which may be required pursuant to the DDA:
(a) Maintain a policy or policies of all-risk property insurance. Such insurance
policy shall be maintained in an amount not less than one hundred percent (100%) of the "Full
Insurable Value" of the Housing Development, as defined herein in this Section 17.
(b) Maintain, in an amount not less than One Million Dollars ($1,000,000) per
occurrence with a Three Million Dollars ($3,000,000) aggregate, commercial general liability policy
including contractual liability. The required amount of insurance shall be subject to increases as
City may reasonably require from time to time, but not more frequently than every twenty-four (24)
months. In no event shall such increase or increases exceed the increase during such period in the
CPl.
1085816.5 12098-003 16
(e) Maintain a comprehensive automobile liability policy in not less than the
amount of One Million Dollars ($1,000,000) combined single limit. The required amount of
insurance shall be subject to increases as City may reasonably require from time to time, but not
more frequently than every twenty-four (24) months. In no event shall such increase or increases
exceed the increase during such period in the CPI.
(d) Maintain worker's compensation insurance issued by a responsible carrier
authorized under the laws of the State of California to insure employers against liability for
compensation under the workers' compensation laws now in force in California, or any laws
hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers'
compensation insurance shall cover all persons employed by Lessee and/or Property Manager in
connection with the Site and the Housing Development and shall cover full liability for
compensation under any such act aforesaid, based upon death or bodily injury claims made by, for
on behalf of any person incurring or suffering injury or death in connection with the Site or the
Housing Development or the operation thereof by Lessee or Property Manager.
(e) Maintain until the completion of construction of the Housing Development a
builder's risk policy covering damage or loss up to the value of labor and materials.
(f) Maintain or caused to be maintained use and occupancy or business
interruption or rental income insurance against the perils of fire, lightning, vandalism, malicious
mischief, riot and civil commotion, and such other perils ordinarily included in extended coverage
fire insurance policies, in the amount that is reasonably acceptable to the Lessee and City.
17.2 Definition of "Full Insurable Value." The term "Full Insurable Value" as used in
this Section 17 shall mean the actual replacement cost of the Housing Development, including the
cost of construction of the Housing Development, architectural and engineering fees, applicable
governmental fees, and inspection and supervision. Lessee shall maintain the insurance policy
required by Section 17.1(a) hereof at the current Full Insurable Value of the Housing Development.
17.3 General Insurance Provisions. All policies of insurance provided for in this Section
17, except for the workers' compensation insurance, shall name Lessee and any subtenant as the
insured and City and its officers, employees, agents, and representatives, as additional insureds, as
their respective interests may appear. Lessee agrees to timely pay or cause to be timely paid all
premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with
all insurance requirements necessary for the maintenance of such insurance. Lessee agrees to submit
policies of all insurance required by this Section 17 of this Lease, or certificates evidencing the
existence thereof, to City on or before the effective date of this Lease, indicating full coverage of the
contractual liability imposed by this Lease. At least thirty (30) days prior to expiration of any such
policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be submitted
to City. All policies shall be written by good and solvent insurers qualified to do business in
California and reasonably acceptable to the City Director or designee. All policies or certificates of
insurance shall also: (i) provide that such policies shall not be cancelled or limited in any manner
without at least thirty (30) days prior written notice to City; and (ii) provide that such coverage is
primary and not contributing with any insurance as may be obtained by City and shall contain a
waiver of subrogation for the benefit of the City. Lessee agrees that provisions of this Section as to
1085816.5 12098-003 17
maintenance of insurance shall not be construed as limiting in any way the extent to which Lessee
may be held responsible for the payment of damages to persons or property resulting from Lessee's
activities, activities of its sublessees or the activities of any other person or persons for which Lessee
is otherwise responsible
17.4 Failure to Maintain Insurance. If Lessee fails or refuses to procure or maintain
insurance as required by this Lease, City shall have the right, at City's election, and upon ten (10)
days prior notice to Lessee, to procure and maintain such insurance. The premiums paid by City
shall be treated as added Rent due from Lessee, to be paid on the first day of the month following the
date on which the premiums were paid. City shall give prompt notice of the payment of such
premiums, stating the amounts paid and the name of the insured(s).
17.5 Insurance Proceeds Resulting from Loss or Damage to Housing Development.
All proceeds of insurance with respect to loss or damage to the Housing Development during the
term of this Lease shall be payable, under the provisions of the policy of insurance and subject to the
provisions of all Mortgages, to Lessee, and said proceeds shall constitute a trust fund to be used for
the restoration, repair and rebuilding of the Housing Development in accordance with plans and
specifications approved in writing by City. To the extent that such proceeds exceed the cost of such
restoration, repair or rebuilding, then such proceeds shall be used to repay any outstanding loans
secured by encumbrances upon the Site, and any remaining proceeds shall be apportioned between
Lessee and City as their interests may appear. Notwithstanding the foregoing, within the period
during which a Permitted Encumbrance is in effect, such proceeds shall be payable in accordance
with the Permitted Encumbrance documents.
In the event this Lease is terminated by mutual agreement of City and Lessee, as approved by
all Mortgagees, and the Housing Development is not restored, repaired or rebuilt, then, subject to the
consent of the Mortgagees, the insurance proceeds shall be jointly retained by City and Lessee and
shall be applied first to any payments due under this Lease from Lessee to City, second to restore the
Site and Housing Development to their original condition and to a neat and clean condition (if
permitted by the Mortgagees), third to repay any outstanding loans secured by encumbrances upon
the Site, and finally any excess shall be apportioned between Lessee and City as their interests may
appear, and Lessee shall have no further obligation hereunder to restore, repair or rebuild the
Housing Development. The value of each interest for the purpose of apportioning excess proceeds
under this Section 17.5 shall be the fair market value of such interests immediately prior to the
occurrence of the damage or destruction.
18. EMINENT DOMAIN.
In the event that the Bite and/or the Housing Development or any part thereof shall be taken
for public purposes by condemnation as a result of any action or proceeding in eminent domain,
then, as between City and Lessee, but subject to the provisions of all Mortgages, the interests of City
and Lessee in the award and the effect of the taking upon this Lease shall be as follows:
(a) In the event of such taking of only a part of the Site, leaving the remainder of
the Site in such location and in such form, shape and size as to be used effectively and practicably
for the conduct thereon of the uses permitted hereunder, this Lease shall terminate and end as to the
1085816.5 120%-003 18
portion of the Site so taken as of the date title to such portion vests in the condemning authority, but
shall continue in full force and effect as to the portion of the Site not so taken and from and after
such date the rental. required by this Lease to be paid by Lessee to City shall be reduced in the
proportion which the number of square feet so taken bears to the total number of square feet in the
Site.
(b) In the event of taking of only a part of the Site, leaving the remainder of the
Site in such location, or in such form, shape or reduced size as to render the same not effectively and
practicably usable and economically feasible for the conduct thereon of the uses permitted
hereunder, as reasonably determined by the Lessee, this Lease and all right, title and interest
thereunder shall cease on the date title to the Site or the portion thereof so taken vests in the
condemning authority.
(e) In the event the entire Site is taken, this Lease and all of the right, title and
interest thereunder, shall cease on the date title to the Site so taken vests in the condemning
authority.
(d) In the event of taking of only Lessee's leasehold interest in the Site, subject to
the approval of all Mortgagees, this Lease shall terminate.
(e) Promptly after a partial taking, at Lessee's expense and in the manner
specified in provisions of this Lease related to maintenance, repairs, alterations, Lessee shall restore
the Housing Development, to the extent possible and as permitted by law, and to the extent of
condemnation proceeds received by Lessee, so as to place them in a condition suitable for the uses
and purposes for which the Site was leased.
(f) In the event of any taking under subparagraphs (a), (b), (e) or (d) hereinabove,
that portion of any award of compensation attributable to the fair market value of the Site or portion
thereof taken, valued as subject to this Lease, shall belong to City. That portion of any award
attributable to the fair market value of Lessee's leasehold interest in the Site and Improvements
pursuant to this Lease, and any separate award made to Lessee for loss of business or for the taking
of Lessee's fixtures and improvements, shall belong to Lessee, subject to the provisions of the
Mortgages. This Section 18 shall be Lessee's sole and exclusive remedy in the event of any taking.
Lessee hereby waives the benefits of California Code of Civil Procedure § 1265.130.
(g) In the event of a partial taking, where the Lease remains in effect and Lessee
is obligated to restore or repair the Housing Development, then Lessee shall be entitled to any
portion ofthe award attributable to severance damages to Lessee's interest in the remaining Housing
Development, and any remaining severance damages shall be payable to City. Lessee's award shall
be used for the restoration, repair or rebuilding of the Housing Development in accordance with
plans and specifications approved in writing by City to the extent necessary to restore or repair the
Housing Development, subject to the provisions of the Mortgages. The value of each interest for the
purpose of apportionment under this Section shall be the fair market value of such interests at the
time of the taking.
(h) Notwithstanding the foregoing provisions of this Section, City may, in its
1085916.5 12M-003 19
discretion and without affecting the validity and existence of this Lease, transfer City's interests in
the Site in lieu of condemnation to any authority entitled to exercise the power of eminent domain.
In the event of such transfer by City, Lessee (or mortgagee if a mortgage is then in effect) and City
shall retain whatever rights they may have to recover from said authority the fair market value of
their respective interests in the Housing Development taken by the authority.
(i) All valuations to be made pursuant to this Section 18 shall be made by mutual
agreement of City and Lessee.
19. OBLIGATION TO REFRAIN FROM DISCRIMINATION.
Lessee covenants by and for itself and any successors in interest 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, transfer, use,
occupancy, tenure or enjoyment of the Site, nor shall Lessee 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 residents, lessees, or vendees of the
Site or any portion thereof. The foregoing covenants shall run with the land.
20. NONDISCRIMINATION IN EMPLOYMENT.
Lessee, for itself and its successors and assigns, agrees that during the operation of the
Housing Development provided for in this Lease, and during any work of repair or replacement,
Lessee shall not discriminate against any employee or applicant for employment because of race,
color, creed, religion, sex, marital status, physical or mental disability, sexual orientation, ancestry or
national origin, or on the basis of any other category or status not permitted by law.
21. COMPLIANCE WITH LAW.
Lessee agrees, at its sole cost and expense, to itself comply, and to use its best commercially
reasonable efforts to secure compliance by all contractors and subtenants of the Site and Housing
Development, with all the requirements now in force, or which may hereafter be in force, of all
municipal, county, state and federal authorities, pertaining to the Site and the Housing Development,
as well as operations conducted thereon, and to faithfully observe and secure compliance by all
contractors and subtenants of the Site and Housing Development with, in the use of the Site and the
Housing Development all applicable county and municipal ordinances and state and federal statutes
now in force or which may hereafter be in force, and to pay before delinquency all taxes,
assessments, and fees, if any, assessor levied upon Lessee or the Site or the Housing Development,
including the land and any buildings, structures, machines, appliances or other improvements of any
nature whatsoever, erected, installed or maintained by Lessee or by reason of the business or other
activities of Lessee upon or in connection with the Site and the Housing Development. Lessee shall
use good faith efforts to prevent residential tenants from maintaining any nuisance or other unlawful
conduct on or about the Property, and shall take such actions as are reasonably required to abate any
such violations by residential tenants of the Site and Housing Development. The judgment of any
court of competent jurisdiction, or the admission of Lessee or any residential tenant or permittee in
any action or proceeding against them, or any of them, whether City be a party thereto or not, that
1.095816.5 12M-003 20
Lessee, residential tenant or permittee has violated any such ordinance or statute in the use of the
Site or the Housing Development shall be conclusive of that fact as between City and Lessee, or
such residential tenant or permittee.
22. ENTRY AND INSPECTION.
City reserves and shall have the right during reasonable business hours (except in cases of
emergency), upon forty-eight (48) hours prior written notice (except in cases of emergency) to
Lessee by the City Administrator or designee, to enter the Site and the Housing Development for the
purpose of viewing and ascertaining the condition of the same, or to protect its interests in the Site
and the Housing Development or to inspect the operations conducted thereon, subject to the City's
indemnification obligations as set forth in Section 16 hereof.
23. RIGHT TO MAINTAIN.
In the event that the entry or inspection by City pursuant to Section 22 hereof discloses that
the Site or the Housing Development are not in a decent, safe, and sanitary condition, City shall have
the right, after thirty (30) days written notice to Lessee (except in case of emergency, in which event
no notice shall be necessary), to have any necessary maintenance work done for and at the expense
of Lessee and Lessee hereby agrees to pay promptly any and all costs incurred by City in having
such necessary maintenance work done in order to keep the Site and the Housing Development in a
decent, safe and sanitary condition, provided that the City delivers such notice which is required
hereunder. The rights reserved in this Section shall not create any obligations on City or increase
obligations elsewhere in this Lease imposed on City.
24. EVENTS OF DEFAULT AND REMEDIES.
24.1 Events of Default by Lessee. Subject to the force majeure provisions of Section
25.22 hereof, the occurrence of any one or more of the following shall constitute an event of default
hereunder:
(a) Lessee shall fail to construct the Housing Development in accordance with the
DDA and within the times set forth in the DDA, subject to force majeure delays as set forth in
Section 702 of the DDA, within thirty (30) days of notice from the City that such construction has
not been completed within the required time; or
(b) Lessee shall abandon or surrender the Site or the Housing Development; or
(e) Lessee shall fail or refuse to pay, within thirty (30) days of notice from City
that the same is due, any installment of Rent or any other sum required by this Lease to be paid by
Lessee; or
(d) Lessee shall fail to materially perform any covenant or condition of this Lease,
other than as set forth in subparagraphs (a) or (b) above, and any such failure is not cured within
thirty (30) days following the service on Lessee of a written notice from City specifying the failure
complained of, or if it is not reasonably practicable to cure or remedy such failure within such
thirty (30) day period, then Lessee shall not be deemed to be in default if Lessee shall commence
1085816 5 12098-W3 21
such cure within such thirty (30) day period and thereafter diligently prosecute such cure to
completion; or
(e) Subject to any restrictions or limitations placed on City by applicable laws
governing bankruptcy, Lessee's (i) application for, consent to or suffering of the appointment of a
receiver, trustee or liquidator for all or for a substantial portion of its assets; (ii) making a general
assignment for the benefit of creditors; (iii) admitting in writing its inability to pay its debts or its
willingness to be adjudged a bankrupt; (iv) becoming unable to or failing to pay its debts as they
mature; (v) being adjudged a bankrupt; (vi) filing a voluntary petition or suffering an involuntary
petition under any bankruptcy, arrangement, reorganization or insolvency law (unless in the case of
an involuntary petition, the same is dismissed within ninety (90) days of such filing); (vii) convening
a meeting of its creditors or any class thereof for purposes of effecting a moratorium, extension or
composition of its debts; or (viii) suffering or permitting to continue unstayed and in effect for ninety
(90) consecutive days any attachment, levy, execution or seizure of all or a portion of Lessee's assets
or of Lessee's interest in this Lease.
Notwithstanding anything to the contrary contained in this Lease, prior to declaring any
default or taking any remedy permitted under this Lease or applicable law based upon an alleged
default, Lessee's limited partner (as set forth on Exhibit E, the "Tax Credit Partner") shall have a
period of not less than sixty (60) days to cure such alleged default; provided, however, if in order to
cure such default Tax Credit Partner reasonably believes that it must remove a general partner of
Lessee, or all of them, pursuant to that certain Lessee's limited partnership agreement, Tax Credit
Partner shall so notify City and so long as Tax Credit Partner is reasonably and diligently attempting
to remove the general partner or general partners, Tax Credit Partner shall have until the date sixty
(60) days after the effective date of the removal of the general partner or general partners to cure
such default but in no event more than one (1) year.
24.2 Remedies of City.
In the event of any such default as described in Section 24.1, City may, at its option:
(a) Correct or cause to be corrected said default and charge the costs thereof
(including costs incurred by City in enforcing this provision) to the account of Lessee, which charge
shall be due and payable within thirty (30) days after presentation by City of a statement of all or
part of said costs;
(b) Correct or cause to be corrected said default and pay the costs thereof
(including costs incurred by City in enforcing this provision) from the proceeds of any insurance;
(c) Exercise its right to maintain any and all actions at law or suits in equity to
compel Lessee to correct or cause to be corrected said default;
(d) Have a receiver appointed to take possession of Lessee's interest in the Site
and the Housing Development, with power in said receiver to administer Lessee's interest in the Site
and the Housing Development, to collect all funds available to Lessee in connection with its
operation and maintenance of the Site and the Housing Development; and to perform all other
consistent with Lessee's obligation under this Lease as the court deems proper; and
1095816.5 120%-003 22
In the event that Lessee's default has not been cured within one hundred twenty (120)
days from the date of City,s notice pursuant to Section 24.1, in addition to the foregoing remedies
City shall also be entitled to terminate this Lease and immediately regain possession of the Site.
Notwithstanding anything to the contrary in this Lease, in no event shall City have the right to
terminate this Lease as a result of the occurrence and continuance of an Event of Default or
otherwise until the expiration of the fifteen (15) year tax credit compliance period as described in
Section 42(iXI) of the Internal Revenue Code of 1986, as amended, except with the consent of the
Tax Credit Partner.
24.3 Damages. Damages which City recovers in the event of default under this Lease
shall be those which are then available under applicable California case and statutory law to lessors
for leases in the State of California including, but not limited to, any accrued but unpaid rent and the
worth at the time of award of the amount by which the unpaid rent for the balance of the term of this
Lease after the date of award exceeds the amount of such rental loss for the same period that Lessee
proves could be reasonably avoided.
24.4 Rights and Remedies are Cumulative. The remedies provided by this Section 24
are not exclusive and shall be cumulative to all other rights and remedies possessed by City. The
exercise by City of one or more such rights or remedies shall not preclude the exercise by it, at the
same or different times, of any other rights or remedies for the same default or any other default by
Lessee.
24.5 Rights of Lenders.
(a) General Provisions. At all times during the Term, Lessee shall have the right
to mortgage, pledge, deed intrust, assign rents, issues and profits and/or collaterally (or absolutely
for purposes of security if required by any lender) assign its interest in this Lease, or otherwise
encumber this Lease, and/or the interest of Lessee hereunder, in whole or in part, and any interests or
rights appurtenant to this Lease, and to assign or pledge the same as security for any debt (the holder
of any such mortgage, pledge or other encumbrance, and the beneficiary of any such deed of trust
being hereafter referred to as "Mortgagee" and the mortgage, pledge, deed of trust or other
instrument hereafter referred to as "Mortgage'), upon and subject to each and all of the following
terms and conditions:
i. Any Mortgage is subject to the requirements of Section 15 hereof.
ii. Except as otherwise set forth herein to the contrary, all rights acquired
by said Mortgagee shall be subject to each and all of the covenants, conditions and restrictions set
forth in this Lease, and to all rights of City thereunder, none of which covenants, conditions and
restrictions is or shall be waived by City by reason of the giving of such Mortgage. If Lessee
encumbers its leasehold estate by way of a Mortgage as permitted herein, and if City is advised in
writing of the name and address of the Mortgagee, then this Lease shall not be terminated or
canceled on account of any Event of Default by Lessee in the performance of the terms, covenants or
conditions hereof until City shall have complied with the provisions of this Lease as to the
Mortgagee's rights to cure and to obtain a new lease.
1085816.5 1209"3 23
(b) Consent of Mortgagee Required. No cancellation, surrender, termination, or
modification of this Lease shall be effective without the prior written consent of the holder of any
Mortgage.
(c) Notice of Defaults. If Lessee or Lessee's successors or assigns shall
mortgage the leasehold interest herein demised, then, as long as any such Mortgage shall remain
unsatisfied of record, City agrees to give Mortgagee immediate notice of all defaults by Lessee under
the Lease, and to simultaneously give to Mortgagee a written copy of all notices and demands that
City gives to Lessee. No notice or demand under the Lease shall be effective until after notice is
received by Mortgagee. Any notices of default given by City under the Lease shall describe the
default(s) with reasonable detail. Mortgagee shall have the right to cure any breach or default within
the time periods given below.
(d) Mortgagee's Cure Rights.
I. Notice and Cure. After receipt by Lessee and Mortgagee of a notice
of default under the Lease and the subsequent expiration of any applicable period of cure given to
Lessee under the Lease, City shall deliver an additional notice ("Mortgagee's Notice') to Mortgagee
again specifying the default and stating that Lessee's period of cure has expired. Mortgagee shall
thereupon have the additional periods of time to cure any uncured default, as set forth below, without
payment of default charges, fees, late charges or interest that might otherwise be payable by Lessee.
City shall not terminate the Lease or exercise its other remedies under the Lease if:
A. Within sixty (60) days after Mortgagee's receipt of the
Mortgagee's Notice, Mortgagee (i) cures the default, or (ii) if the default reasonably requires more
than sixty (60) days to cure, commences to cure said default and diligently prosecutes the same to
completion; or
B. Where the default cannot be cured by payment or expenditure
of money or without possession of the Property or otherwise, Mortgagee initiates foreclosure or
other appropriate proceedings within sixty (60) days after receipt of the Mortgagee's Notice, cures
all other defaults reasonably capable of cure, complies with all other covenants and conditions ofthe
Lease reasonably capable of compliance, and causes the continued payment of all rents, real property
taxes and assessments, and insurance premiums to be paid by Lessee under the Lease.
ii. City agrees to accept performance by Mortgagee of all cures,
conditions and covenants as though performed by Lessee, and agrees to permit Mortgagee access to
the Property to take all such actions as may be necessary or useful to perform any condition or
covenants of the Lease or to cure any default of Lessee. Mortgagee shall not be required to perform
any act which is not susceptible to performance by Mortgagee.
iii. If Mortgagee elects any of the above -mentioned options, then if
Mortgagee or its designee, or the successful bidder at the foreclosure sale, acquires the Lease by
foreclosure, whether by power of sale or otherwise or by deed or assignment in lieu of foreclosure,
or if a receiver be appointed, the Lease shall continue in full force and effect, provided that
Mortgagee or such other party shall cure all prior defaults of Lessee under the Lease that are
I OM816-5 12098-003 24
reasonably capable of being cured by Mortgagee or such other party within the time set forth in said
Section, and City shall treat Mortgagee or such other party as Lessee under the Lease. If Mortgagee
commences an action as set forth above, and thereafter Lessee cures such defaults (which cure City
shall be obligated to accept) and Mortgagee then terminates all proceedings under the option in said
Section, then the Lease shall remain in full force and effect between City and Lessee.
(e) New Lease. In the event the Lease is terminated for any reason prior to the
end of the Lease Term, City shall enter into a new lease ("New Lease") with Mortgagee or
Mortgagee's nominee covering the Property, provided that Mortgagee (a) requests such New Lease
by written notice to City within thirty (30) days after written notice by City to Mortgagee of
termination of the Lease, and (b) cures all prior defaults of Lessee that are reasonably capable of
being cured by Mortgagee. Mortgagee shall then have sixty (60) days following the later to occur of
(i) the date of execution and delivery of a new lease of the Property (a "New Lease"), or (ii) the date
on which Mortgagee or its nominee is able to occupy the Property following eviction of or vacating
by Lessee under the Lease, to cure such default; provided, however, that if any such default, by its
nature, is such that it cannot practicably be cured within sixty (60) days, then Mortgagee shall have
such time as shall be reasonably necessary to cure the default provided that Mortgagee commences
such cure within such sixty (60) day period and thereafter diligently prosecutes the cure to
completion. The New Lease shall be for the remainder of the Lease Term, effective at the date of
such termination, and shall only include all the rents and all the covenants, agreements, conditions,
provisions, restrictions and limitations contained in the Lease, except as otherwise provided in the
Lease. In connection with a New Lease, City shall assign to Mortgagee or its nominee all of City's
interest in all existing subleases of all or any part of the Property and all attornment given by the
sublessees. City shall not terminate or agree to terminate any sublease or enter into any new lease or
sublease for all or any portion of the Property without Mortgagee's prior written consent, unless
Mortgagee fails to deliver its request for a New Lease under this Section. In connection with any
such New Lease, City shall, by grant deed, convey to Mortgagee or its nominee title to the
Improvements, if any, which become vested in City as a result of termination of the Lease. City
shall allow to the Lessee under the New Lease a credit equal to the net income derived by City from
the Property during the period from the date of termination of the Lease until the date of execution of
the New Lease under this Section, against rent due during such period. Anything herein contained to
the contrary notwithstanding, the provisions of this Section shall inure only to the benefit of the
holders of Mortgages. If the holders of more than one such Mortgage shall make written requests
upon City in accordance with this Lease, the new lease (as provided for above) shall be entered into
pursuant to the request of the holder whose Mortgage shall be prior in lien thereto and thereupon the
written requests for a new lease of each holder of a Mortgage junior in lien shall be and be deemed
to be void and of no force or effect.
(f) Security Deposits. Mortgagee or any other purchaser at a foreclosure sale of
the Mortgage (or Mortgagee or its nominee if one of them enters into a New Lease with City) shall
succeed to all the interest of Lessee in any security or other deposits or other impound payments paid
by Lessee to City.
(g) Permitted Delays. So long as Mortgagee is prevented by any process or
injunction issued by any court or by any statutory stay, or by reason of any action by any court
having jurisdiction of any bankruptcy or insolvency proceeding involving Lessee, from commencing
1085816.5 12098-003 25
or prosecuting foreclosure or other appropriate proceedings in the nature thereof, Mortgagee shall
not be deemed for that reason to have failed to commence such proceedings or to have failed to
diligently prosecute such proceedings, provided that Mortgagee uses reasonable efforts to contest
and appeal the issuance or continuance of any such process, stay or injunction.
(h) Defaults Deemed Cured. On transfer of the Lease at any foreclosure sale
under the Mortgage or by deed or assignment in lieu of foreclosure, or upon creation of a New
Lease, any or all of the following defaults relating to the prior owner of the Lease shall be deemed
cured:
i. Attachment, execution or other judicial levy upon this Lease or the
leasehold estate hereby created;
I Assignment of this Lease or the leasehold estate hereby created for the
direct or indirect benefit of creditors of any prior Lessee;
iiL Judicial appointment of a receiver or similar officer to take possession
of the Premises, this Lease or any property of any prior Lessee not located on the Premises;
iv. Filing any petition by, for or against any prior Lessee (or any affiliate)
under any chapter of the federal Bankruptcy Act or any federal or state debtor relief statute, as
amended;
V. Any failure by any prior Lessee to make a disclosure of a hazardous
substance release as required by the California Health and Safety Code, this Lease or otherwise;
vi.
interest in this Lease;
Lessee;
viii.
curable by each Mortgagee.
Any default under any provision restricting transfers of Lessee's
Any breach of any representation or warranty given by any prior
Any other defaults personal to Lessee and/or not otherwise reasonably
(i) City's Forbearance and Right to Cure Defaults on Leasehold Mortgages.
L Notice. City will give to Mortgagee a copy of each notice or other
communication with respect to any claim that a default exists or is about to exist from City to Lessee
hereunder at the time of giving such notice or communication to Lessee, and City will give to
Mortgagee a copy of each notice of any rejection of this Lease by any trustee in bankruptcy of
Lessee. City will not exercise any right, power or remedy with respect to any Event of Default
hereunder, and no notice to Lessee of any such Event of Default and no termination of this Lease in
connection therewith shall be effective, unless City has given to Mortgagee written notice or a copy
of its notice to Lessee of such Event of Default or any such termination, as the case may be, and an
opportunity to cure or enter into a New Lease, as provided above.Mortgagee's Transferees, Etc. In
the event the leasehold estate hereunder shall be acquired by foreclosure, trustee's sale or deed or
1085816.5 12W8-003 26
assignment in lieu of foreclosure of a Mortgage, the purchaser at such sale or the transferee by such
assignment and its successors as holders of the leasehold estate hereunder shall be permitted to make
a transfer to an unaffiliated third party without City's consent, and shall not be not be liable for any
rent, if any, including without limitation ay Additional Rent or other obligations accruing after its or
their subsequent sale or transfer of such leasehold estate and such purchaser or transferee and its
successors shall be entitled to transfer such estate or interest without consent or approval of City;
provided that, the purchaser or transferee or successor as holder of the leasehold estate hereunder
shall be liable for the payment of all rent, if any, becoming due with respect to the period during
which such purchaser, transferee or other successor is the holder of the leasehold estate hereunder.
This Section shall also apply to the rights of a Mortgagee in connection with the entry into a new
lease and to the appointment of a receiver on behalf of a Mortgagee.No Liability of Mortgagee for
Prior Indemnified Acts. A Mortgagee shall not be obligated to assume the liability of Lessee for
any indemnities or damages arising for a period prior to Mortgagee's acquiring the right to
possession of the Property under this Lease.
(k) City Cooperation. City covenants and agrees that it will act and fully
cooperate with Lessee in connection with Lessee's right to grant leasehold mortgages as hereinabove
provided. At the request of Lessee or any proposed or existing Mortgagee, City shall promptly
execute and deliver (i) any documents or instruments reasonably requested to evidence, acknowledge
and/or perfect the rights of Mortgagees as herein provided; and (ii) an estoppel certificate certifying
the status of this Lease and Lessee's interest herein and such matters as are reasonably requested by
Lessee or such Mortgagees. Such estoppel certificate shall include, but not be limited to,
certification by City that (a) this Lease is unmodified and in full force and effect (or, if modified,
state the nature of such modification and certify that this Lease, as so modified, is in full force and
effect), (b) all rents currently due under the Lease have been paid, (c) there are not, to City's
knowledge, any uncured Events of Default on the part of Lessee under the Lease or facts, acts or
omissions which with the giving of notice or passing of time, or both, would constitute an Event of
Default. Any such estoppel certificate may be conclusively relied upon by any proposed or existing
leasehold Mortgagee or assignee of Lessee's interest in this Lease.
(1) Claims. City and Lessee shall deliver to Mortgagee notice of any litigation or
arbitration proceedings between the parties or involving the Property or the Lease. Mortgagee shall
have the right, at its option, to intervene and become a party to any such proceedings. If Mortgagee
elects not to intervene or become a party, City shall deliver to Mortgagee prompt notice of and a
copy of any award, decision or settlement agreement made in connection with any such proceeding.
(m) Further Amendments. City and Lessee shall reasonably consider including
in the Lease by suitable amendment from time to time any provision which may be reasonably
requested by any proposed Mortgagee for the purpose of implementing the mortgagee protection
provisions contained in this Lease and allowing that Mortgagee reasonable means to protect or
preserve the lien of its Mortgage upon the occurrence of a default under the terms of the Lease. City
and Lessee each agree to execute and deliver (and to acknowledge for recording purposes, if
necessary) any agreement required to effect any such amendment which they have approved.
25. MISCELLANEOUS.
1085816.5 12098-003 27
25.1 Governing Law. The laws of the State of California shall govem the interpretation
and enforcement of this Lease.
25.2 Legal Actions. In addition to any other rights or remedies, either party may institute
legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain
any other remedy consistent with the purpose of this Lease. Such legal actions must be instituted in
the Superior Court of Los Angeles County, State of California.
25.3 Acceptance of Service of Process. In the event that any legal action is commenced
by Lessee against City, service of process on City shall be made by personal service upon the City
Clerk of City, or in such other manner as may be provided by law.
In the event that any legal action is commenced by City against Lessee, service of process on
Lessee shall be made by personal service upon Lessee or in such other manner as may be provided
by law, and shall be effective whether made within or without the State of California.
25.4 Attorneys' Fees and Court Costs. In the event that either City or Lessee shall bring
or commence an action to enforce the terms and conditions of this Lease or to obtain damages
against the other party arising from any default under or violation of this Lease, then the prevailing
party shall be entitled to and shall be paid reasonable attorneys' fees and court costs therefor in
addition to whatever other relief such prevailing party may be entitled.
25.5 Inspection of Books And Records. City shall have the right (at Lessee's office,
upon not less than forty-eight (48) hours' notice, and during normal business hours) to inspect and
make copies of the books and records of Lessee pertaining to the Site as pertinent to the purposes of
this Lease.
25.6 interest. Any amount due City that is not paid when due shall bear interest from the
date such amount becomes due until it is paid. Interest shall be at a rate equal to the lesser of (i) the
discount rate established by the San Francisco office of the Federal Reserve Bank, plus two percent
(20/6), on the first day of the month such amount becomes due, and (ii) the maximum rate permitted
by applicable law.
25.7 Notices. All notices, statements, demands, requests, consents, approvals,
authorizations, offers, agreements, appointments or designations hereunder by either party to the
other shall be in writing and shall be given either by (i) personal service, (ii) delivery by reputable
document delivery service such as Federal Express that provides a receipt showing date and time of
delivery, or (iii) mailing in the United States mail, certified or registered mail, return receipt
requested, postage prepaid, and addressed as follows:
To City: City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
Attention: City Administrator
Copy to: City Attorney
Copy to: City Director of Community Services and Water
1085816.5 12098-003 28
To Lessee: 52'd Drive Apartments, L.P.
c/o Meta Housing Corporation
1640 S. Sepulveda Blvd., Suite 425
Los Angeles, CA 90011
Attention: John Huskey
With copy to: Bocarsly, Emden, Cowan, Esmail & Arndt, LLP
633 West Fifth Street, 70t' Floor
Los Angeles, CA 90071
Attention: Nicole Deddens
With copy to: CHBA Affordable, III
151 Kalmus Drive, Suite J-5
Costa Mesa, California 92626
Attention: Graham Espley-Jones
To Construction Bank of America, N.A.
Lender: Loan Administration Department
Mail Code: #CAO-103-04-04
450 B Street, Suite 450
San Diego, California 92101
Attention: Loan Administration Manager
Loan Number: ( 1
To Permanent California Community Reinvestment Corporation
Lender: 255 West Broadway, Suite 120
Glendale, CA 91204
Attention: Mary Kaiser, President
To Investor LP: Bank of America, N.A.
MAl-225-02-02
225 Franklin Street
Boston, MA 02110
Attention: Asset Management
To Special LP: Special Limited Partner
Banc of America CDC Special Holding Company, Inc.
MAI-225-02-02
225 Franklin Street
Boston, MA 02110
Attention: Asset Management
or to such other address as either party shall later designate for such purposes by written notice to the
other party. City shall also give copies of such notices to any party in interest under a Permitted
Encumbrance which has requested such notice. Notices shall be deemed effective upon personal
1085816.5 12M-003 29
delivery or within three (3) days after mailing thereof as provided above; provided, however that
refusal to accept delivery after reasonable attempts thereto shall constitute receipt. Any notices
attempted to be delivered to an address from which the receiving party has moved without notice to
the delivering party shall be effective on the third day after the attempted delivery or deposit in the
United States mail.
25.8 Time is of the Essence. Time is of the essence in the performance of the terms and
conditions of this Lease.
25.9 Non -Merger of Fee and Leasehold Estates. If both City's and Lessee's estates in
the Site or the Housing Development or both become vested in the same owner, this Lease shall
nevertheless not be destroyed by application of the doctrine of merger except at the express election
of City and Lessee's Mortgagee. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, shall not work as a merger and shall, at the option of City, terminate all
or any existing tenant leases or subtenancies or may, at the option of City, operate as an assignment
to City of any or all such existing tenant leases or subtenancies.
25.10 Holding Over. The occupancy of the Site after the expiration of the Term of this
Lease shall be construed to be a tenancy from month to month, and all other terms and conditions of
this Lease shall continue in full force and effect.
25.11 Conflict of Interest. No member, official or employee of City shall have any
personal interest, direct or indirect, in this Lease nor shall any such member, official or employee
participate in any decision relaxing to the Lease which affects his personal interests or the interests of
any limited partnership, partnership or association in which he is directly or indirectly interested.
Lessee warrants that it has not paid or given, and will not pay or give, any third party any money or
other consideration for obtaining this Lease.
25.12 Non -Liability of City and City Officials and Employees. No member, official,
officer, employee, agent, or representative of City shall be personally liable to Lessee, or any
successor in interest, in the event of any default or breach by City or for any amount which may
become due to Lessee or successor or on any obligations under the terms of this Lease.
25.13 Relationship. The relationship between the parties hereto shall at all times be
deemed to be that of landlord and tenant. The parties do not intend nor shall this Lease be deemed to
create a partnership or joint venture. Lessee acknowledges and agrees that neither this Lease nor any
other agreement with City in its proprietary capacity as Lessee shall bind the City in its regulatory
capacity and that nothing contained herein is an agreement of the City as a governmental body
having regulatory jurisdiction of the Site to issue or grant to Lessee any permit, including building,
grading or other land use permits. Lessee shall be required to apply for and obtain all permits
including building, grading and other land use permits needed from the City in its governmental
regulatory capacity, and to comply with all laws, ordinances, rules and regulations of City governing
the construction, use and occupancy of the Housing Complex.
25.14 Waivers and Amendments. All waivers of the provisions of this Lease must be in
writing and signed by the appropriate authorities of City or Lessee. The waiver by City of any
1085816.5 12098-003 30
breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition, or any subsequent breach of the same or any other term, covenant
or condition herein contained. The subsequent acceptance of rent hereunder by City shall not be
deemed to be a waiver of any preceding breach of Lessee of any term, covenant or condition of this
Lease, regardless of City's knowledge of such preceding breach at the time of acceptance of such
rent. Failure on the part of City to require or exact full and complete compliance with any of the
covenants or conditions of this Lease shall not be construed as in any manner changing the terms
hereof and shall not prevent City from enforcing any provision hereof. All amendments hereto must
be in writing and signed by the appropriate authorities of City and Lessee. The Lessee's mortgagee
permitted by this Lease shall not be bound by any waiver or amendment to this Lease without
Lessee's mortgagee giving its prior written consent.
25.15 Relationship with DDA. None of the terms, covenants or conditions agreed upon in
writing in the DDA and other instruments between the parties to this Lease with respect to
obligations to be performed, kept or observed by Lessee or City in respect to the Site or any part
thereof, shall be deemed to be merged with this Lease. Upon the occurrence of each of the
following: (a) City's issuance of a Final Certificate of Occupancy for the Housing Development, and
(b) the City's determination that the construction of the Housing Development has been completed in
accordance with the requirements of the DDA, and (c) Lessee certifies to the City that it is in
compliance with the requirements of Section 310 of the DDA, then the DDA shall thereupon be
terminated and of no further force or effect. Upon the request of Lessee, City shall execute and
deliver to Lessee a termination agreement or a written certification that the DDA has been
terminated in accordance with the requirements of this section.
25.16 Entire Agreement; Duplicate Originals; Counterparts. This Lease sets forth the
entire understanding of the parties with respect to Lessee's ground lease of the Site. This Lease is
executed in three (3) duplicate originals and counterparts, each of which is deemed to be an original.
This Lease includes five exhibits, Exhibits A, B, C, D and E.
25.17 Severability. If any provision of this Lease or the application thereof to any person
or circumstances shall be invalid or unenforceable to any extent, the remainder of this Lease and the
application of such provisions to other persons or circumstances shall not be affected thereby and
shall be enforceable to the greatest extent permitted by law.
25.18 Terminology. All personal pronouns used in this Lease, whether used in the
masculine, feminine, or neuter gender, shall include all other genders; the singular shalt include the
plural, and vice versa. Titles of sections are for convenience only, and neither limit nor amplify the
provisions of the Lease itself. Except for terms expressly defined in this Lease, all terms shall have
the same meaning as set forth in the DDA.
25.19 Recordation. A short form memorandum of this Lease, in the form attached hereto
as Exhibit "C", shall be recorded at or within five (5) working days after the time the Lease is
executed.
2510 Binding Effect. This Lease, and the terms, provisions, promises, covenants and
conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their
1085816.5 12o98-003 31
respective heirs, legal representatives, successors and assigns.
25.21 Estoppel Certificate. Each of the parties shall at any time and from time to time
upon not less than twenty (20) days' prior notice by the other, execute, acknowledge and deliver to
such other party a statement in writing certifying that this Lease is unmodified and is in full force
and effect (or if there shall have been modifications that this Lease is in full force and effect as
modified and stating the modifications), and the dates to which the rent has been paid, and stating
whether or not to the best knowledge of the signer of such certificate such other party is in default in
performing or observing any provision of this Lease, and, if in default, specifying each such default
of which the signer may have knowledge, and such other matters as such other party may reasonably
request, it being intended that any such statement delivered by Lessee may be relied upon by City or
any successor in interest to City or any prospective mortgagee or encumbrancer thereof, and it being
further intended that any such statement delivered by City may be relied upon by any prospective
assignee of Lessee's interest in this Lease or any prospective mortgagee or encumbrancer thereof.
Reliance on any such certificate may not extend to any default as to which the signer of the
certificate shall have had no actual knowledge.
25.22 Force Majeure. In addition to specific provisions of this Lease, performance by
either party hereunder shall not be deemed to be in Default, and all performance and other dates
specified in this Lease shall be extended, where delays or Defaults are due to causes beyond the
control or without the fault of the party claiming an extension of time to perform, which may include
the following: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of
God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; governmental restrictions or priority; unusually severe weather; acts or omissions of
the other party; or acts or failures to act of the City or any other public or governmental agency or
entity (other than the acts or failures to act of City which shall not excuse performance by City).
Notwithstanding anything to the contrary in this Lease, an extension of time for any such cause shall
be for the period of the enforced delay and shall commence to run from the time of the
commencement of the cause, if notice by the party claiming such extension is sent to the other party
within thirty (30) days of the commencement of the cause. Times of performance under this Lease
may also be extended in writing by the mutual agreement of City and Lessee.
25.23 Quiet Enjoyment. City does hereby covenant, promise and agree to and with Lessee
that Lessee, for so long as Lessee is not in default hereof, shall and may at all times peaceably and
quietly have, hold, use, occupy and possess the Site throughout the Term.
25.24 City Approvals and Actions. whenever a reference is made herein to an action or
approval to be undertaken by City, the City Administrator or his or her designee is authorized to act
on behalf of City unless specifically provided otherwise or the law otherwise requires.
1085816.5 12M-003 32
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by their
lawfully authorized officers.
ATTEST:
City clek
APPROVED AS TO FORM:
�� vlxtu
CityAttorney, t) fovyii . SrQf-t Porter
& Girard,
Counsel to City
CITY:
CITY OF VERNON, a California charter city and
municipal corporation
1085816.5 120"3 33
LESSEE:
52ND DRIVE APAKFNIENTS, L.P.,
a California limited partnership
By: CHBA Affordable III, LLC,
a California limited liability company,
its Managing General Partner
By: Community Home Builders and
Associates, a California nonprofit
public benefit corporation, its sole
member and manager
By
Gr zam P. Esple one
President
By: 52nd Drive Apartments LLC,
a California limited liability company,
its Administrative General Partner
By:
Kasey Burke
Vice President
1095816.5 12098-003 34
EXHIBIT A
SITE MAP
[To be provided]
10858165 12098-003 A-1
EXH.IBTT B
SITE DESCRIPTION
That real property located in the City of Vernon, County of Los Angeles, State of California,
described as follows:
Lot Nos. 45 through 53 inclusive of Tract No. 7923, as per Map recorded in Book 113, Pages 80 to
83 inclusive of Maps, in the Office of the County Recorder of said County.
APN: 6314-002-900 (portion)
1085816.5 1209&W3 B-1
EXHIBIT C
MEMORANDUM OF LEASE
[To Be Attached]
1085816.5 12098-003 C" 1
EXHIBIT D
PROPERTY SITE MANAGEMENT PLAN
[To Be Inserted]
D-1
MANAGEMENT PLAN
5rd Ort" RIM
Vernon, C40omia
A. Role OW respentsibiltty Of the Owrar artdktr dsM09111lon of MOO ty to the egeMi
1. Scope o/ RmsponalbOlm The remora responsibtfties of 590 Drive Apetnmo ts, (the 'Owner]
acid Solari Enterprises, ft (to 'Agent) are described In #* Liartegamertt Agreernent. This
Fimsuper~ Plan sede a Me Agre?WO Is ement. The poralsid � �� � any Wm of Mis
Port if two are any c orftWorp "visions, white hte terns of dais Plan eupowmt Ute farms d the
Agreerrted If any peons In the Port are not kxiuded In the Agroaneh.
The Plan Is also a re*drement of the Disposition and Development AgreemeM Ground Lease and
Requislory Drive epmrIrTmft ars required to be dmartaged Vernon � wit this Pam. Owner UxW tinge• asreentents, Itte
The Agent wS need prior Wp wW from the Owner before W0 aeon as noted below
a) Letilrts of arty base contracts wadi as a derbr pakdh,s, ranodeling stm
b) Disbursements In etrcees of $3,OW for Wbor and or nwderials rsgtisd to rnetain fie development.
The Agent must mdw every effort to keep dhbursentatts wift nets guldelinees of hte projected
budget marts.
2. ChmW in No -9eenennt Agent. The Onnmsr mskftft a Ast of property menspeme t a genls who
have the stgterlertoe and capaaty to rrtat;taQe the she and who are expwIs Iced in pit supported
9fordablie Nming a
The Mannagernent Agrmnertt providse toed the Agreement may be Senninde0 by mutual consent of the
owner or the Agent wiht sixty (e0) days wrilien npdce.
Sao
The Oily is atlztted lo rewortabhr approve cdt Ves to the Agent.
5e Drive Apar wet - Management Plan Paps 1 Of 12
& PerWma l Pow► and S1)Mltng Arrnn9eanerW
ACM and ad of lea pwwiw* a* Wd d ban W*Org, id>tmvkV 0r rrtpdng to Mfewtce any
reWw is of the &0 Drhre AparbNO a, or any other registered voters or residents of the City, vrkh
respect to any matters which regcdre ttte approval of the CRY or the efeaiontte of the Clot.
2. W" taotlfey.
a) MWmum job queifications for each position are detailed in the job descrollors in
b) Ntterested appkaW may amttact the Mwmgenront AqWS dome Ottice to establish a tins to
come In and ccmpMM an application. An applicant wl1 be required to corrplete a w M n apron
and We a drug twL Skit and an ord Interview may also be reg *@& This Agent will
Won each appiisttt y lW wsm accepted or the rejected far an ampioynw t opporU*.
cj Applicantsare corridared for poskkm and employees am treated during their empf0y without
regard la race, edtnidly. rteltond orlQK religion. creed, sax. age, WAM or vaatraft statue, medical
c onAm or handicap. M h>ckt9 of personnel shd conimm to Equal Emplaymertt Oppo Uft
guidell1rims•
a is the intent of the Agent[ to comply with the laws and regUIS&M , concerning fair
empbyfnent and &Tmnadve action. The Agent wO work with Ow Omw to aratrrsttr recruit
rnt w* cerdideiss for ail jobs. Special affiorts wM be made to provide icdormaden ropo*V )ob
opsnin9e to mktarky candidates and =*actors through oukSadt to cotnrtw * or
bubtin boards, nowspapers. and other media. All hirtrg materials will kxkao Sud
ft Agent is an'Equal Oppomx* Employer'
sun ve reoelm cornpralmtelve tr**V by the Management. Ina OW% the Reel Mier will!
provide concw d kWnkV to personnel on a regular basis during the site vialts. TratNng of al
P Pguidelines and mwuK n wtt Policies w o be c ar;W on an ongoing
basis. in addition, the Agent will worm Its stall In writing d as changes in manage(m t polidee and
mqutrments fnw edlelisly after any such "Ves have been published. The project related personnel
would be $ant to relevant mw panwd workshops sponsored by vartovs property managerrrent
assodaticns eel agencies for the purpose of updating and renewing work -related skills.
5e Dare APB - MOMPMOt Pao Paps 2 of 12
4. EmploPrteat of Fbddeab
The may give priority d quVed residents of Sr Drive Aparkrtertb and then to members of the
local cmvm * In tgr" of project pwrsOrv* and wd make avalsbe, to the runts aB pertinent
irtfarmat ". such as qANlcmwa, remtrtermion, appl, ad n : per, W.
pepsrx" triton the employment PoeMW unit rent may be dfleded by empfoymartt. y rent is adjusted.
such adJuedment strati be included as pert of tie! err>pbyees cantQe WdW and OW be sabWed as
such In a ~ work agreemert between to Agent and the employee.
C. Plan for Mshttmhttng Adsgmb Accouaft Records and lIWWM NlICIPS11 Farms and Vauch a
1. tiro jnd A000uatl V BeNtt.
FktsvxW aocoupft reports, and records shaft bs in cordornance whit standard aocr ld basis
accow" proadtres. and shad be resporolvP to the quidelbsa provided by to reWOMY agencies
ownected vet the project.
The Agent affair mairttab d acooupktg records on a compuw system at ft cw*W attics location.
Aeoords d +rent cdWjon and an fktartdal trartssomns wm be trarismitied to the Home Oftiee and input
ktb on compubr system *we a genersi ledger. cash recstpb and disbursements records wM be
qr reggrY nportk docurteras wd be compeled in cor don wMr dts Owner and wS be based
upon due requtlrernertb of tM regu4alory spandes. At a mk+knum, the Owner shy receiveMonthlY
report concernkV the kkw*+p:
a► Cash status report n*jd ng cash receipft dsbW=MWllS and reoeh►abiw
bj list of account payable.
c} Comparisons Of actual versus budgeted opera" croon as well as corrWhImIll with ON operating
costs In die previous year.
d) Vacanq report.
L operathp Olsbtaeear1 1
kom the operatstg accotxtt shal be made as descslbed in Paragraph 13 of the
Martegerrtertt /lgreecttera. Bft wUl be paid and scowls wit be hmdsd pusuartt to the requirerrtenls of
VW projecCe Msrtagemud Agreement and loam Agra mertt. SpscAcW
a) A purchase order system vA be uWz9dl to *0"ut most Pul" OWS" with ft SMOP"On it ma andnd services provided on c owl rakM uW dM trash removal, service
tomcat is sic.).
bj Purchase order copies wE be matched 10 ktvoices and approved by the property manager prior to
payer Payrnents wM be processed serrti-rnorteitty.
c> The Agent and/or Owner shop maktta n the foNowktg separate accounts:
The Agent shah maintain an operadrp acowrtt for rand coleclon and
wrnertt of to projecxs operating experaes.
5e Drive ApeAaterns - titantaseMeru PW Page 3 of 12
The Agent shoe maintain ihs opwadnp reserve account. This acoourt
will be Malt► funded as required by ft» lenders and waslors to ft project In the amount
established in fire regurialwy apresrnerrts. Subsequent deposes to #ft ao=xtt will be made in
a nmM as specMfed in the arwidy appoved aperedrup Wcipets. Funds nnay be transferred from
fhio amount orriy to Darer actual operating exp mm in excess of the approved budget amount. or
to connpwrsale for vacancy and bad debt losses In tta approved budget amain. Prior approval
must be obtdned before wMhdraval of hinds.
This WO0unt wR be funded 1tlrouph regular catrbutions from to
Opwa*g accou nL The initial cor*butlon b finis amount w7 be delernnined by the tandem and
w+eutors to the projsd In amount es>abiished in the repla0y aptreements. The amount of hods
will be based (in anlicipaled capital b pravernwft p cod uWadnp. and replawwt hams OW
Ow projects physical nab will require. Prior approval must be obtained bsfote wMWmwd of
funds.
Securty Deposits. The Agent will m afnta n a Security Deposit Accourt. The accourd aha9 be
' operating scowt. (Ses Section 5 for additional ifonnnailon on the Security
Deposit Account.
3. Coat Control
Expenses In eeaxss of $3,OW require the Ownses specter approval, except for smagggwrcy repairs
wiwre the Agent wi commuxuicM wO the owns► as soon as possbls. Purdws, in exoess
d $2,000 must be put out for tyros bids.
All reporting and a000uxdrg mqukernents shall be Wwamed by ire Menagerne t Agreement.
4. Vacanoy and Rsat toes Records
As ouu%W In the 1Msnrgernsrrt Agreement, ftre Agent shall prepare. as part of fhs nxft ly reports to
tl» Owner, an on W xpet,rn st lemwand a rent rollsix wig scheduled and actuacl reels wM a ll t
d resident denrlgr,encwe. Dok quency reports shall kxft s whaber rein we 30. sir . or 90 deys
hind In twir rev t
s. S@Cu fty oapoeits
Security deposits will be collected in an amount equal to one (1) morWs, rent. The Agent shad establish
an intsrsst bearing &=our* for Security Deposits.
The amount of any deductions iron the secxNW deposit wilt be detwm%W by fb AgWs Property
Manager under guidellnee established by the Agent and approved by the owner. Security deposits may►
be used to pay for resident -caused darnapss. lost keys or garage door mmde carwoia, detlnqu cut rent.
Wire fees, legal fees and wry oilier resemble awense caused dtredfy as a result of a resident's
actions. N no dtargss are made apaing a residwft security deposit, a resident shell be entitled to a
refund of a security deposit. shall be xvk dad in such refund to ito eoderrt required so by any
appilc�fe lard. Security deposit mkxds will be mailed to a former resident wilft 21 days of departure.
Any accrued inloo on ssmM deposes tlral Is not required by law to be refunded will be made
available for operations and repaka related to to project.
Security deposes shill be maintained in a separate amour* from ito operatkg and reserve a000unts.
Seaxey deposits shah be shown as ilabWee on all project reports, and not lnckxW as wxx nee.
5e Orin+ Awtrnents - MWOp meet Pion Pape 4 of 12
Upon vacetln0 a unit, the Agent stall inspect to departing resicWs unit to determkw wwhedw the
resident household caused any demageawt& they oocupisd the unit. The inspection form prior to
move -in shd be used as Ow beets of connparison. In tin event that there are raeidert-caused
damages, the Agent shah prepare within 21 days d the vacate do* an wdmaw d the coat of repair"
the damages and provkle fhe eftft to the :olden!. Wttwin 21 days of deparU% ft Agent abed
make the necessary repairs and send the fomwr resident an temizad list of repair oosfs (I any), and
cued! fhs security deposit agwist the most of repaks. The former resident *0 be sent a check for the
balance of the seaxity deposit ff any. Should fie repair coot exceed brie amount of the security
deposit. and then the lormer reeldert will be sent an invoice for the a wenive cost of the repairs. Am
documentation abet be makntakad in the former reeldent'a Me.
D. M■rnagenuern 1 Platt Upddes
The Managemer>t Man shall be updated on the following oocasiorw.
a) Change or rnodilicationg of 52nd Drive Apo nwenb' management gukk6us, which will be reviewed
annually.
b) Alteration of 52nd Drive AparWwW staffing ON neceaakaies operating procedure revisions.
L Prop.ny and UnbOy tnawana
The Owner shall amwV* for fie Project to be naured agakat toss by firs and such other hazards,
casua%w tiab R&* and contingercles, and in such amount and far such pedods as required by the
regulatory ancaes.
L OCCUPANIM
A. Unk Breakdown
52nd Drive Apartment will have " reeldential units comprised of 1, 2 and 3 bedroom unit serving
households within 30% - 55% Area Median Gross hxa, Ur4WL Then wit also be 1 management urdt.
All applications received colt be reviewed for all program re0 emerhls and eigb illy , wh icib
9. Markedog Pisces and Awcedwee
1. AtflemaMM Plata and Prooeft
The Agent will be resporadbia for marks" and leasing the unit. The rer" office wiN be located on
as and the Owner wit supply all of olio necessary offlos fur kn (deck, fib cabkhet, chairs, etc.) and
squonont (tom. computer, Printer cakxllor ainc.).
Units shot be nrankeled in acoordenos with Affirnm ive Fair housing marketing guidelines. AN
advertising for 52nd Drive Aparbrwnas shah induce prominent use of Equal Housing Opportunity logos,
slogans and►or statements of kit t to affirmatively market the units.
Outreach to the community alit spwJlcaty be tt u* r>.wwspapsrs. local government agencies such as
the CRY of Vernon, HOUBing Authority of trio County of Un Mgebs, Community Organizations and
hternst listings. The outreach will be ctywide and reach a dtveree racial. @Vw* and economic m6c.
5Z'' DrWe Apanrnara - Management Plan Page 5 d 12
2. Resfderrt Sefecton
The it N rent -up shah be conducted by the AgWq personnel and Supervised by the agent. The Agent
shell utilize slat mernbers *d are well trained In eligibility requirements, fam1y composom criteria,
unit size selection processes, and Owtw-awoved selection crtterfa. The resident selection process
shall be knpienwftd in a marow which prevents favoritlem and outside mflumices of any kind in the
selection of rssk*& The following Is a summary of resident selection procedures, using a Wary
a) An "arft Net will be created at the time of 5V Drive Apanmerrt's groundbrsaKing.
b) Applicallons and an frrformation papa, regandkp the apartments and the location d the
lottery. will be nod to all hwsehoids on the it>Derest Not approximWey 160 days prior to ttw
CerlM cft of Occupancy date.
c) A deadline. arpproximatey 130 days prior the Certificate of Ooarpancy date, will be set for
cpnplal ed appicatiorrs to be submitted to Solui Enterprises, km In order to be krckded in the
lottery.
d) Oily one application per housctroid vA be snared Uft the lottery drswkq. late, k=mpWW
duplowe and rallgi,fs appftcaO" vA not be entered into the tottery drawir-p.
9) The kttery w7 be held, apprmxrnAsy 125 days prior to the Certificate of O=pwq dais at a
space In the City of Vernom's City fiat, aMowkq access to time interested in attendkp.
t) All awlicaffons will be placed kao IrOvidrral erwelopss. AN applications with a preference we be
placed No a oorm*w. mbed and pulled one of a time, to random order. After all of the
appicadons wMh a preference hags been drawn, all applicatioru without a preference will be placed
Into a container, in and pulled one at a time. in random order. (Applicants will not be pre-
screened prior to the laity process).
g) As each appikakn Is pWW.k will be morl od in numerical order, Irrdkatkg the lottery number.
h) A preference shall be provided Wall appkwft who are employed or residing in the City of Vernon
or within a 1 tide radus of tw developnw d site as rneaeu►ed from to center of the A&
I) AN uppMcara wf be maisd a fetter rwtlfykrg dram the lottery took place, inform tram of thek lottery
number and of their preferem. if applicable. The letter will also state that a lottery number does not
guarantee admission or dwW to fits conrmtx*y.
!) Appraximalely 120 days prim to the Certificele of Occupancy date initial interview letters will be sent
to appticana. Typkaft we process 3 — 5 applicant per unit (44 ur ffs will result In 132 to 220 letters
being mailed %4.
k) inktat interviews will be held at which time the applicants will begin the eligibility process, krctucing
auo* tring the We we of Wormdiom, via fhtrd-p W verfAcatbn Ionrs relied to fton e, assets,
student stalls and bacWaxrd chac k data.
9 Upon determirugon of *NOW. the appikant will be offered residercy, placed on the wOM list or
denied. The wd*V list wit be updoW on a regular basis (every sic months). Applicants on the
waling ►isd wit be required to cn tort Ow manager (in writing) at least every 6 months in order to
remain on tfw vnOW list.
5e Drive Apw m ms - Mwugemrerrt flan Pape 6 of 12
m) Any qualified applefa riot able b mow in will be placed on a wadng list and shall receive a leper
ihf m*V them of their state
n) in determir*q whotm to soled an applicant for occupancy, Agent shall apply the same reasonabb
and objedivo standards and afterfa that It apples In abnisr albadabie aportroont developments that
it nw pee, and the prevafirg sta nclords and a1le tat for the rhharhagernord of afbordable oparb wo
deveioptua ti In Los Angeles County. Residents shah not be selected or rejected based upon
outside bhpukes or favoridsm of any kind
o) Those appkwft not selecled for ooauponcy shall be provided with written won stag the
reasons for Imir WmWq tits. Such reasons might Include but are not ibnited to the fdb *V: over
Wwme, Insu ti lent h me (Inability to pay the rang, and bad credit history (delinquent or unable to
pay on acwtxft any judprhherft or We paymenhN although appicant is allowed b explain
reasons). Those applicants rejected for residency shall. be provided w4h an opporburlty to appeal.
The appeal ptooese shall allow for the applicant to provide supplertmentai ihtornhaflon b fhs
apply. oWm ihdudbg add fond turd party verification ardor loobnony.
p) The Agent shall attempt fo owded those hmmehoids flat have been on the waiting Get la the
long" period of time. If a household cannot be wed otter doasnented aftenhpts, fhe Agent
shall inierview the efiprble househokfa that responded to cmdads, with prafererics bdW gim to
two thoussfhotde that have been on die waiting Be tfhe largest. The Interview shell include not
" those items Gated on the Ulsrvlew Checklist, but shall mplaih managernent practices and
guidsines. Prospec ilve resldents wti be Warned VO contl %W income eigibNfty and annual
irAxm rek w lk d , wO be required as a oondtlon of omgmncy. Appicarhfs who are doomed
subble for occupancy shall have the opportunity to iisped the unlit to be rented, shah sign an
rnspedbn form and a rental agreement, and shall pay die seouity deposit.
q) Applicants will ttieri be screened in numeric order of fhe OlP ty list, subject to any preferences
herein staled, b ds wmkw 0 they oaahpiy with the aecretbn crtlsriat to law a unit. If they most the
saesnlrg and aefedbrh atleria they will be offered a unit.
Note - a W*y will be field each year, al p m6nstNy 30 days prior to tie onrOversary doh of IN dale
the csrtflcata d oavpancy is issued in simian manner as provided above, The eipbifity ftht In place at
Me tints a unit becomes vacant will be the Id that will be used b screen for an applicant to leafs the
vamt unit. Those applicants on the aurent sl$Wy No will be asked b resutirrlit an applicalion 80
days prior to the next btbry. Those appicantt and any new appi wit wtm have eubmrited
a Oomiora prior to the bleary date will be placed In ffhe bttery. The purpose d the annual btlerp Is b
provide an equal opportunity to a new appibarht to gain a unit in the buildig and b keep the interest Rd
current wM applicants interested in being a palmist resident of its buidbg.
3. The city of Vwnai
The lottery process and documentation will be made available to representa 9m d it» City of Vernon
for audit. The City of Vernon will ow tact Solari Enterprises, Inc. In writing to determine a mutually,
agreeable date and time for the City to review IN process.
4. AppoWS Prone"
Appkarht's OW do not meet fhe Resident Sobcft h Crkeria will receive a !.attar of ineigbbifty.
Applicants have the right to make a written request to Solari Enterprises, Inc. withirh 14 days of receipt
of the letter b request a nesting to dleans their Ineligibility stoic Sotarl Ent rpriees, inc. wM review,
fhe appeals information acid provide a written response witdn 5 days all the appeals ns o*%.
L Pre4aoupsnay Orbsribtion
52W Drive Apartnhents — Manapma t Plan Page 7 at 12
A pn.occp ,y orientation program will be provided for appkOft duke the interview process. if
Vpkarft are acepied. at the firms of the "Mullion of the lease and payrnent of security deposit. the
Owner and Agent ehafl reorient tine hwsdxkig on the project. The orientation strati incltrode a tub and
detailed wAsw of the project holua rules, and wi l also irckxle a question and answer period during
which to reeldents can become acquainted wen each other as wed ce the Owner and the Agent.
C. Procedures for Osetn,rin Resident O bft M+d tor CWWAV and Mu a dy RocwWybV
HOuesrold ino0ane and Me
I. hod Resident now"
Steps to de%m*w ma hoome eipbay are described in Section d above.
2. Annuli Aeeident RearfRicadOn
Each household will be IMormed &usurp Sire InIGNIew and orier"Non process of the mquirer"t to
have household knoome and oarcpoedfon re -certified annually.
Annual ~Arm with each household will be scheduled according to a recertdffcatiom Schedule
esbbWW by " Agwt Every cWWdW Year qVKy hosehold must be re- certified. The re -
on procedure will been 120 days prior to the required tine of comhpletion. The full re-
rerfYlcacion process wit be akrtoet idea" b the irhi0al certNksrllom required at move In tiros.
Housshoids deWmined to sareeed the &M at the tine d their mud recertification, vdl invoke
ftre Nerd Available third fie, as desigrnafad by Section 42 of the IRS Code.
3. fiastdo t OOMPOW SWWrds
a) Pets: No pets are allowed In 52nd Drive Apahments.
b) Permissible Absences: Resident hoMes are required to occupy 52nd Drive Aparlmemfs as their
icy pimed resirlo-c- Absences beyond 45 days wR be permbed for smwgw y purposes
oc* as tap as rsnW paynmft sure kept txxrent during th abasrres. Regcreste for absences must
be subm>iaed lO the Agent in wrilk *ring the reasons for the abeerncs. the dates of ft exPSCW
absence, and any other rnalyrfat circumstances ttsl mW t affect 90 Agwft dKIOM about the
appropriels 1 d the absence. The residMnt will be otilled in wridrp d the decision.
c) Aesident kwapwitr. in the sent 8nat a resident appears to be incapacitated so as to make self
can d1lic uk, the Agent will rrrrnedlat* MONCI, reiativae or will oonta d referral agerld" to assist
line re** K. In the event that fire resident becomes so Incapacitated as to be unable to cave for
16-neW parsed, fire County Guwftft Office may be coitacAed b delermins what facility the
resident should be transferred to.
d) Uve-kn AKerhdarntw Residentt vWb d*abiMtivs severs enough b requin Nn-M atWndar t shall be
required to present written cwdkadon from lhak physician that their disabilities require sve-M Genre.
In that event. to unit must be larpt enough to a000mmodse tine attendant according to pubihhed
occupervy standwd-
D. Rent C [k ctlon Policies and Procedures
Se Drlw ApergMft - ManapeMM Plan Page 8 of 12
1. Real Calculations and CoNectlors
The Owner shaft agree to the rent for each unit at to time of teass up in advance. The prospective
resident household end be Wormed of the rant prior to exeaiting a lease. Annual rent Increases. 9
any, dW be approved sut"dt to approval. Residentis shalt be Warned a1 any rent Increases at least
30 days prior to their imphma>tallor.
Rent ooiec don procedures an defined in Paragraph 8 of file Wlanspem.rn Agserne t. Typicak, reft
shah be delwred to the Property Manager. The Property gaper st>ap provide the reeidsrt vAl h a
receipt and enter the x= t paid into the mm" rent receipt Journal, Rents shal be collected by the
Agent and deposited kftftopera" .
AN revs stall be die on or before the tjrst wodfrg day of each montit. Rent is cwWdered dokxwt
on the second vmrMrg day of the rrKxd Rwhfs must be paid by cashiers chadc or money ceder. ' No
cash wS be accepted.
L Acdona for Lade Reeds
Residents who have not paid their rent by the second war" day of iM month wort be served a Notice
I* Pay Rent or auk
FaNcue lo pall rent wall reaW in evialon. The Agent may consult wilh the Owner prior to Initleft any
*0 won against arty reefderd, The Agent shell provide the 800mey with copies of all docunw s
and request 90 an eviction be sdreduled wRh the court. Evicdor proceedings must flow procedures
owned In the CaMornk fH Code. The household will be dwgodior tie cost of any legal actions thus
Owner incurs due to Ow actiahs of the tro mdXgd.
3. Partial Rw t Psyauuh
Partd rant payments wM not be accepled UFAM WOOM arrargemer is with the Agent are made in
advance of to tune when rent is due. Rent is dw in hd on the first wai ft day of each month.
4. Reowm V of Damages In ExCsse of SeohrUy Deposit
The ko amount of bads rent and damagee wN first be esmbkhsd Www* and tten fornMy M a
cotxft . denw ages slW01c w tt and to esider>Ys �e d dwmQn d sLMIcleent. part of a
collection agency may be cwwAd to secure the judgment.
E. Prooedurm for Appeal are crl n.nm
Se phye ApwWw* - Manegww t Marl page 9 d 12
1. Eviction Procedures
PaWent ttat haw viofaled weir isass or other regulations wi be given written warm of the
violations. S wA the Wolstlon wrign re, the Agent would Inform the Owner Yhst they "" to k tote
evkdorh procedures.
Evkdorn icr nonpayment of rent are desabed in Section I.0 (2) above. Evk fAon for nuisance anal be
wx*u lan vdw two is domnertable evidence wlnassae of Illegal adivNlss,
poke arm Mn& fosse violations, sic.) 0" kkie tut the Agwit and the attorney may delarmira to be
winnable in cast Court ac kers typically require sbc to On weeks for a deciyiah. Piney meted
wicoora can take longer, and urtoor>lsetd evictions, dependng upon ire waridoad, of the cast at the
time, may take sightly tees time.
No rent wfl be wkcted durkq any ew Abn for ran-payrrtant salons. N a resident who is in the
process of bang evkhbd for rarhpayment of rent dselres to pay the rant in full, then to Property
der shall confer with to Agent to ddm,.* a whWw rent will be accepted. I rare is aa•,epled, to
resident wE be requhed to pay with money order or a users'* dind only. 14 Is determined that the
resident to dtrvnicaiy We or has a serious nwpWnaht probiee, then the Agent Fos the Option of
fvregoiing the rent and cor*wft with the rAclon I to deadline specAied In ON Pay Rent Or CPA
notice hu alroady dtepeed.
2. Pnoeseskq Resident Cots
There No oorasiors when plait. may arbe and it is very imporlartt that Besse problems are
deans d kninedsldy and res W before They haw a dhence to become soft& A problern should
first be taken to the Property Merger. N to Prapaty Manger does not resolve It. to resident should
UM contact tie Fkgiw t Manager. If tte probiarn is not resoiwd st this laud, Yee resident may submit
in wit q hogw complaint to the next posllon of sul porky, which t the Vice-Preeideat / CW for the
rnanogentartt firm. CwYVW s can be mrtilsd or hand delvered to the Agent and can bs signed ar
3. FhA a ftes lan-8
Raeident who **a a lease agreement, Me projeo[s hale rules, shall atttrays be notiled In writing,
with a request l , con ct or remedy on violation. Qupiceis records wg be filed in the makkwfs ft
with any r+asponaee. I the same or otter violations occurs or codrxnes, Iron to raldent wW be advised
in wrftV to cc Inued vbiaYore nM reeull In eviGion. I they 90 continue, the procedure desaibed
in section E (1) above for nuisance violations wll be fnrigrtted.
F. Plans for Winnel R•IsO
1. Howe Ruin
House nles and reguia w ne are an adadhtnent to the Standard Lease Agreement. These will be
reviewed wNh the residents at tie true of the initial s tervisw and dining alentaton prior to move in.
2 Al management vW wil be gaited In wwgsncy procedures and More wi be regu>i" scheduled fire
drtle arhrnuagy. In addition, an arnergency pros d" sheet will be developed by the Agott and will be
provided to all residents upon move in. This sMet will deso*s procedures to be kftvsd in the event
of tire, earthquake, or otter msW occurrence requi" emergency action on the pat of managamers
tall or resident. Pwkxk resident mSAW will be held 10 keep reeldahls acquainted with emergency
procedures.
ill. MAMMANCE AND SECURITY
52" Ddm Aper>rTw t - WWvtgemert Plant Page iD of 12
.1 i.. ..i it fr. r!. t :f - • •! i
IL to
� �,�y� ofe! WftW y�>= will be
by
j jt ny }M
or waaordnary work that to required wS 90w be coMracled out t0 a pfMft *dtortei bm or
undertalm by an onowyee M ft Agent erd billed to #0 Project as an add xW expense. Makri moos
work will also be done by an employee of the Agent and billed bD tits project or contracted out to an Outside
co *ac tor. OubWe c ontraatom will generally be used for 6norg9Echm umwj i or speadz9d rspef<s, and
ta'decapi ig.
The Agent, acoortlrtg to Paragraph 10 of the Martagerrmd Agrewr»M, shall contract for work r+equhV a
*mwed owmactorsuch ore major pkmtbktg, steclrlcal, or modwftd woft
a proven" I~10ieelarseeroe Sdtedtda►
A preventative nakOwmm schedule YA be prepersd ad -updated by the Agent. The AgeM will co matt
out for exMnnimrt and pal aontd services. General soMces will be perfomwd once a morgh and for
trtdlviduai wile on an as needed basis.
The GM0ft and httwW of the buUM will be paired every fine years or as needed. All equlpnm t will be
nuft fined based upon the bxbkkW equipment grade hmm There will be armial hrspecftw of all units to
deMnt" mairga woe neef. Mordriy and weekly wwpocdm of the exterior of the contpierc will ako be
Dt AesldsaNRequesiad MaNrtaraitce
A swvkm call ton will be completed by fM Properly ManaW The Property *W review the
requests and ddwmine ttttsther t requires emergency or routine sMer*m Emwgsrwy mpahs ae those
that dose or mW cam soff4w t damps, or make any area unsat or ur*tt bU*. Every ~ will
be made to correct emergency repairs tiathht 24 hours. Exceptions to Oft could be when part must be
ordered to complete the service. Furdw p uvlWrts for repairs are outlined In Paragraph 10 of the
Martegerrmt Agreement and k wilt be given to the Property gaper. The Property manager w N cortaull
with to Regioad k4woger to deckle who wp be assigned the work depwxtq on the rye and scope of
ttte work M tho evert damages are resideM-caused. the residerst wig be nottiisd of qt amount VW
will be aged for tb actual coat of repairs.
E. lrrspec*m Forms
5e Drtve Ape "aft - Maim awo Plan Page 11 of 12
Annual unit ktspw*m vA be corno@Wd and wM be domed on One sWO apection torm.
F. Sib of Armed Ueafnd life and Rsphcsn wft
Item Ysara rueful lW
Latndscapknp 540
Carpst/Fleo" 5-10
tCit w Appknow 10
Common Appbmn 10
Roof 10-15
Mechanical 25-35
cL SurtteNlance / Controped Accen
52nd Dress Aparlmwft wM hays ads exWlor Nph*q and cor*cked access to the common areas
seem the unkL Surveikancs cameras wo be krstaked widnin the gip, reco" wM be able to
be necaded based an date and arms of a pobnilaf evoL The m000 np wlN be abb to be homed to a
drAce that can be WwWed to die local poke depWrent as requested for 9*1ene or for
in++es0galiott-
• EAwlor PaftV bt p wik be a mkdmurn of l foot sands.
• Common arse courtyvalt wik be a Mk nncsn of 2 foot cam.
• The commnxnlr wd be so=W win concne mnasoM tX* wata and tans.
• Commmity antratnow aid common areas wM hwe etec Mft cx**kad 80CM to reWOU O•
• Suk& ps wkt be pr94Ared far umveftm cameras at aN common areas and comnwndy site
enhances.
• SurvoMwm splw n vA akow for rnnborft and rscmd M from a carntrohm cl !Orion.
* C*w pvmmw fta-0 wMrorxnentd desipa sirnlepfes ham beam wVbm wftd kao 8e design..
• Sgnape nois surveMwm wik be posted an dne oom nxWs main w*wwn.
Language repardknp the corrsncnnit)r beknp a ortnne We commemit . bidu rnp no -drops, vWsrxw, or a mee in
genera, r kck4ed in the buss. Spnape wig be poefsd on-sw su*q-the wmxrKa*ty pohapdn in a
c rkrne pre aton proomm. Mee*o wk{ be s&adnded durft too year vimh the reskbnb amd poke
departmwt to sducste rmdernts on crkne preveribon and to drsc m any cm ww, s regarrdng atm.
AN persons arcs resppnsbb to be aware of dwk aurrou ndaps.
W. ATTACHMEWS
1. Standard Lease Form
2. RL4a and Rq;WaVww
3.
5e [hive Aper"" - Mw apm&V Plan Pap 12 or 12
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5e Drive Apartments
Rules and Regulations
The staff at 5e Drive ARa*nor►ts strive to make your living experience here pleasant
and comfortabW The fo/ m*V regulatio<a ►s wers designed for your comfort and
convenience, as well as your neighbors. We wish to take this opporkinityr to tea you
about them:
'Premises' as used in the Rules and ReguWlons include not only the apartment but all
of the land and knprovemernls kx a parking lots, driveways and common areas
privately owned by the Owner/Agent and generally referred to as the apartment
oom=#*•
SEfrUM A. PROPUMI NOME-114 INFOWATM
1. Office Haas: The Rental Office a open on the days posted. Office taws are as
posh on the office and/or on the builedn board In can of emergency,
Management may be oontacted after office hours via answering servical pager
system.
2. RentColecftw-. AN rents are due and payable to Management ad the Rental Office
on or before to ke day of each month. Please make check or money order
payable to the apartment cammu nityr. Cash payments am not accepted.
3. Late Changes: AN rent are odlecled on the third (3 d) clay of the month or thereafter
are subod to a No The of as specified in your ref agreement. Rent is due on the
first day of the month. Late payment after the first day of the morph is a courlsoy and
shourld not be abused. Three lots payments in a twelve (12) month period is
considered materiel non compliance for duornic late payment of rent.
Collection of Late Rot The forming step-by-step procedure vA be used to collect
all rent in arrears:
a. A 3 or 10 Day Notice to Pay Rent or Out will be served depending on the
hxxkv source at Your corn mnity.
b. Unkawful Detainer Action will be k0aled.
4. Rehuned / NSF Checks. if a Resident has one rskened check. Resident will be
notified that Management will not accept any further personal c hsax, and rents
thereafter will have to be paid by money order or cashiers check The returned
check must be paid for with a money order or casters check within 24 house after
ResidenCs receipt of notice. Any check that is returned is aublect to a S
processirg fee in aeon to the We longs.
5. Lost Keys / Lockouts: Residents locked out after office hours will be charged a fee of
US to have their door opened or Resident may call a locics<ni h at resK*Ws
expense to open the door. Loess will be charged for a fee of $25 per lock Door and
mailbox keys must be returned to Management when Resident vacates.
Pawl d 1
R*fkWs lnW*
6. Extended Absences: Resident should advise Management of any planned
absence for an extended period of time. *House-sttte are not permitted without
prior wren consent of managerrnent.
7. MaN and Newspaperm Only registered Residents are to receive mail. AN mail mull
contain the U address of your residence, which includes to apartmsrd number as
well as the building number (it applicabio). Unwanted or "throw-awW advertising
should be disposed of property.
S. Apartment Inspection: Residents are required to accompany and assist fine
Management staff in the completion of an apartment move -In k%spection farm. This
form is desired to record the corgi of the a parmun t at the time at move -in and
to help determine to trial deposition of the secuxity deposit aftr Pert *wting
residency. BMnnui ft Management will eater each apartment for inspection and
will also deck the smoke detector(s) and replace the air art 1 w ftaW air Eisen,
to property maintain the units equipment. Each resident will be aWled of the
irepecdn Is with a written notice 24 hours in advance.
Upon vacatlr►g,. Resident is entitled to an irepecdon of the apartment to assess
move -out gorges. Resident will be given a n**num of a 484hour notices prior 10 the
inspegion. Reskient will have the right to be present for the inspection, approve for
management to conduct tins inspection withourR being present, or waive the right to
tins inspection.
9. Water FuunNum Waterbede are permitted only in accordance with Callomia law
which irm uance prflbx* g owner in an amount not less that $100,000, and an
increase in polar deposit equal to ome-tW morO's reft Reaidant must ales inlr4
maintain and dismantle the bed in accordance with industry standards. Resident
may not have on the premises an aquarium or any equivalent type of device with a
capacity in excess of ten (10) gatiorts without prior written consent of landlord.
SECTN 19: USE OF PRENII M:
10. UtEty Service; tJ�Nty service must be maintained in resideWs apartment. at
resident's expense AT ALL TIMES. Resident also agrees to cooperate with energy
c orwervadon measures. Fa*xo to maintain utr'tiiy services or to cooperate with
energy conservntion measures will be considered cause for termbm6on of residency.
11. Smoke Detector. Smoke delecion device has been installed in each apartrnenL It is
the Resident's resporraib lity during residency to penodtcapy test the device.
Resit must inform the Management RepresentatI nor inumediaf * In write of any
defect, maMtxu *n or failure of any detecaor(s). Removing or Wnpering with a
smoke deleclor will be considered cause for termination of residency.
Paps 2 012
Resk*Ws Initials
UPddW oaris
12 Unsafe Conditions: Resident agrees to report i vnedstely to Mara genett any
fit, irfrry, damage or loss, or need of service or repairs to water or gas pipes,
electrical wrWng, drains, toilets, ti *"a, or any other properly or equipnwnt covered
by the lease,including at breakage, damage, or loss of any ind Including but rat
limited to water irtrusion. war leaks or moisture probieors of any kind, damage
from overflow of water from sinks, badtt" toilets, or other basins. Resident kX!h0r
agrees to immediately notify Management of unsafe =iditiors in the common areas
and Wounds of the prerises which may lead to damage or injury.
I&Alterations or Addibns: Resident shall not make any aNeradons or additions to the
premises. 9 any repairs, alterations or additions are necessary, Resident aW nay
MamagwneM in writing, Resident shall make no repaks, abrallors, exterior
alterations dude but are not limited to pcsib g of signs, flags, plants on ledges and
wind chimes, addition to the dwoft s1rucW* inside or out widaut first obtaining
written consent from Managennert. American tags may be displayed wthin the lain
of the state and proper dog etiquette. Interior aNerallont include but are not laded
to, charging igtrt ftne. padding, to rVinp wallpaper, eta
14.O award Appearance: Alterations that affect the apartment corrrruWs outward
appearance. such as Installing personal window coverings. foil on windows, towels,
blankets or dothkg draped over balcordss or parr is not permitted. Signs or
adverting materials will not be permilied to be posted. No lot, sign advartisanents,
poster, or similar display, shalt be woad to any door, window or exWW wail do
may be visible from the outside of the building by other residenh.
15.Anbruas: The Federal Communieadons Commission states that ReskW t have a
limited right,to Install a satellite dish or receiving antenna wMiln the leased promises.
f►Aanagemerut Is allowed to impose rsasorrabis reatricdors to such ht"iadon. Al
requests for installation mist be submitted to Mar"emeat in wridnp. The rental
agesetnt mud be amended to inoorporaM requbrementb and resakcllors prior to
awry irstaNadon. For iMonnaion on requirements and restrictions, contact
Management. Rea em shot/ not Install any external television or raft recepdom
device nor climb or have olhers climb upon the root. A separate deposit is required
prior to Wd gallon.
1& 1380s: Due to fire and other salty hazard concerns, no chwcod brkontle ba rbeque
grits, gas or propane grills, cooidnglhw*g Instruments, smokers, tlbachi grills,
portable gas sboves, electric coil grits, elm arms to be shed or operated In the
apartments or on paboa, balconles or breezeway areas. Any use of open flame is
prohibited including but not limited to barbeques and tordes.
17. WWWows and/or Screens: Residents shall be responsive for replacernent and/or
repair of windows and/or screens damaged or removed by residod, members of
Resident's household or guests.
M 1usiness: Resident shall not use the premises or permwt thek premises to be used
for any business purpose, without the prior written consent of Martagerment.
Pape s or 8
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19. Locks: Residents shah not alter any lock or Watell a new lock or knocker on any door
of the premises wilhod the wren consent of Management; and d wdta k4 they
shall not be removed. in st,ch case consent a given Resiident shall provide
Managernerrt with a key for the use of Mwragemtart, pursuant to Management's right
to access to the prenises. Locks or chains mum be left In place when Pmident
vacates.
20. EW prnw* No personal dish -washing make, doom washing madams, clothes
dryer or other large appllances is permitted in the apartment-willwut prior written
consent of manegenrent.
21. Parcels: Resident is responsible for making arrangements for parcel delivery tied;
does not fit in to provided mail receptacle. Menagerrmt epresentdives are not
authorized to sign for parcels. This n*xies parcels from LIPS, Feder Express,
U.S. Postal Servios or other maid and delivery services.
SECTION C: USE Of COI SM AMM
22. The common area end, wa lkwaye, harking _Ift and landscaped amass small not
be obstructed in any manner nor used for sbrape or any other purpose other them
that for which they were designed. No flea markets, yard sales, consuming afcohoil;
beverepes, e1L are permitted in the co nmon areas.
23. NoOces by Residents must be approved by Management and may be posted ordy In
the laundry moms and only on the bulletin boards provided for that purpose.
Management will regulate and approve all bms OW are to be placed on the burn
boards.
24.The Community Room is provided for the owittelve use of the Comnxr>aty's
Residents and their accompanied guests. Most facWJn are avafti* when the
%cilly is open and are to be used at the RWidert s; own risk. Residents wanting io
use the Coa mmx* (loom for prkft parties mar do so by reserving the room,
completing ing the Cvmrnunay Room Agreement, and Placing a desining dep a el Arry
persons) creating a deftrbance or using disorderly conduct in the Com u nny
Room will be restarted from the area. Residents will be responsible for their
household members and gun* at all tines and We for any and all damages to
the ComrMinky Roan.
25. NoftV shah be placed or left overnight In the common area, nor shadd any lken,
clouting, curtains, tugs, mops, or other Nertbs be shaken or burg on or any window,
door, raft, or balcony.
2$.AN flowerpots on the bak,onles and in apartments must have a drainage dish
underneath to prevent waaar damage. No plants may be placed on the ram.
27. Bicycles shall be stored only in the apartments or in the bicycle racks. Stydle riding
Is not allowed within the complex This includes the walkways and grass areas.
Skateboard riding, scooter riding and rdlerbladirg are also riot allowed within the
complex, he includes wa*ways and parking lot areas.
Pap 4of4
PWSkWWS
UpdWW Omr3
2& The maox area Is to be kept dean and Tres from debris.
29. Management shall not be responsible for any item intended for delivery to a
Resident that are delivered to or left in any public area.
30. Nothing sly be swept or thrown out of windows or over balconies of the bWdings.
Mops, brooms, towels, bicycles and similar items may not be left on
patioslbaiconies.
31.The patb/baloony carrot be used as a storage area and must be kept in a dean
and sanity condItion at all gins.
32.The open space around the building has been provided for your use mid en oyment.
Any adift that may damage the WM per• er-. is prohlbitad and any
damaged will be charged to the responsible Resident.
33.ido Items, �lutIft taut not *Tdied ta, outdoor a or ctaiidren's wading pooh, shall remain oversight In the comnx n areas.
34. Management h not mspw*Ue for arty lost or articles of Residents or
guests.
35.8reat care should be taken when moving furniture on the premhes. Any damage to
to promises will be charged to the respon" Residert Damage to the prerrdses
will be charged to the responsible Resident.
SECTION D: MANUENANCEIDAiAGE
38.Emergencies: ErnWWdes affecting the pre rdese should be promplfy reported to
tAanager,neM, please report emergencies oc cuffhV alter once hours to the
emerliwacy numil r as posted of the Rental Office. Residents are coned to use
discretion in reporting emergencies after affbe hours, as only emergencies vA
receive attention after regular hours.
37. Service Reonetsc Routine requests for maintenance will be given to Management in
writlrg whenever possible, Including per n mon to enter in Reside Ws absence or a
request for appointment. Scheduled appointmerm will be set In a 4 hour window.
lulanage l has the right to enter if "ampere I believes an emergency exists.
Resident &press to promptly report need of service or repass to the Property or
egttipment covered by the lease, hadudlrg unsafe conditions in to common areas
and grounds of the premises that may be a threat to heath and safety or lead to
damage or injury.
24. Sewer Sbppages. The sewer system is adequate to handle all normal waste, but
Me system will not handle disposable diapers, fernmine products or other such
refuse. Addition of toilet cleansing tabs can cam stoppage. Stoppages resulting
frogn alterations to egidpment, addition of corrawcial deodorizer and/or resident's
negligence will be cleared at Resident's expense.
�e0s 5 of 5
Resident's WOWS
SECTION & HOUSEKEEPM
25. Standards: Resident shad keep the interior of the apartment dead aoo:ondng to good
housekeeping standards. The includes maintaining all utiity sovoes. Rest will
assume furl responsibif'ity for keeping their patio, entry doors, entrance wallmys,
porchw patios and balconles area waned, neatly arranged and free from u nsighdy
or unused items.
Resident shad keep the promises and such other area as may be assigned for
Resident's exducetve use, including but not dmited to, the apartment ffxhm
appliances, entry doors, window and screens, skWwadcs, parking space(s) and
grounds, in a clean, safe and sandary condition. Resident shad refrain from shaking,
cleaning, hanging do#ww bwvK rugs or other personal property from windows,
balconies or railings.
26. Prevention of Moisture Problems: Moisture problems must be prevented and treated
1919OP60114- MY to prevent mold. Proper venation Is esserft for preventing mold. d
you should have mold develop on windows, was, or Culls, or a musty Odor Is
present In the carpeting, report two conditions to the rental office WvTwdla lsly
wdudkv the window tracks. Condensation, which develops on windows from indoor
molokso, must be wiped down immediately frtd A*V to wb bw tradm
Condensation on windows indicates that fresh air is not being c;irculMed in the home
to prevent moisture buildup. Open your windows and air out your home for short
periods of time to keep fresh or present. Excessive runnM of you heater will dents
cot xW a W m t in your home. Report any rumkv or dripping faucets, ptwrftnq leaks,
root teaks, discoloration of walls or water h1rusion imnwilstsiy to the rental office. -
27. Pest Conbol: Resident shall report the need for pest control to Management.
Reekfannt agrees to cooperate with the pest control services and abide by guidefines
givers by the poet oontinoi service or management.
2& Plasm and Safety: Resident agrees to comply with all obligations imposed upon
Residents by applicable pivvisio ns of State and beef budding and housing codes
maleriady affecting health and safety, irxkJdlrtg mamWmng adequate housekeeping
standards.
29. Storage: Garbage cam botd e, brooms, mops, toys, bicycles, fitness equipment,
cardboard boxes, household furniture. and similar personal property are to be kept
inside the aparlrnenf or a proprialely designMed slorape areas and out of view.
Patios andfor balconies are to be used for pads W ture only. Areas located outside
front doors or on stairway landings are part of the common area and cannot be used
for storage.
30.SmowV. Smoking is not permitted in the unit, common areas or grounds of the
community as a whole. irsedererce with other residerWe runts to the ernloyment of
the promises as a result of smoking may be grounds for tam hidon of residency.
PWO6d$
Rewdsnre rnYiais
trews aans
GROUND LEASE ESTOPPEL
THIS GROUND LEASE ESTOPPEL (this "Estoppen is made as of December 17,
2015, by the CITY OF VERNON, a California charter city and municipal corporation (the
"City") for the benefit of CALIFORNIA COMMUNITY REINVESTMENT CORPORATION, a
California nonprofit public benefit corporation ("CCRC').
RECITALS
A. The City is the fee simple owner of those certain premises located in the City of
Vernon, County of Los Angeles, State of California and more particularly described in Exhibit
A-1 attached hereto (the "Fee Property");
B. 52"d DRIVE APARTMENTS, L.P., a California limited partnership ("Tenant"),
has leased from the City a portion of the Fee Property (the "Leased Premises"), as legally
described in Exhibit A-2 attached hereto pursuant to the terms of that certain Ground Lease dated
as of March 1, 2014 between the City, as landlord, and Tenant, as tenant (the "Ground Lease");
a Memorandum of Lease between the City and the Tenant with respect to the Ground Lease was
recorded in the Official Records of Los Angeles County, California (the "Official Records") on
March 21, 2014, as Instrument No. 20140286017.
C. This Estoppel is being entered into in connection with the loan (the "Bank Project
Loan") made to Tenant pursuant to that certain Construction and Permanent Loan Agreement
(Affordable Housing — California) ("Loan Agreement") dated as of March 1, 2014, between
Bank of America, N.A. ("Bank") and Tenant. The Bank Project Loan is evidenced by a
promissory note dated March 1, 2014 by Tenant to the order of Bank, in the aggregate face
principal amount of $8,820,340.00 (the "Note") and is secured by, inter alia, that certain
Construction and Permanent Leasehold Deed of Trust, with Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated as of March 1, 2014 and recorded March 21, 2014
as Instrument No. 20140286018 in the Official Records by Tenant, as trustor, for the benefit of
Bank, as beneficiary (the "Deed of Trust"). The Loan Agreement, Note, Deed of Trust and all
other documents executed and delivered in connection with the Bank Project Loan, as the same
may from time to time be amended, restated or otherwise modified, are herein sometimes
collectively referred to as the "Loan Documents."
D. Pursuant to that certain Loan Purchase Agreement (the "Loan Purchase
Agreement") dated as of March 1, 2014 by and among Borrower, Bank and CCRC, CCRC is
purchasing the Bank Project Loan from Bank, and the Bank Project Loan will convert into a term
loan as more fully described in the Note. This Estoppel is being delivered to CCRC in
connection with that conversion.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the City hereby represents, warrants and agrees as follows:
A. Estoppel. As of the date hereof, the City hereby represents, warrants and certifies
to CCRC the following:
(i) The Ground Lease is and remains in full force and effect without any
modification or amendment since its Effective Date, and neither the City nor Tenant shall have
terminated or attempted to terminate the Ground Lease. A complete and accurate copy of the
Ground Lease is attached to this Estoppel as Exhibit B. The City certifies to CCRC that, to the
actual knowledge of the City Director of Public Works, Water and Development Services ("City
Representative"), (a) the Ground Lease is in full force and effect; (b) there are no amendments or
modifications of any kind to the Ground Lease; (c) there are no promises, agreements,
understandings or commitments between the City and Tenant, relating to the Leased Premises,
except the Ground Lease; (d) Tenant has not given the City any notice of termination under the
Ground Lease; (e) the City has not given Tenant any notice of termination or default under the
Ground Lease, and (f) all conditions precedent to the effectiveness of the Ground Lease have
been satisfied. The Commencement Date of the Ground Lease, and accordingly the date that the
Ground Lease term commenced, was March 1, 2014.
(ii) All Base Rent due through the initial term of the Ground Lease has been
paid in full by Tenant. No rent is due under the Ground Lease. Neither the Base Rent nor any
Additional Rent (as defined in the Ground Lease) is currently due and owing to the City. No
event that might trigger Additional Rent has occurred, and no Additional Rent can become due
with the giving of notice or the passage of time, or both.
(iii) To the actual knowledge of the City Representative, there have been no
uncured events of default under the Ground Lease, whether or not the same may be continuing,
including, without limitation, any failure to pay Rent. To the actual knowledge of the City
Representative, neither the City nor the Tenant has any right to exercise any termination rights
granted to it under the terms of the Ground Lease.
(iv) Except as otherwise disclosed to CCRC in writing, the Ground Lease has
not have been amended, modified or changed in any manner since its Effective Date.
(v) A Site Management Plan, as referenced in the Ground Lease, has been
prepared in form and substance acceptable to the City. The Site Management Plan is attached as
Attachment No. 8 to the DDA (as defined below).
(vi) To the actual knowledge of the City Representative, Tenant has complied
with all provisions in the Ground Lease related to hazardous materials remediation of the
Property;
(vii) To the actual knowledge of the City Representative, no default or event
that, with the giving of notice or the passage of time, or both, could become a default, has
occurred under the Ground Lease.
(viii) Each of (a) that certain Disposition and Development Agreement dated as
of February 19, 2013 by and between Borrower and the City (the "DDA") and (b) that certain
Development Agreement (the "Development Agreement') dated as of March 5, 2013 and
recorded March 5, 2013 as Instrument No 20130334907 in the Official Records, by and between
the City and Meta Housing Corporation, as an affiliate of Tenant, have been terminated and are
of no further force and effect as of the date hereof, and the Development Agreement is being
removed, released and terminated of -record.
(ix) Entry into the Ground Lease by City was duly authorized, the Ground
Lease was duly executed and delivered by City, and, to the actual knowledge of the City
Representative, the Ground Lease (a) constitutes the legal, valid and binding obligation and
contract of City and (b) is enforceable against City in accordance with its terms. City's
execution of this Estoppel is also duly authorized, and this Estoppel is duly executed and
delivered by City. The undersigned representative of the City is duly authorized and fully
qualified to execute this Estoppel on behalf of the City.
(x) The City has not assigned, encumbered or otherwise transferred its interest
under the Ground Lease.
(xi) The City acknowledges its consent and approval of CCRC's acquisition of
Bank Project Loan from Bank in furtherance of the conversion of the Bank Project Loan into a
permanent loan. Nothing in the Ground Lease or otherwise has affected Section 14.20) of the
Ground Lease. The City agrees that, with respect to the Loan Documents, (a) CCRC shall be a
permitted "Lender" under the Ground Lease, (b) CCRC shall be entitled to all of the rights and
benefits afforded to a "Lender" under the terms of the Ground Lease, and (c) the Deed of Trust is
and shall continue to be (after assignment to CCRC) a "Permitted Encumbrance."
B. Notice. For all purposes of the Ground Lease, "Lender's" address for notice
purposes shall be as set forth below:
California Community Reinvestment Corporation
225 West Broadway, Suite 120
Glendale, California 91204
Attention: Mary Kaiser, President
CCRC may, by written notice to the City, from time to time change its address for notice
purposes under this Estoppel and the Ground Lease.
C. Reliance. This Estoppel is being entered into with the understanding that it is
being relied upon by CCRC in acquiring the Bank Project Loan; provided, however, that this
Estoppel is provided solely for the benefit of CCRC and may not be relied upon or used by any
other party.
3
IN WITNESS WHEREOF, the undersigned parties hereunder have caused this
Agreement to be executed by their duly authorized officers or representatives as of the date
hereof.
CITY OF VERNON, a California charter city and
municipal corporation
By: --A'A" L
Name: C- W k�
Title: City Administrator
EST:
Maria Ayala, 0ty Clerk
4
EXHIBIT A -I
Legal Description of Fee Property
The real property situated in the City of Vernon, County of Los Angeles, State of California,
described as follows:
LOTS 45 TO 53 INCLUSIVE OF TRACT NO. 7923, IN THE CITY OF VERNON, COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 113,
PAGES 80 TO 83 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.
EXHIBIT A-2
Legal Description of Leased Premises
A leasehold estate as created by that certain unrecorded lease dated March 1, 2014, executed by
City of Vernon, a charter city and municipal corporation as lessor and 52nd Drive Apartments,
L.P., a California limited partnership as lessee, as disclosed by a Memorandum of Lease
recorded March 21, 2014 as Instrument No. 20140286017 of Official Records, in and on that
certain Real Property located in the City of Vernon, County of Los Angeles, State of California,
and more particularly described as follows:
LOTS 45 TO 53 INCLUSIVE OF TRACT NO.7923, IN THE CITY OF VERNON, COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 113,
PAGES 80 TO 83 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.
Street Address of Property: 4611, 4627, 4643, 4659 and 4675 52nd Drive, Vernon, CA
APN: 6314-002-901 (formerly 6314-002-900)
6
EXHIBIT B
Ground Lease
GROUND LEASE
By and Between
CITY OF VERNON,
LESSOR
And
52"° DRIVE APARTMENTS, L.P.,
LESSEE
1085816.5 12098-003
GROUND LEASE
This GROUND LEASE (the "Lease') is made as of March 1, 2014 (the "Commencement
Date"), by and between the CITY OF VERNON, a California charter city and municipal
corporation (the "City" or "Lessor'), and 52"D DRIVE APARTMENTS, L.P., a California limited
partnership (the "Lessee").
1. SUBJECT OF LEASE.
The purpose of this Lease is the lease of the "Site" (as hereinafter defined) to Lessee for the
development and operation thereon of a forty-five unit multifamily apartment complex (the
"Housing Development'. This Lease is entered into pursuant to a Disposition and Development
Agreement between City and Lessee dated February 19, 2013 (the "DDA"), and a Regulatory
Agreement between City and Lessee dated March 1, 2014 (the "Regulatory Agreement").
2. LEASE OF THE SITE.
City, for and in consideration of the rents, covenants, and agreements hereinafter reserved
and contained on the part of Lessee to be paid, kept, performed and observed by Lessee, hereby
leases to Lessee, and Lessee hereby leases from City, that certain real property in the City of Vernon
(the "City") shown on the "Site Map" attached hereto as Exhibit "A" and incorporated herein by this
reference, and having the legal description in the "Site Description" attached hereto as Exhibit "B"
and incorporated herein by this reference (the "Site'). Except as expressly provided to the contrary
in this Lease, reference to the Site is to the described land, exclusive of any improvements now or
hereafter located on the land, notwithstanding that any such improvements may or shall be construed
as affixed to and as constituting part of the real property.
3. LEASE TERM.
Lessee shall lease the Site from City and City shall lease the Site to Lessee for a term
extending from the Commencement Date of this Lease (the date set forth in the first paragraph
hereof) until the sixty-fifth (65"') anniversary of the Commencement Date (the "Initial Term'],
unless sooner terminated as provided for herein. Provided that no Event of Default has occurred and
is continuing under this Lease as of the expiration of the Initial Term, Lessee shall, by delivery of
written notice to City no later than twelve (12) months and no earlier than twenty-four (24) months
prior to the expiration of the Initial Term, have the right to extend the term of this Lease for an
additional ten (10) year period (the "Extended Term") on the same terms and conditions contained in
this Lease, commencing on the expiration of the Initial Term. The Initial Term and the Extended
Term are collectively referred to herein as the "Term."
4. RENT.
4.1 Net Lease. It is the intent of the parties hereto that the rent provided herein shall be
absolutely net to City and that Lessee shall pay all costs, taxes; charges, and expenses of every kind
and nature against the Site and the Housing Development which may arise or become due during the
Term, and which, except for execution hereof] would or could have been payable by City.
1085816.5 12098-W3 1
4.2 Basic Rent. During the Initial Term and Extended Term, Lessee agrees to pay City
advance annual rent in the amount of One Dollar ($1.00) (the `Basic Rent"). The Basic Rent shall
be paid on the Commencement Date and each anniversary thereof City acknowledges receipt of
Lessee's payment of the Basic Rent in advance for the initial Term.
4.3 Additional Rent. The parties agree that upon the occurrence ofcertain events as set
forth below, if Lessee receives cash proceeds as a result of such events, City shall receive a portion
of such proceeds as "Additional Rent." For these purposes, receipt by Lessee of value in a form
other than cash will be treated as receipt by Lessee of the cash equivalent of such value based on the
fair market value of what is received by Lessee.
(a) Determination of Fair Market Rent Upon Certain Events. Additional
Rent shall become due in the event of and upon the occurrence of any of the following; (1) the
refinancing of the Project Loan (as defined in Section 15 hereof), (2) Lessee's sale or assignment of
its interest in the Housing Development and this Lease, (3) the expiration of the Tax Credit
Regulatory Agreement (as defined in the DDA), (4) the commencement of the Extended Term of
this Lease, and (5) affirmation of the Ground Lease in a bankruptcy proceeding. In each such event,
Additional Rent shall be calculated as follows;
The Additional Rent shall be the fair market value ground lease rent for the Site
(including the land but excluding the improvements thereon) pursuant to the Ground Lease, taking
into consideration the restrictions recorded against the Site, to the extent such restrictions remain
applicable and enforceable (the "Applicable Recorded Restrictions'). The fair market rent shall be
determined by an independent appraisal performed by a qualified, independent appraiser who is
reasonably acceptable to City and Lessee. Such independent appraisal shall determine the fair
market value of the Site, at its highest and best use, but subject to the Applicable Recorded
Restrictions. The appraisal shall further determine the fair market value ground lease rent, subject to
the Applicable Recorded Restrictions, over the remaining Term of this Lease, with an objective that
the City cumulatively receive over the remaining Term of this Lease the fair market value ground
lease rent under the Ground Lease, subject to the Applicable Recorded Restrictions.
Notwithstanding the foregoing, however, in no event shall the Additional Rent in any year (a) be a
negative number, or (b) exceed fifty percent (501/6) of the Residual Receipts of the Housing
Development. For purposes hereof, "Residual Receipts" shall mean annual project revenue
(excluding loan proceeds, capital contributions and security deposits received) less the sum of (i)
operating expenses, (ii) debt service, (iii) reserve deposits, (iv) partnership management fees, (v)
deferred developer fees, and (vi) asset management fees, for each calendar year, provided, however,
that if such calculation results in a negative number, Residual Receipts shall be zero for that year.
Upon the occurrence of any of the above events triggering the obligation to pay Additional Rent, the
parties shall mutually agree upon procedures for reporting and determining Residual Receipts.
(b) Payment Upon Refinancing. If in accordance with Section 15 hereof Lessee
borrows money whose repayment is secured, directly or indirectly, by Lessee's leasehold interest
hereunder, in a transaction that does not involve an Assignment as described in paragraph (c) below,
Lessee shall pay City a sum equal to fifty percent (500/e) of the Net Financing Proceeds (as defined
below) as Additional Rent ("City's Pro Rata Share of the Net Financing Proceeds"). If there are
other Project Loans or Permitted Encumbrances which also require payment of a portion of Net
1085816.5 12M-003 2
Financing Proceeds, Lessee shall use good faith efforts to reach an agreement with such other lender
or lenders as to an equitable distribution of Met Financing Proceeds between or among such parties.
Such Additional Rent shall be due and payable immediately upon the funding of the loan, and shall
be payable in addition to any other sums payable by Lessee under this Lease. Lessee shall provide
City a complete accounting of the Net Financing Proceeds. No Additional Rent shall be payable
upon the closing of the initial construction loan and permanent loan conversion permitted pursuant to
Section 401 of the DDA. For purposes of this paragraph, "Net Financing Proceeds" shall mean the
initial principal sum of the new loan, less (i) all amounts necessary to repay encumbrances to be
satisfied in connection therewith, if such encumbrances were approved or permitted in accordance
with this Lease or otherwise expressly consented to by City in writing, (ii) actual and reasonable
costs of refinancing, and (iii) any amount by which the refinancing lender requires Lessee to increase
Lessee's reserves for the Housing Development as a condition of such refinancing.
(c) Payment Upon Sale or Assignment. If Lessee sells or assigns its interest in
the Housing Development and this Lease, directly or indirectly, other than through a Permitted
Transfer (as defined in Section 14.2 hereof), Lessee shall pay City a sum equal to fifty percent (500/0)
of the Net Sales Proceeds (as defined below) as Additional Rent ("City's Pro Rata Share of the Net
Sales Proceeds"). If there are other Project Loans or Permitted Encumbrances which also require
payment of a portion of Net Sales Proceeds, Lessee shall use good faith efforts to reach an
agreement with such other lender or lenders as to an equitable distribution of Net Sales Proceeds
between or among such parties. Such Additional Rent shall be due and payable immediately upon
the closing of the sale or assignment, and shall be payable in addition to any other sums payable by
Lessee under this Lease. Lessee shall provide City a complete accounting of the Net Sale Proceeds.
For purposes of the fast sale or assignment, "Net Sales Proceeds" shall mean the total purchase price
of the Housing Development payable to Lessee, less (i) all amounts necessary to repay
encumbrances to be satisfied in connection therewith, if such encumbrances were approved or
permitted in accordance with this Lease or otherwise expressly consented to by City in writing; (ii)
actual and reasonable costs of sale, and (iii) any amount paid to the limited partner in Lessee (who
purchased such interest in order to benefit from the favorable tax treatment arising from the Housing
Development) for any repurchase or redemption of such partner's limited partnership interest in
Lessee completed by Lessee or its affiliates pursuant to a purchase option and exercised in
accordance with the terms of this Lease. For purposes of subsequent sales or assignments, "Net
Sales Proceeds" shall mean the total purchase price of the Housing Development payable to Lessee,
less the purchase price paid by Lessee.
(d) Payment of Additional Rent into Capital Account. City may elect, at its
sole discretion, for all or a portion of the Additional Rent to be deposited directly into a capital
account to be established by Lessee instead of being paid to City. In such event City and Lessee
shall mutually agree upon the permitted uses of the capital account, which may include such uses as
specified capital improvements to the Housing Development and social service programs for the
benefit of the residents of the Housing Development.
(e) Application of Additional Rent Payments to Repayment of City Loan.
Until the loan provided by City to Lessee pursuant to that certain loan Agreement dated July 3,
2013 (the "City Loan") has been paid in full, any payments of Additional Rent pursuant to
1095816.5 12098-M
paragraphs (a), (b) and (c) of this Section 4.3 shall be applied to the repayment of the City Loan and
shall be credited against any amounts owing thereunder.
4A Payment of Rent. All rent that becomes due and payable pursuant to this Lease shall
be paid to City at the address of City listed in Section 25.7 or such other place as City may from time
to time designate by written notice to the Lessee without notice or demand, and without setoff,
counterclaim, abatement, deferment, suspension or deduction.
5. USE OF THE SITE.
5.1 Use of the Site. Lessee covenants and agrees for itself, its successors and assigns,
that during the Term, the Site and the Housing Development shall be devoted to those uses as set
forth in this Lease and the Regulatory Agreement. Lessee covenants and agrees to cause the
Housing Development to be used only for the purposes set forth in Section 6 hereof, and no other
uses without the prior approval of the City, which approval may be given or withheld as provided
therein.
5.2 Only Lawful Uses Permitted. Lessee shall not use the Site or the Housing
Development for any purpose that is in violation of any law, ordinance or regulation of any federal,
state, county or local governmental agency, body or entity. Furthermore, Lessee shall not maintain
or commit any nuisance or unlawful conduct (as now or hereafter defined by any applicable statutory
or decisional law) on the Site or the Housing Development, or any part thereof.
5.3 Site Management Plan; Property Management. Lessee has prepared a "Site
Management Plan" which sets forth in detail Lessee's property management duties, a marketing plan,
a tenant selection process, a security system and crime prevention program, the procedures for the
collection of rent, the procedures for eviction of tenants, the rules and regulations of the Housing
Development and manner of enforcement, a standard lease form, an operating budget, the identity of
the manager of the Housing Development (the "Property Manager"), a resident services program,
and other matters relevant to the management of the Housing Development. The Site Management
Plan shall prohibit the Property Manager from lobbying, influencing, or attempting to influence any
residents of the Housing Development or other registered voters of the City with respect to any
matters which require the approval of the City or the electorate of the City. Any violation of this
Section 5.3 shall be deemed a material breach of this Lease. The Site Management Plan is attached
hereto as Exhibit D and incorporated herein. The Site Management Plan may be revised from time
to time with the approval of the City. The management of the Housing Development shall be in
compliance with the Site Management Plan which is approved by the City. If the City determines
that the performance of the Property Manager is deficient based upon the standards set forth in the
Site Management Plan and in this Lease, the City shall provide notice to Lessee of such deficiencies,
and Lessee shall use its best efforts to correct such deficiencies. In the event that such deficiencies
have not been cured within the time set forth in this Lease, the City shall have the right to require
Lessee to immediately remove and replace the Property Manager with another property manager or
property management company which is reasonably acceptable to the City, which is not related to or
affiliated with Lessee, and which has not less than five (5) years' experience in property
management, including significant experience managing housing facilities of the size, quality and
scope of the Housing Development.
1085816_5 12098-M 4
5.4 Selection of Tennis. Lessee shall be responsible for the selection of tenants for the
Housing Units in compliance with lawful and reasonable criteria, as set forth in the Site Management
Plan, and according to a system which provides an agreed upon priority for persons employed or
residing in the City of Vernon or within a 1 mile radius as measured from the center of the Site. The
Site Management Plan shall include a system for the random selection of tenants from a pool of
applicants. Tenants shall meet criteria which is reasonable and customary for similar multifamily
developments. Tenant selection shall be made in an open and public manner. The tenant selection
system in the Site Management Plan shall be designed to prevent favoritism and outside influences
of any kind in the selection process. The tenant selection system shall provide for due diligence by
Lessee in evaluation of the applications for eligibility criteria, including the basis of any requested
priority. Representatives of the City shall be entitled to enter, inspect the records of, and audit the
Housing Development with respect to the tenant selection process as provided in Section 25.5
hereof. Any violation of the tenant selection system shall be deemed a material breach ofthis Lease.
5.5 Capital Reserve Requirements. Lessee shall also, or cause the Property Manager
to, annually set aside an amount of Three Hundred Dollars ($300) per Housing Unit (or such larger
amount as may be required by a Housing Development lender), from the gross rents received from
the Housing Development, into a separate interest -bearing trust account in the name of Lessee (the
"Capital Replacement Reserve); provided, however, to the extent Lessee is required by any lender
to maintain a separate account to hold deposits for capital reserves, the amount of such deposits shall
be credited towards Lessee's obligations under this suction. Such amount shall be adjusted annually
by the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor for
All Urban Consumers, Los Angeles — Riverside — Orange County, California (all items),1982-84 =
100, or its successor index (the "Consumer Price Index"). Funds in the Capital Replacement
Reserve shall be used for capital replacements to the Housing Development fixtures and equipment
which are normally capitalized under generally accepted accounting principles. The non -availability
of funds in the Capital Replacement Reserve does not in any manner relieve Lessee of the obligation
to undertake necessary capital repairs and improvements and to continue to maintain the Housing
Development in the manner prescribed herein. Not less than once per year, Lessee, at its expense,
shall submit to the City an accounting for the Capital Replacement Reserve. Capital repairs to and
replacement of the Housing Development shall include only those items with a long useful life,
including without limitation the following: carpet and drape replacement; appliance replacement;
exterior painting, including exterior trim; hot water heater replacement; plumbing fixtures
replacement, including tubs and showers, toilets, lavatories, sinks, faucets; air conditioning and
heating replacement; asphalt repair and replacement, and seal coating; roofing repair and
replacement; landscape tree replacement; irrigation pipe and controls replacement; gas line pipe
replacement; lighting fixture replacement; common area furniture replacement; common area
repainting, and uninsured losses due to casualties such as earthquakes.
5.6 Naming Rights. City shall have the exclusive non-commercial right to select the
name of the Housing Development in its sole discretion to honor one or more civic or business
leaders, as the City Council may designate. Lessee agrees to cooperate in the placement of a suitable
monument or other feature to memorialize this honor, at the City's expense. Lessee shall use the
name selected by City on all exterior and interior project signage, written materials and letterhead,
leases and other project documents, and shall verbally refer to the Housing Development by the
selected name. The parties shall jointly agree in advance on the scheduling of any official naming
1085816.5 12098-003
ceremonies, and the press announcements regarding such ceremonies, and both parties shall have the
right to participate in any such naming ceremonies.
5.7 Prohibition on Lobbying. Lessee and its officers and employees shall not lobby,
influence, or attempt to influence any residents of the Housing Development or other registered
voters of the City with respect to any matters which require the approval of the City or the electorate
of the City. Any violation of this Section 5.7 shall be deemed a material breach of this Lease.
6. OPERATING COVENANT.
6.1 Operation in Accordance with Agreement. The Lessee covenants and agrees that,
at all times during the Term of this Lease, Lessee shall operate the Housing Development as a forty-
five unit multifamily apartment project. All uses conducted on the Site, including, without
limitation, all activities undertaken by the Lessee pursuant to this Lease, shall conform to all
applicable provisions of the City Municipal Code, and the recorded documents pertaining to and
running with the Site.
6.2 Subordination of Affordability Requirements. City has entered into a
Subordination Agreement by and among Bank of America, N.A., Lessee and City dated March 1,
2014, which subordinates the affordable housing covenants set forth in the Regulatory Agreement to
the liens of the construction loan and permanent loan. In connection with any future refinancing of
such loans, and in the event that the City finds that an economically feasible method of financing for
the construction and operation of the Housing Development, without the subordination of the
affordable housing covenants as may be set forth in the Regulatory Agreement, is not reasonably
available, the City shall make the affordable housing covenants set forth in the Regulatory
Agreement junior and subordinate to the deeds of trust and other documents required in connection
with such refinancing for the Housing Development approved pursuant to Section 15 hereof. Any
subordination agreement entered into by the City with respect to such refinancing shall contain
written commitments which the City finds are reasonably designed to protect City's investment in
the event of Default, such as either of the following: (a) a right of City to cure a default on the loan
prior to foreclosure, or (b) a right of City to negotiate with the lender after notice of default from the
lender and prior to foreclosure.
7. UTILITIES AND TAXES.
7.1 Utilities. Lessee shall pay all charges for gas, electricity, garbage collection, and
other utilities furnished to the Site and the Housing Development and all hookup or similar charges
or assessments for utilities levied against the Site and the Housing Development for any period
included within the Term.
7.2 Real Estate Taxes.
(a) Lessee covenants and agrees to pay before delinquency all real estate taxes,
assessments and liens of every kind and nature upon Lessee's possessory interest in the Site and the
Housing Development. "Real estate taxes" shall mean all real estate taxes, assessments for
improvements to the Site, public agency water and sewer rates and charges, or any other assessments
1085816.5 120"-003 6
or taxes, which shall be levied against the Site or the Housing Development, or any interest therein,
and which become a lien thereon and accrue during the Term.
(b) Lessee shall have the right to apply for and receive a welfare exemption from
the payment of property taxes pursuant to Revenue and Taxation Code Section 214(g) (or successor
statute).
(c) Lessee shall have the right to contest the amount or validity of any real estate
taxes, in whole or in part, by appropriate administrative and legal proceedings, without any costs or
expense to City.
73 Personal Property. Lessee covenants and agrees to pay before delinquency all
personal property taxes, assessments and liens of every kind and nature upon all personal property as
may be from time to time situated within the Site and the Housing Development.
8. OWNERSHIP OF IMPROVEMENTS, FIXTURES AND FURNISHINGS.
8.1 Ownership of Improvements During Term. All improvements constructed on the
Site by Lessee as permitted by this Lease (die "Housing Development") shall, during the Term, be
and remain the property of Lessee; provided, however, that Lessee shall have no right to waste the
Housing Development, or to destroy, demolish or remove the Housing Development except as
othervAse permitted pursuant to this Lease; and provided further that Lessee's rights and powers
with respect to the Housing Development are subject to the terms and limitations of this Lease.
8.2 Ownership of Land During Term. The Site (exclusive of the Housing
Development) shall, throughout the Tenn, be and remain the property of City. City represents and
warrants to Lessee that it has the power and authority to enter into this Lease and to perform all
obligations and agreements incidental or pertinent to this Lease. City shall not incur any lien or
encumbrance on or against the Site unless such lien or encumbrance is a Permitted Fee
Encumbrance. For purposes of this Lease, a "Permitted Fee Encumbrance" shall mean any of the
following: (a) a lien for real or personal property taxes, assessments or other governmental charges
or levies on the Property that are not yet delinquent or that are being contested in good faith by
appropriate action with sufficient bonds or reserves therefor; (b) an inchoate mechanic's or material
supplier's lien or similar lien for work, materials, services or equipment provided to the Housing
Development for which payment is not delinquent; or (c) the covenants, conditions, restrictions,
reservations, rights, rights -of -way, and easements of record prior to the recordation of the
Memorandum of Lease.
9. INDEMNIFICATION: FAITHFUL PERFORMANCE.
Lessee shall not suffer or permit any liens to be enforced against the City's fee simple estate
as to the Site, to City's fee simple estate in reversion of the Housing Development, nor against
Lessee's leasehold interest therein by reason of work, labor, services or materials supplied or
claimed to have been supplied to Lessee or anyone holding the Site and the Housing Development,
or any part thereof, through or under Lessee. Lessee agrees to defend, indemnify, and hold City and
its officers, officials, employees, agents, and representatives, harmless against such liens. If any
such lien shall at any time be filed against the Site or the Housing Development, Lessee shall, within
1085816.5 12098-003 7
thirty (30) days after notice to Lessee of the filing thereof, cause the same to be discharged of record;
provided, however, that Lessee shall have the right to contest the amount or validity, in whole or in
part, of any such lien by appropriate proceedings but in such event, Lessee shall notify City and
promptly bond such lien in the manner authorized by law with a responsible surety company
qualified to do business in the State of California or provide other security acceptable to City.
Lessee shall prosecute such proceedings with due diligence. Nothing in this Lease shall be deemed
to be, nor shall be construed in any way to constitute, the consent or request of City, express or
implied, by inference or otherwise, to any person, firm or limited partnership for the performance of
any labor or the furnishing of any materials for any construction, rebuilding, alteration or repair of or
to the Site, the Housing Development, or any part thereof. Prior to commencement of construction
of the Housing Development on the Site, or any repair or alteration thereto, Lessee shall give City
not less than thirty (30) days advance notice in writing of intention to begin said activity in order that
nonresponsibility notices may be posted and recorded as provided by State and local laws.
10. MAINTENANCE AND REPAIR.
Lessee agrees to assume full responsibility for the management, operation and maintenance
of the Housing Development and the Site throughout the Term without expense to City, and to
perform all repairs and replacements necessary to maintain and preserve the Housing Development
and the Site in good repair, in a neat, clean, safe and orderly condition, in accordance with the
standard of maintenance of high quality apartment projects within Los Angeles County, California,
reasonably satisfactory to City and in compliance with all applicable laws. Lessee shall maintain the
Housing Development, all buildings, all exterior facades, all sidewalks, and all exterior areas, in a
safe and sanitary fashion. The Lessee agrees to provide utility services, administrative services,
supplies, contract services, maintenance, maintenance reserves, and management which are
necessary for the maintenance of the Housing Development. Lessee agrees that City shall not be
required to perform any maintenance, repairs or services or to assume any expense in connection
with the Housing Development and the Site. Lessee hereby waives all rights to make repairs or to
cause any work to be performed at the expense of City as may be provided for in Section 1941 and
1942 of the California Civil Code, if applicable. The Lessee shall manage and maintain the Housing
Development on the Site in conformity with the City Municipal Code. Parking lots, lighting
fixtures, trash enclosures, and all areas which can be seen from the adjacent streets shall be kept free
from any debris or waste materials by regularly scheduled maintenance. If at any time Lessee fails
to maintain the Housing Development in accordance with this Lease and such condition is not
corrected within five days after written notice from the City with respect to graffiti, debris, and waste
material, or thirty days after written notice from the City with respect to general maintenance,
landscaping and building improvements, then the City, in addition to whatever remedy it may have
at law or at equity, shall have the right to enter upon the applicable portion of the Housing
Development and perform all acts and work necessary to protect, maintain, and preserve the Housing
Development, and to attach a lien upon the Housing Development, or to assess the Housing
Development, in the amount of the expenditures arising from such acts and work of protection,
maintenance, and preservation by the City and/or costs of such cure, including a reasonable
administrative charge, which amount shall be promptly paid by Lessee to the City upon demand.
1085816.5 12098.003
11. ENVIRONMENTAL MATTERS.
11.1 Definitions. For the purposes of this Lease, unless the context otherwise specifies or
requires, the following terms shall have the meanings herein specified:
(a) The term "Hazardous Materials" shall mean any substance, material, or waste
which is or becomes regulated by any local governmental authority, the County of Riverside, the
State of California, regional governmental authority or the United States Government, including, but
not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely
hazardous waste," or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed
pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5
(Hazardous Waste Control Law)), (h) defined as a "hazardous substance" under Section 25316 of the
California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous
Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or
"hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20,
Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20,
Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos,
(vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely
hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Division 4,
Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water
Act (33 U.S.C. § 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. §9601 et seq. "Hazardous Materials" shall not include
such products in quantities as are customarily used in the construction, maintenance, rehabilitation or
management of residential developments or associated buildings and grounds, or typically used in
residential activities in a manner typical of other comparable residential developments, or substances
commonly ingested by a significant population living within the Housing Development, including
without limitation alcohol, aspirin, tobacco and saccharine.
(b) The term "Hazardous Materials Contamination" shall mean the contamination
(whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater,
air or other elements on, in or of the Site by Hazardous Materials, or the contamination of the
buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result
of Hazardous Materials at any time (whether before or after the Date of Lease) emanating from the
Site.
(e) The term "Governmental Requirements" shall mean all past, present and
future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States,
the state, the county, the city, or any other political subdivision in which the Site is located, and any
other state, county city, political subdivision, agency, instrumentality or other entity exercising
jurisdiction over City, Lessee or the Site.
11.2 Site Evaluation. Pursuant to Sections 205 and 206 of the DDA, Lessee has had an
opportunity, prior to the Commencement Date of this Lease, to engage its own environmental
1085816.5 12098-003
consultant to make such investigations of the Site as Lessee has deemed necessary, and Lessee has
approved the environmental condition of the Site. Lessee assumes any and all responsibility and
Liabilities (as defined in Section 11.3 of this Lease) for all Hazardous Materials Contamination of
the Site which occurs during the Term of this Lease or extension thereof.
11.3 lndemnifkation. Upon and after the Commencement Date of this Lease, Lessee
agrees to indemnify, defend and hold City harmless from and against any claim, action, suit,
proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense
(including, without limitation, reasonable attorneys' fees), resulting from, arising out of, or based
upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials on,
under, in or about, or the transportation of any such Hazardous Materials to or from, the Site during
the term of this Lease, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule,
regulation, permit, judgment or license relating to the use, generation, release, discharge, storage,
disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Site during
the term of this Lease, excepting only any such loss, liability, claim, or judgment arising out of the
intentional wrongdoing or gross negligence of City, or its officers, officials, employees, members,
agents, volunteers, or representatives. This indemnity shall include, without limitation, any damage,
liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding,
including injunctive, mandamus, equity or action at law, for personal injury (including sickness,
disease or death), tangible or intangible property damage, compensation for lost wages, business
income, profits or other economic loss, damage to the natural resource or the environment, nuisance,
contamination, leak, spill, release or other adverse effect on the environment. Lessee's obligations
under this Section 11.3 shall survive the expiration of this Lease.
City agrees to indemnify, defend and hold Lessee and its officers, employees, agents and
representatives harmless from and against any claim, action, suit, proceeding, damage, liability,
deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys'
fees), resulting from, arising out of, or based upon the negligent acts or willful misconduct of the
City or its officers, employees, agents, representatives or contractors with respect to the disposal or
handling of any Hazardous Materials on, under, in or about, or the transportation of any such
Hazardous Materials to or from, the Site. At the request of the City, the Lessee shall cooperate with
and assist the City in its defense of any such claim, action, suit, proceeding, loss, cost, damage,
liability, deficiency, fine, penalty, punitive damage, or expense; provided that the Lessee shall not be
obligated to incur any expense in connection with such cooperation or assistance.
11.4 Duty to Prevent Hazardous Materials Contamination. Lessee shall take all
commercially reasonable precautions to prevent the release of any Hazardous Materials into the
environment. Such precautions shall include compliance with all Governmental Requirements with
respect to Hazardous Materials. In addition, Lessee shall install and utilize such equipment and
implement and adhere to such procedures as are consistent with commercially reasonable standards
generally applied by similar industrial facilities as respects the disclosure, storage, use, removal, and
disposal of Hazardous Materials.
11.5 Obligation of Lessee to Remediate Premises. Lessee shall, at its sole expense,
design and install a vapor barrier and a venting system to reduce the vapor release from the Site to an
acceptable level, and perform all Remediation required pursuant to the DDA. Notwithstanding the
1085816.5 12098.003 10
obligation of Lessee to indemnify City pursuant to Section 11.3 of this Lease, Lessee shall, at its sole
cost and expense, promptly take (i) all actions required by any federal, state, regional, or local
governmental.agency or political subdivision or any Governmental Requirements and (ii) all actions
necessary and commercially reasonable to develop and operate the Housing Development in
accordance with this Lease, which requirements or necessity arise from the presence upon, about or
beneath the Site of any Hazardous Materials or Hazardous Materials Contamination no matter when
occurring. Such actions shall include, but not be limited to, the investigation of the environmental
condition of the Site, the preparation of any feasibility studies or reports and the performance of any
cleanup, remedial, removal or restoration work. Lessee shall take all actions necessary to promptly
restore the Site to an environmentally sound condition for the uses contemplated by this Lease
notwithstanding any lesser standard of remediation allowable under applicable Governmental
Requirements. The Lessee's duties hereunder shall not affect any rights Lessee has pursuant to
Section 11.3 hereof.
11.6 Right of Entry. Notwithstanding any other term or provision of this Lease, Lessee
shall permit City or its agents or employees to enter the Site at any time during normal business
hours (except in the event of an emergency), without prior notice in the event of an emergency, and
with not less than forty-eight (48) hours advance notice if no emergency is involved, to inspect,
monitor and/or take emergency or long-term remedial action with respect to Hazardous Materials
and Hazardous Materials Contamination on or affecting the Site, or to discharge Lessee's obligations
hereunder with respect to such Hazardous Materials and Hazardous Materials Contamination when
Lessee has failed to do so after notice from City and an opportunity to cure such deficiency. All
costs and expenses incurred by City in connection with performing Lessee's obligations hereunder
shall be reimbursed by Lessee to City within thirty (30) days of Lessee's receipt of written request
therefor.
11.7 Storage or Handling of Hazardous Materials. Lessee, at its sole cost and expense,
shall comply and shall cause its tenants to comply with all Governmental Requirements for the
storage, use, transportation, handling and disposal of Hazardous Materials on or about the Site,
including without limitation wastes generated in connection with the uses conducted on the Site. In
the event Lessee will store, use, transport, handle or dispose of any Hazardous Materials, Lessee
shall notify City in writing at least ten (10) days prior to their first appearance on the Site and
Lessee's failure to do so shall constitute a material default under this Lease. Lessee shall conduct all
monitoring activities required or prescribed by applicable Governmental Requirements, and shall, at
its sole cost and expense, comply with all posting requirements of Proposition 65 or any other
similarly enacted Governmental Requirements. In addition, in the event of any complaint or
governmental inquiry, or if otherwise deemed necessary by City in its reasonable judgment, City
may require Lessee, at Lessee's sole cost and expense, to conduct specific monitoring or testing
activities with respect to Hazardous Materials on the Site. Such monitoring programs shall be in
compliance with applicable Governmental Requirements, and any program related to the specific
monitoring of or testing for Hazardous Materials on the Site, shall be satisfactory to City, in City's
reasonable discretion. Lessee shall further be solely responsible, and shall reimburse City, for all
costs and expenses incurred by City arising out of or connected with the removal, clean-up and/or
restoration work and materials necessary to return the Site and any property adjacent to the Site
affected by Hazardous Materials emanating from the Site to their condition existing at the time of the
Lessee's Site Evaluation. Lessee's obligations hereunder shall survive the termination of this Lease.
1085816.5 12M-OD3 11
11.8 Environmental Inquiries. Lessee shall notify City, and provide to City a copy or
copies, of the following environmental permits, disclosures, applications, entitlements or inquiries
relating to the Siie: notices of violation, notices to comply, citations, inquiries, clean-up or
abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements, and
reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous
Materials and underground tanks, and Lessee shall report to City, as soon as possible after each
incident, any unusual, potentially important incidents.
In the event of a release of any Hazardous Materials into the environment, Lessee shall, as
soon as possible after the release, furnish to City a copy of any and all reports relating thereto and
copies of all correspondence with governmental agencies relating to the release. Upon request of
City, Lessee shall furnish to City a copy or copies of any and all other environmental entitlements or
inquiries relating to or affecting the Site including, but not limited to, all permit applications, permits
and reports including, without limitation, those reports and other matters which may be characterized
as confidential.
12. ALTERATION OF IMPROVEMENTS.
Upon completion of the Housing Development pursuant to the requirements of the DDA,
Lessee shall not make or permit to be made any structural alteration of the exterior of the Housing
Development, nor demolish all or any part of the Housing Development, without obtaining all
required City permits and entitlements, and without obtaining the prior written consent of City,
which consent shall not be unreasonably withheld. The foregoing shall not prohibit or restrict the
repair and/or replacement of the Housing Development by Lessee in accordance with Section 10
hereof. In requesting such consent of the City Lessee shall submit to City detailed plans and
specifications of the proposed work and an explanation of the need and reasons therefor. This
provision shall not limit or set aside any obligation of Lessee under this Lease to maintain the
Housing Development and the Site in a clean and safe condition, including structural repair and
restoration of damaged Housing Development. City shall not be obligated by this Lease to make any
improvements to the Site or to assume any expense therefor. Lessee shall not commit or suffer to be
committed any waste or impairment of the Site or the Housing Development, or any part thereof,
except as otherwise permitted pursuant to this Lease.
13. DAMAGE OR DESTRUCTION.
13.1 Obligation to Repair and Restore Damage Due to Casualty Covered by
Insurance. Subject to Section 13.3 below and the provisions of all Mortgages, if the Housing
Development shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire
or other casualty required to be insured against by Lessee, Lessee shall promptly proceed to obtain
insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon
receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the
Housing Development to substantially the same condition as the Housing Development is required to
be maintained in pursuant to this Lease, whether or not the insurance proceeds are sufficient to cover
the actual cost of repair, replacement, or restoration, and Lessee shall complete the same as soon as
possible thereafter so that the Housing Development can be occupied in accordance with this Lease.
Subject to Section 25.22, in no event shall the repair, replacement, or restoration period exceed one
1085816.5 1209&003 12
(1) year from the date Lessee obtains insurance proceeds unless the City Administrator or designee,
in his or her sole and absolute discretion, approves a longer period of time. City shall cooperate with
Lessee, at no expense to City, in obtaining any governmental permits required for the repair,
replacement, or restoration. If, however, the then -existing laws of any other governmental agencies
with jurisdiction over the Site or the provisions of any Mortgages do not permit the repair,
replacement, or restoration, Lessee may elect not to repair, replace, or restore the Housing
Development by giving notice to City (in which event Lessee will be entitled to all insurance
proceeds, subject to Lessee's obligations to Mortgagees or other third parties, but Lessee shall be
required to remove all debris from the Site) or Lessee may reconstruct such other improvements on
the Site as are consistent with applicable land use regulations and approved by the City, and all other
governmental agency or agencies with jurisdiction. In the event Lessee elects not to repair, replace,
or restore and give City notice of such election as provided herein, this Lease shall terminate.
13.2 Continued Operations. During any period of repair, Lessee shall continue, or cause
the continuation of, the operation of the Housing Development on the Site to the extent reasonably
practicable from the standpoint of prudent business management.
13.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance.
If the Housing Development is completely destroyed or substantially damaged by a casualty for
which Lessee is not required to (and has not) insured against, then City shall deliver written notice to
Lessee of its obligations under this Section 13.3 within thirty (30) days of such event of substantial
damage or destruction, and Lessee shall not be required to repair, replace, or restore such
improvements and may elect not to do so by providing City with written notice of election not to
repair, replace, or restore within ninety (90) days after such substantial damage or destruction. in
such event, Lessee shall remove all debris from the applicable portion of the Site. As used in this
Section 13.3, "substantial damage" caused by a casualty not required to be (and not) covered by
insurance shall mean damage or destruction which is fifteen percent (15%) or more of the
replacement cost of the improvements comprising the Housing Development. In the event that the
City delivers such notice to Lessee but Lessee does not timely elect not to repair, replace, or restore
the Dousing Development as set forth in the first sentence of this Section 13.3, Lessee shall be
conclusively deemed to have waived its right not to repair, replace, or restore the Housing
Development and thereafter Lessee shall promptly commence and complete the repair, replacement,
or restoration of the damaged or destroyed Housing Development in accordance with Section 13.1
above and continue operation of the Housing Development during the period of repair (if
practicable) in accordance with Section 13.2 above. In the event Lessee elects not to repair, replace,
or restore, and gives City notice of such election as provided herein, this Lease shall terminate,
subject to the provisions of Section 24.5 hereof. Notwithstanding the foregoing, however, no such
termination shall occur so long as (i) the holder of any Mortgage provides a notice of default to
Lessee based on such failure to repair, replace and rebuild and thereafter seeks to obtain possession
of the Site for the purposes of causing such rebuilding to occur, or the holder of the Mortgage or its
designee becomes the Lessee under a New Lease pursuant to section 24.5(e) hereof and thereafter
seeks to obtain possession of the Site for the purposes of causing such rebuilding to occur, and (ii)
such party clears any debris and maintains the property in a safe condition, and (iii) such party
commences, diligently pursues and completes the rebuilding in accordance with a commercially
reasonable schedule which is mutually acceptable to such party and City.
1085816.5 12098-003 13
14. SALE, ASSIGNMENT, LEASE OR OTHER TRANSFER
14.1 Prohibition of Sale, Assignment, Lease or Transfer. Except for Permitted
Transfers as provided pursuant to Section 14.2 hereof, Lessee shall not sell, assign, Lease, or
otherwise transfer this Lease or any right therein, nor make any total or partial sale, assignment,
lease, or transfer in any other mode or form of the whole or any part of the Site or the Housing
Development (each of which events is referred to in this Lease as an "Assignment'), without prior
written approval of City. Any purported assignment without the prior written consent of City, except
for assignments permitted pursuant to 14.2 hereof, shall render this Lease absolutely null and void
and shall confer no rights whatsoever upon any purported assignee or transferee. Lessee shall only
assign, Lease, or transfer the Site and the Housing Development as a whole and is not permitted to
subdivide the Site and the Housing Development for the duration of this Lease without the prior
written approval of City. Notwithstanding any provision in this Section 14.1 to the contrary, in no
event shall Lessee make any assignment which would or could be effective beyond the Term
(including extensions thereof) without the prior written consent of the City. City may assign or
transfer any of its rights or obligations under this Lease with the approval of the Lessee, which
approval shall not be unreasonably withheld.
14.2 Permitted Transfers. Notwithstanding any other provision of this Lease to the
contrary, City approval of an assignment of this Lease or conveyance of the Housing Development,
or any part thereof, shall not be required in connection with any of the following:
(a) The conveyance or dedication of any portion of the Site to the City, or the
granting of easements or permits to facilitate construction of the Housing Development.
(b) Any required assignment for financing purposes (subject to such financing
being considered and approved by City), including the grant of a deed of trust to secure the funds
necessary for land acquisition, construction and permanent financing of the Housing Development.
(c) Any transfers to a limited partnership formed for the purpose of obtaining Tax
Credits for the Housing Development, in which Meta Housing Corporation (or an entity wholly
owned by Meta Housing Corporation or John Huskey) is the administrative general partner and
Western Community Housing, Inc. (or a limited liability company wholly owned by Western
Community Housing, Inc.) is the managing general partner, subject to City approval of the identity
of the limited partners.
(d) The lease of Housing Units to qualified tenants.
(e) Lessee's conveyance of the Site or the limited partnership interest in Lessee to
Meta Housing Corporation, or another entity affiliated with and controlled by Meta Housing
Corporation or John Huskey, in accordance with the option to purchase set forth in Lessee's
partnership agreement.
(f) A transfer of a general partnership interest in Lessee to a nonprofit managing
general partner entity.
1085816.5 120"-M 14
(g) Notwithstanding anything to the contrary contained herein, without the
consent of the City, each Investor Limited Partner shall have the right to assign its interests as
limited partner in the Lessee to an entity which is controlled by such Investor Limited Partner or is
under common control with such Investor Limited Partner.
(h) Notwithstanding anything to the contrary contained herein, Investor Limited
Partner shall have the right to remove either general partner of Lessee, or both general partners, and
substitute any Investor Limited Partner or an affiliate thereof as a general partner of the Lessee,
pursuant to the Partnership Agreement, without City's consent. Any proposed replacement of a
general partner with an entity other than an investor Limited Partner or an affiliate thereof will be
subject to City's prior consent, which shall not be unreasonably withheld.
(i) The foreclosure or deed in lieu thereof by a Mortgagee of its interest in the
Housing Development pursuant to a Project Loan.
(j) California Community Reinvestment Corporation's acquisition of the Project
Loan from Bank of America N.A. in furtherance of the conversion of such loan.
In the event of an assignment by Lessee under subparagraph (c) or (e) above not requiring
City's prior approval, Lessee nevertheless agrees that at least thirty (30) days prior to such
assignment it shall give written notice to City of such assignment and provide to the City an
assignment and assumption agreement reasonably satisfactory to City. Upon the City's approval of
such assignment and assumption agreement, the assigning Lessee shall not be responsible for any
obligations hereunder which arise after the effective date of the assignment and assumption
agreement, provided that the assigning Lessee shall retain all indemnification obligations under this
Lease.
15. FINANCING.
Lessee may, at any time and from time to time during the Term, upon prior written notice to
City and subject to the requirements of Sections 401 - 408 of the DDA, mortgage, pledge,
hypothecate or otherwise encumber in connection with project financing to a federally or state
chartered bank or savings and loan, a life insurance company, a mortgage company, a pension fund,
investment trust or similar institutional lender or trustee as required in connection with project
financing (herein called "Lender'), by deed of trust or mortgage or other security instrument, all of
Lessee's right, title and interest pursuant to this Lease and the leasehold estate hereby ("Project
Loan'). Project Loans shall include the construction loan and permanent loan approved by the City
pursuant to Section 401 of the DDA as set forth on Exhibit F, attached hereto, and the refinancing of
the permanent loan, provided that the principal amount of the refinancing does not exceed the then
current amount owed pursuant to the loan, and the interest rate and other terms and conditions of the
refinancing do not exceed current market rates. The encumbrances securing the Project Loans,
together with refinancing of the Project Loans and any other loan or encumbrance approved by City
pursuant to the DDA and this Lease, shall be deemed to be "Permitted Encumbrances."
Notwithstanding anything in this Section 15 to the contrary, Lessee shall not, without the prior
written consent of City, which may be given or withheld in City's sole discretion, obtain any Project
1085816.5 1209&003 15
Loan or other conveyance for financing secured by the Housing Development or this Lease, the term
of which Capital Project Loan or other conveyance for financing purposes extends beyond the Term.
16. INDEMNITY.
Lessee shall defend, indemnify, assume all responsibility for, and hold City and its officers,
employees, agents, and representatives harmless from, all claims, demands, damages, defense costs
or liability of any kind or nature (including reasonable attorneys' fees and costs) and for any
damages to property or injuries to persons, including accidental death, which may be caused by or
arise out of (a) the Lessee's performance or failure to perform its obligations pursuant to this Lease,
whether such activities or performance thereof be by the Lessee or by anyone employed or
contracted with by the Lessee and whether such damage shall accrue or be discovered before or after
termination of this Lease, or (b) from any defect in the Site or the Housing Development, or for any
defects in the Development Plans approved by City pursuant to the DDA, or for any structural or
other defects in any work done according to the approved Development Plans, or for any delays
reasonably caused by the City's review and approval of the Development Plans, or (c) from any
displacement of residents or liability for relocation assistance pursuant to Government Code Section
7260, et seq., due to the acts of Lessee hereunder, or (d) Lessee's performance or nonperformance of
its obligations under the DDA , Lessee's ownership or operation of the Housing Development, or (e)
challenges to the approval, validity, applicability, interpretation or implementation of the DDA or
the California Environmental Quality Act approvals made in connection therewith, or (f) the
noncompliance by Lessee of any applicable local, state and/or federal law, including, without
limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable,
the requirement to pay state prevailing wages); (g) the implementation of Section 1781 of the Labor
Code, as the same may be amended from time to time, or any other similar law; or (h) failure by
Lessee to provide any required disclosure or identification as required by Labor Code Section 1781,
as the same may be amended from time to time, or any other similar law. Lessee shall not be liable
for property damage or bodily injury occasioned by the negligence of, willful misconduct of, or
breach of this Lease by City or its agents or employees.
17. INSURANCE.
17.1 Insurance to be Provided by Lessee. During the Term, Lessee, at its sole cost and
expense, shall itself take out and maintain, or cause to be taken out and maintained, the following
insurance coverage, in addition to any insurance which may be required pursuant to the DDA:
(a) Maintain a policy or policies of all-risk property insurance. Such insurance
policy shall be maintained in an amount not less than one hundred percent (100%) of the "Full
Insurable Value" of the Housing Development, as defined herein in this Section IT
(b) Maintain, in an amount not less than One Million Dollars ($1,000,000) per
occurrence with a Three Million Dollars ($3,000,000) aggregate, commercial general liability policy
including contractual liability. The required amount of insurance shall be subject to increases as
City may reasonably require from time to time, but not more frequently than every twenty-four (24)
months. in no event shall such increase or increases exceed the increase during such period in the
CPI.
1085816.5 12098-003 16
(e) Maintain a comprehensive automobile liability policy in not less than the
amount of One Million Dollars ($1,000,000) combined single limit. The required amount of
insurance shall be subject to increases as City may reasonably require from time to time, but not
more frequently than every twenty-four (24) months. In no event shall such increase or increases
exceed the increase during such period in the CPI.
(d) Maintain worker's compensation insurance issued by a responsible carrier
authorized under the laws of the State of California to insure employers against liability for
compensation under the workers' compensation laws now in force in California, or any laws
hereafter enacted as an amendment or supplement thereto or in lieu thereof Such workers'
compensation insurance shall cover all persons employed by Lessee and/or Property Manager in
connection with the Site and the Housing Development and shall cover full liability for
compensation under any such act aforesaid, based upon death or bodily injury claims made by, for
on behalf of any person incurring or suffering injury or death in connection with the Site or the
Housing Development or the operation thereof by Lessee or Property Manager.
(e) Maintain until the completion of construction of the Housing Development a
builder's risk policy covering damage or loss up to the value of labor and materials.
(f) Maintain or caused to be maintained use and occupancy or business
interruption or rental income insurance against the perils of fire, lightning, vandalism, malicious
mischief, riot and civil commotion, and such other perils ordinarily included in extended coverage
fire insurance policies, in the amount that is reasonably acceptable to the Lessee and City.
17.2 Definition of "Full Insurable Value." The term "Full Insurable Value" as used in
this Section 17 shall mean the actual replacement cost of the Housing Development, including the
cost of construction of the Housing Development, architectural and engineering fees, applicable
governmental fees, and inspection and supervision. Lessee shall maintain the insurance policy
required by Section 17.1(a) hereof at the current Full Insurable Value of the Housing Development,
17.3 General Insurance Provisions. All policies of insurance provided for in this Section
17, except for the workers' compensation insurance, shall name Lessee and any subtenant as the
insured and City and its officers, employees, agents, and representatives, as additional insureds, as
their respective interests may appear. Lessee agrees to timely pay or cause to be timely paid all
premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with
all insurance requirements necessary for the maintenance of such insurance. Lessee agrees to submit
policies of all insurance required by this Section 17 of this Lease, or certificates evidencing the
existence thereof, to City on or before the effective date of this Lease, indicating full coverage of the
contractual liability imposed by this Lease. At least thirty (30) days prior to expiration of any such
policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be submitted
to City. All policies shall be written by good and solvent insurers qualified to do business in
California and reasonably acceptable to the City Director or designee. All policies or certificates of
insurance shall also: (i) provide that such policies shall not be cancelled or limited in any manner
without at least thirty (30) days prior written notice to City; and (ii) provide that such coverage is
primary and not contributing with any insurance as may be obtained by City and shall contain a
waiver of subrogation for the benefit of the City. Lessee agrees that provisions of this Section as to
1085816.5 12096-003 17
maintenance of insurance shall not be construed as limiting in any way the extent to which Lessee
may be held responsible for the payment of damages to persons or property resulting from Lessee's
activities, activities of its sublessees or the activities of any other person or persons for which Lessee
is otherwise responsible
17.4 Failure to Maintain Insurance. If Lessee fails or refuses to procure or maintain
insurance as required by this Lease, City shall have the right, at City's election, and upon ten (10)
days prior notice to Lessee, to procure and maintain such insurance. The premiums paid by City
shall be treated as added Rent due from Lessee, to be paid on the first day of the month following the
date on which the premiums were paid. City shall give prompt notice of the payment of such
premiums, stating the amounts paid and the name of the insured(s).
17.5 Insurance Proceeds Resulting from Loss or Damage to Housing Development.
All proceeds of insurance with respect to loss or damage to the Housing Development during the
term of this Lease shall be payable, under the provisions of the policy of insurance and subject to the
provisions of all Mortgages, to Lessee, and said proceeds shall constitute a trust fund to be used for
the restoration, repair and rebuilding of the Housing Development in accordance with plans and
specifications approved in writing by City. To the extent that such proceeds exceed the cost of such
restoration, repair or rebuilding, then such proceeds shall be used to repay any outstanding loans
secured by encumbrances upon the Site, and any remaining proceeds shall be apportioned between
Lessee and City as their interests may appear. Notwithstanding the foregoing, within the period
during which a Permitted Encumbrance is in effect, such proceeds shall be payable in accordance
with the Permitted Encumbrance documents.
In the event this Lease is terminated by mutual agreement ofCity and Lessee, as approved by
all Mortgagees, and the Housing Development is not restored, repaired or rebuilt, then, subject to the
consent of the Mortgagees, the insurance proceeds shall be jointly retained by City and Lessee and
shall be applied first to any payments due under this Lease from Lessee to City, second to restore the
Site and Housing Development to their original condition and to a neat and clean condition (if
permitted by the Mortgagees), third to repay any outstanding loans secured by encumbrances upon
the Site, and finally any excess shall be apportioned between Lessee and City as their interests may
appear, and Lessee shall have no further obligation hereunder to restore, repair or rebuild the
Housing Development. The value of each interest for the purpose of apportioning excess proceeds
under this Section 17.5 shall be the fair market value of such interests immediately prior to the
occurrence of the damage or destruction.
18. EMINENT DOMAIN.
In the event that the Site and/or the Housing Development or any part thereof shall be taken
for public purposes by condemnation as a result of any action or proceeding in eminent domain,
then, as between City and Lessee, but subject to the provisions of all Mortgages, the interests of City
and Lessee in the award and the effect of the taking upon this Lease shall be as follows:
(a) In the event of such taking of only a part of the Site, leaving the remainder of
the Site in such location and in such form, shape and size as to be used effectively and practicably
for the conduct thereon of the uses permitted hereunder, this Lease shall terminate and end as to the
1085816.5 120%-003 18
portion of the Site so taken as of the date title to such portion vests in the condemning authority, but
shall continue in full force and effect as to the portion of the Site not so taken and from and after
such date the rental required by this Lease to be paid by Lessee to City shall be reduced in the
proportion which the number of square feet so taken bears to the total number of square feet in the
Site.
(b) In the event of taking of only a part of the Site, leaving the remainder of the
Site in such location, or in such form, shape or reduced size as to render the same not effectively and
practicably usable and economically feasible for the conduct thereon of the uses permitted
hereunder, as reasonably determined by the Lessee, this Lease and all right, title and interest
thereunder shall cease on the date title to the Site or the portion thereof so taken vests in the
condemning authority.
(e) In the event the entire Site is taken, this Lease and all of the right, title and
interest thereunder, shall cease on the date title to the Site so taken vests in the condemning
authority.
(d) In the event of taking of only Lessee's leasehold interest in the Site, subject to
the approval of all Mortgagees, this Lease shall terminate.
(e) Promptly after a partial taking, at Lessee's expense and in the manner
specified in provisions of this Lease related to maintenance, repairs, alterations, Lessee shall restore
the Housing Development, to the extent possible and as permitted by law, and to the extent of
condemnation proceeds received by Lessee, so as to place them in a condition suitable for the uses
and purposes for which the Site was leased.
(1) In the event of any taking under subparagraphs (a), (b), (c) or (d) hereinabove,
that portion of any award of compensation attributable to the fair market value of the Site or portion
thereof taken, valued as subject to this Lease, shall belong to City. That portion of any award
attributable to the fair market value of Lessee's leasehold interest in the Site and Improvements
pursuant to this Lease, and any separate award made to Lessee for loss of business or for the taking
of Lessee's fixtures and improvements, shall belong to Lessee, subject to the provisions of the
Mortgages. This Section 18 shall be Lessee's sole and exclusive remedy in the event of any taking.
Lessee hereby waives the benefits of California Code of Civil Procedure § 1265.130.
(g) In the event of a partial taking, where the Lease remains in effect and Lessee
is obligated to restore or repair the Housing Development, then Lessee shall be entitled to any
portion ofthe award attributable to severance damages to Lessee's interest in the remaining Housing
Development, and any remaining severance damages shall be payable to City. Lessee's award shall
be used for the restoiation, repair or rebuilding of the Housing Development in accordance with
plans and specifications approved in writing by City to the extent necessary to restore or repair the
Housing Development, subject to the provisions of the Mortgages. The value of each interest for the
purpose of apportionment under this Section shall be the fair market value of such interests at the
time of the taking.
(h) Notwithstanding the foregoing provisions of this Section, City may, in its
1085816.5 12M9 W3 19
discretion and without affecting the validity and existence of this Lease, transfer City's interests in
the Site in lieu of condemnation to any authority entitled to exercise the power of eminent domain.
In the event of such transfer by City, Lessee (or mortgagee if a mortgage is then in effect) and City
shall retain whatever rights they may have to recover from said authority the fair market value of
their respective interests in the Housing Development taken by the authority.
(i) All valuations to be made pursuant to this Section 18 shall be made by mutual
agreement of City and Lessee.
19. OBLIGATION TO REFRAIN FROM DISCRIMINATION.
Lessee covenants by and for itself and any successors in interest 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, transfer, use,
occupancy, tenure or enjoyment of the Site, nor shall Lessee 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 residents, lessees, or vendees of the
Site or any portion thereof. The foregoing covenants shall run with the land.
20. NONDISCRIMINATION IN EMPLOYMENT.
Lessee, for itself and its successors and assigns, agrees that during the operation of the
Housing Development provided for in this Lease, and during any work of repair or replacement,
Lessee shall not discriminate against any employee or applicant for employment because of race,
color, creed, religion, sex, marital status, physical or mental disability, sexual orientation, ancestry or
national origin, or on the basis of any other category or status not permitted by law.
Lessee agrees, at its sole cost and expense, to itself comply, and to use its best commercially
reasonable efforts to secure compliance by all contractors and subtenants of the Site and Housing
Development, with all the requirements now in force, or which may hereafter be in force, of all
municipal, county, state and federal authorities, pertaining to the Site and the Housing Development,
as well as operations conducted thereon, and to faithfully observe and secure compliance by all
contractors and subtenants of the Site and Housing Development with, in the use of the Site and the
Housing Development all applicable county and municipal ordinances and state and federal statutes
now in force or which may hereafter be in force, and to pay before delinquency all taxes,
assessments, and fees, if any, assessor levied upon Lessee or the Site or the Housing Development,
including the land and any buildings, structures, machines, appliances or other improvements of any
nature whatsoever, erected, installed or maintained by Lessee or by reason of the business or other
activities of Lessee upon or in connection with the Site and the Housing Development. Lessee shall
use good faith efforts to prevent residential tenants from maintaining any nuisance or other unlawful
conduct on or about the Property, and shall take such actions as are reasonably required to abate any
such violations by residential tenants of the Site and Housing Development. The judgment of any
court of competent jurisdiction, or the admission of Lessee or any residential tenant or permittee in
any action or proceeding against them, or any of them, whether City be a party thereto or not, that
1095816.5 12ON-003 20
Lessee, residential tenant or permittee has violated any such ordinance or statute in the use of the
Site or the Housing Development shall be conclusive of that fact as between City and Lessee, or
such residential tenant or permittee.
22. ENTRY AND INSPECTION.
City reserves and shall have the right during reasonable business hours (except in cases of
emergency), upon forty-eight (48) hours prior written notice (except in cases of emergency) to
Lessee by the City Administrator or designee, to enter the Site and the Housing Development for the
purpose of viewing and ascertaining the condition of the same, or to protect its interests in the Site
and the Housing Development or to inspect the operations conducted thereon, subject to the City's
indemnification obligations as set forth in Section 16 hereof.
23. RIGHT TO MAINTAIN.
In the event that the entry or inspection by City pursuant to Section 22 hereof discloses that
the Site or the Housing Development are not in a decent, safe, and sanitary condition, City shall have
the right, after thirty (30) days written notice to Lessee (except in case of emergency, in which event
no notice shall be necessary), to have any necessary maintenance work done for and at the expense
of Lessee and Lessee hereby agrees to pay promptly any and all costs incurred by City in having
such necessary maintenance work done in order to keep the Site and the Housing Development in a
decent, safe and sanitary condition, provided that the City delivers such notice which is required
hereunder. The rights reserved in this Section shall not create any obligations on City or increase
obligations elsewhere in this Lease imposed on City.
24. EVENTS OF DEFAULT AND REMEDIES.
24.1 Events of Default by Lessee. Subject to the force majeure provisions of Section
25.22 hereof, the occurrence of any one or more of the following shall constitute an event of default
hereunder:
(a) Lessee shall fail to constrict the Housing Development in accordancewith the
DDA and within the times set forth in the DDA, subject to force majeure delays as set forth in
Section 702 of the DDA, within thirty (30) days of notice from the City that such construction has
not been completed within the required time; or
(b) Lessee shall abandon or surrender the Site or the Housing Development; or
(c) Lessee shall fail or refuse to pay, within thirty (30) days of notice from City
that the same is due, any installment of Rent or any other sum required by this Lease to be paid by
Lessee; or
(d) Lessee shall fail to materially perform any covenant or condition of this Lease,
other than as set forth in subparagraphs (a) or (b) above, and any such failure is not cured within
thirty (30) days following the service on Lessee of a written notice from City specifying the failure
complained of, or if it is not reasonably practicable to cure or remedy such failure within such
thirty (30) day period, then Lessee shall not be deemed to be in default if Lessee shall commence
10858165 12098-M 21
such cure within such thirty (30) day period and thereafter diligently prosecute such cure to
completion; or
(e) Subject to any restrictions or limitations placed on City by applicable laws
governing bankruptcy, Lessee's (i) application for, consent to or suffering of the appointment of a
receiver, trustee or liquidator for all or for a substantial portion of its assets; (ii) making a general
assignment for the benefit of creditors; (iii) admitting in writing its inability to pay its debts or its
willingness to be adjudged a bankrupt; (iv) becoming unable to or failing to pay its debts as they
mature; (v) being adjudged a bankrupt; (vi) filing a voluntary petition or suffering an involuntary
petition under any bankruptcy, arrangement, reorganization or insolvency law (unless in the case of
an involuntary petition, the same is dismissed within ninety (90) days of such filing); (vii) convening
a meeting of its creditors or any class thereof for purposes of effecting a moratorium, extension or
composition of its debts; or (vii i) suffering or permitting to continue unstayed and in effect for ninety
(90) consecutive days any attachment, levy, execution or seizure of all or a portion of Lessee's assets
or of Lessee's interest in this Lease,
Notwithstanding anything to the contrary contained in this Lease, prior to declaring any
default or taking any remedy permitted under this Lease or applicable law based upon an alleged
default, Lessee's limited partner (as set forth on Exhibit E, the "Tax Credit Partner") shall have a
period of not less than sixty (60) days to cure such alleged default; provided, however, if in order to
cure such default Tax Credit Partner reasonably believes that it must remove a general partner of
Lessee, or all of them, pursuant to that certain Lessee's limited partnership agreement, Tax Credit
Partner shall so notify City and so long as Tax Credit Partner is reasonably and diligently attempting
to remove the general partner or general partners, Tax Credit Partner shall have until the date sixty
(60) days after the effective date of the removal of the general partner or general partners to cure
such default but in no event more than one (1) year.
24.2 Remedies of City.
In the event of any such default as described in Section 24.1, City may, at its option:
(a) Correct or cause to be corrected said default and charge the costs thereof
(including costs incurred by City in enforcing this provision) to the account of Lessee, which charge
shall be due and payable within thirty (30) days after presentation by City of a statement of all or
part of said costs;
(b) Correct or cause to be corrected said default and pay the costs thereof
(including costs incurred by City in enforcing this provision) from the proceeds of any insurance;
(c) Exercise its right to maintain any and all actions at law or suits in equity to
compel Lessee to correct or cause to be corrected said default;
(d) Have a receiver appointed to take possession of Lessee's interest in the Site
and the Housing Development, with power in said receiver to administer Lessee's interest in the Site
and the Housing Development, to collect all funds available to Lessee in connection with its
operation and maintenance of the Site and the Housing Development; and to perform all other
consistent with Lessee's obligation under this Lease as the court deems proper; and
1095816.5 12098-003 22
In the event that Lessee's default has not been cured within one hundred twenty (120)
days from the date of City's notice pursuant to Section 24.1, in addition to the foregoing remedies
City shall also be entitled to terminate this Lease and immediately regain possession of the Site.
Notwithstanding anything to the contrary in this Lease, in no event shall City have the right to
terminate this Lease as a result of the occurrence and continuance of an Event of Default or
otherwise until the expiration of the fifteen (15) year tax credit compliance period as described in
Section 42(ixl) of the internal Revenue Code of 1986, as amended, except with the consent of the
Tax Credit Partner.
24.3 Damages. Damages which City recovers in the event of default under this Lease
shall be those which are then available under applicable California case and statutory law to lessors
for leases in the State of California including, but not limited to, any accrued but unpaid rent and the
worth at the time of award of the amount by which the unpaid rent for the balance of the term of this
Lease after the date of award exceeds the amount of such rental loss for the same period that Lessee
proves could be reasonably avoided.
24.4 Rights and Remedies are Cumulative. The remedies provided by this Section 24
are not exclusive and shall be cumulative to all other rights and remedies possessed by City. The
exercise by City of one or more such rights or remedies shall not preclude the exercise by it, at the
same or different times, of any other rights or remedies for the same default or any other default by
Lessee.
24.5 Rights of Lenders.
(a) General Provisions. At all times during the Tenn, Lessee shall have the right
to mortgage, pledge, deed intrust, assign rents, issues and profits and/or collaterally (or absolutely
for purposes of security if required by any lender) assign its interest in this Lease, or otherwise
encumber this Lease, and/or the interest of Lessee hereunder, in whole or in part, and any interests or
rights appurtenant to this Lease, and to assign or pledge the same as security for any debt (the holder
of any such mortgage, pledge or other encumbrance, and the beneficiary of any such deed of trust
being hereafter referred to as "Mortgagee" and the mortgage, pledge, deed of trust or other
instrument hereafter referred to as "Mortgage'), upon and subject to each and all of the following
terms and conditions:
i. Any Mortgage is subject to the requirements of Section 15 hereof.
ii. Except as otherwise set forth herein to the contrary, all rights acquired
by said Mortgagee shall be subject to each and all of the covenants, conditions and restrictions set
forth in this Lease, and to all rights of City thereunder, none of which covenants, conditions and
restrictions is or shall be waived by City by reason of the giving of such Mortgage. If Lessee
encumbers its leasehold estate by way of a Mortgage as permitted herein, and if City is advised in
writing of the name and address of the Mortgagee, then this Lease shall not be terminated or
canceled on account of any Event of Default by Lessee in the performance of the terms, covenants or
conditions hereof until City shall have complied with the provisions of this Lease as to the
Mortgagee's rights to cure and to obtain a new lease.
1085816-5 1209&003 23
(b) Consent of Mortgagee Required. No cancellation, surrender, termination, or
modification of this Lease shall be effective without the prior written consent of the holder of any
Mortgage.
(c) Notice of Defaults. If Lessee or Lessee's successors or assigns shall
mortgage the leasehold interest herein demised, then, as long as any such Mortgage shall remain
unsatisfied of record, City agrees to give Mortgagee immediate notice of all defaults by Lessee under
the Lease, and to simultaneously give to Mortgagee a written copy of all notices and demands that
City gives to Lessee. No notice or demand under the Lease shall be effective until after notice is
received by Mortgagee. Any notices of default given by City under the Lease shall describe the
default(s) with reasonable detail. Mortgagee shall have the right to cure any breach or default within
the time periods given below.
(d) Mortgagee's Cure Rights.
I. Notice and Cure. After receipt by Lessee and Mortgagee of a notice
of default under the Lease and the subsequent expiration of any applicable period of cure given to
Lessee under the Lease, City shall deliver an additional notice ("Mortgagee's Notice' to Mortgagee
again specifying the default and stating that Lessee's period of cure has expired. Mortgagee shall
thereupon have the additional periods of time to cure any uncured default, as set forth below, without
payment of default charges, fees, late charges or interest that might otherwise be payable by Lessee.
City shall not terminate the Lease or exercise its other remedies under the Lease if -
A. Within sixty (60) days after Mortgagee's receipt of the
Mortgagee's Notice, Mortgagee (i) cures the default, or (ii) if the default reasonably requires more
than sixty (60) days to cure, commences to cure said default and diligently prosecutes the same to
completion; or
B. Where the default cannot be cured by payment or expenditure
of money or without possession of the Property or otherwise, Mortgagee initiates foreclosure or
other appropriate proceedings within sixty (60) days after receipt of the Mortgagee's Notice, cures
all other defaults reasonably capable of cure, complies with all other covenants and conditions ofthe
Lease reasonably capable of compliance, and causes the continued payment of all rents, real property
taxes and assessments, and insurance premiums to be paid by Lessee under the Lease.
ii. City agrees to accept performance by Mortgagee of all cures,
conditions and covenants as though performed by Lessee, and agrees to permit Mortgagee access to
the Property to take all such actions as may be necessary or useful to perform any condition or
covenants of the Lease or to cure any default of Lessee. Mortgagee shall not be required to perform
any act which is not susceptible to performance by Mortgagee.
iii. if Mortgagee elects any of the above -mentioned options, then if
Mortgagee or its designee, or the successful bidder at the foreclosure sale, acquires the Lease by
foreclosure, whether by power of sale or otherwise or by deed or assignment in lieu of foreclosure,
or if a receiver be appointed, the Lease shall continue in full force and effect, provided that
Mortgagee or such other party shall cure all prior defaults of Lessee under the Lease that are
1083816.5 120"-003 24
reasonably capable of being cured by Mortgagee or such other party within the time set forth in said
Section, and City shall treat Mortgagee or such other party as Lessee under the Lease. If Mortgagee
commences an action as set forth above, and thereafter Lessee cures such defaults (which cure City
shall be obligated to accept) and Mortgagee then terminates all proceedings under the option in said
Section, then the Lease shall remain in full force and effect between City and Lessee.
(e) New Lease. In the event the Lease is terminated for any reason prior to the
end of the Lease Term, City shall enter into a new lease ("New Lease') with Mortgagee or
Mortgagee's nominee covering the Property, provided that Mortgagee (a) requests such New Lease
by written notice to City within thirty (30) days after written notice by City to Mortgagee of
termination of the Lease, and (b) cures all prior defaults of Lessee that are reasonably capable of
being cured by Mortgagee. Mortgagee shall then have sixty (60) days following the later to occur of
(i) the date of execution and delivery of a new lease of the Property (a "New Lease"), or (ii) the date
on which Mortgagee or its nominee is able to occupy the Property following eviction of or vacating
by Lessee under the Lease, to cure such default; provided, however, that if any such default, by its
nature, is such that it cannot practicably be cured within sixty (60) days, then Mortgagee shall have
such time as shall be reasonably necessary to cure the default provided that Mortgagee commences
such cure within such sixty (60) day period and thereafter diligently prosecutes the cure to
completion. The New Lease shall be for the remainder of the Lease Term, effective at the date of
such termination, and shall only include all the rents and all the covenants, agreements, conditions,
provisions, restrictions and limitations contained in the Lease, except as otherwise provided in the
Lease. In connection with a New Lease, City shall assign to Mortgagee or its nominee all of City's
interest in all existing subleases of all or any part of the Property and all attornment given by the
sublessees. City shall not terminate or agree to terminate any sublease or enter into any new lease or
sublease for all or any portion of the Property without Mortgagee's prior written consent, unless
Mortgagee fails to deliver its request for a New Lease under this Section. In connection with any
such New Lease, City shall, by grant deed, convey to Mortgagee or its nominee title to the
Improvements, if any, which become vested in City as a result of termination of the Lease. City
shall allow to the Lessee under the New Lease a credit equal to the net income derived by City from
the Property during the period from the date of termination of the Lease until the date of execution of
the New Lease under this Section, against rent due during such period Anything herein contained to
the contrary notwithstanding, the provisions of this Section shall inure only to the benefit of the
holders of Mortgages. If the holders of more than one such Mortgage shall make written requests
upon City in accordance with this Lease, the new lease (as provided for above) shall be entered into
pursuant to the request of the holder whose Mortgage shall be prior in lien thereto and thereupon the
written requests for a new lease of each holder of a Mortgage junior in lien shall be and be deemed
to be void and of no force or effect
(f) Security Deposits. Mortgagee or any other purchaser at a foreclosure sale of
the Mortgage (or Mortgagee or its nominee if one of them enters into a New Lease with City) shall
succeed to all the interest of Lessee in any security or other deposits or other impound payments paid
by Lessee to City.
(g) Permitted Delays. So long as Mortgagee is prevented by any process or
injunction issued by any court or by any statutory stay, or by reason of any action by any court
having jurisdiction of any bankruptcy or insolvency proceeding involving Lessee, from commencing
1085816.5 120"-003 25
or prosecuting foreclosure or other appropriate proceedings in the nature thereof, Mortgagee shall
not be deemed for that reason to have failed to commence such proceedings or to have failed to
diligently prosecute such proceedings, provided that Mortgagee uses reasonable efforts to contest
and appeal the issuance or continuance of any such process, stay or injunction.
(h) Defaults Deemed Cured. On transfer of the Lease at any foreclosure sale
under the Mortgage or by deed or assignment in lieu of foreclosure, or upon creation of a New
Lease, any or all of the following defaults relating to the prior owner of the Lease shall be deemed
cured:
i. Attachment, execution or other judicial levy upon this Lease or the
leasehold estate hereby created;
I Assignment of this Lease or the leasehold estate hereby created for the
direct or indirect benefit of creditors of any prior Lessee;
iiL Judicial appointment of a receiver or similar officer to take possession
of the Premises, this Lease or any property of any prior Lessee not located on the Premises;
iv. Filing any petition by, for or against any prior Lessee (or any affiliate)
under any chapter of the federal Bankruptcy Act or any federal or state debtor relief statute, as
amended;
V. Any failure by any prior Lessee to make a disclosure of a hazardous
substance release as required by the California Health and Safety Code, this Lease or otherwise:
vi.
interest in this Lease;
vii.
Lessee;
viii.
curable by each Mortgagee.
Any default under any provision restricting transfers of Lessee's
Any breach of any representation or warranty given by any prior
Any other defaults personal to Lessee and/or not otherwise reasonably
(i) City's Forbearance and Right to Cure Defaults on Leasehold Mortgages.
L Notice. City will give to Mortgagee a copy of each notice or other
communication with respect to any claim that a default exists or is about to exist from City to Lessee
hereunder at the time of giving such notice or communication to Lessee, and City will give to
Mortgagee a copy of each notice of any rejection of this Lease by any trustee in bankruptcy of
Lessee. City will not exercise any right, power or remedy with respect to any Event of Default
hereunder, and no notice to Lessee of any such Event of Default and no termination of this Lease in
connection therewith shall be effective, unless City has given to Mortgagee written notice or a copy
of its notice to Lessee of such Event of Default or any such termination, as the case may be, and an
opportunity to cure or enter into a New Lease, as provided above.Mortgagee's Transferees, Etc. In
the event the leasehold estate hereunder shall be acquired by foreclosure, trustee's sale or deed or
1085816-5 12098M3 26
assignment in lieu of foreclosure of a Mortgage, the purchaser at such sale or the transferee by such
assignment and its successors as holders of the leasehold estate hereunder shall be permitted to make
a transfer to an unaffiliated third party without City's consent, and shall not be not be liable for any
rent, if any, including without limitation ay Additional Rent or other obligations accruing after its or
their subsequent sale or transfer of such leasehold estate and such purchaser or transferee and its
successors shall be entitled to transfer such estate or interest without consent or approval of City;
provided that, the purchaser or transferee or successor as holder of the leasehold estate hereunder
shall be liable for the payment of all rent, if any, becoming due with respect to the period during
which such purchaser, transferee or other successor is the holder of the leasehold estate hereunder.
This Section shall also apply to the rights of a Mortgagee in connection with the entry into a new
lease and to the appointment of a receiver on behalf of a Mortgagee.No Liability of Mortgagee for
Prior Indemnified Acts. A Mortgagee shall not be obligated to assume the liability of Lessee for
any indemnities or damages arising for a period prior to Mortgagee's acquiring the right to
possession of the Property under this Lease.
(k) City Cooperation. City covenants and agrees that it will act and fully
cooperate with Lessee in connection with Lessee's right to grant leasehold mortgages as hereinabove
provided. At the request of Lessee or any proposed or existing Mortgagee, City shall promptly
execute and deliver (i) any documents or instruments reasonably requested to evidence, acknowledge
and/or perfect the rights of Mortgagees as herein provided; and (ii) an estoppel certificate certifying
the status of this Lease and Lessee's interest herein and such matters as are reasonably requested by
Lessee or such Mortgagees. Such estoppel certificate shall include, but not be limited to,
certification by City that (a) this Lease is unmodified and in full force and effect (or, if modified,
state the nature of such modification and certify that this Lease, as so modified, is in full force and
effect), (b) all rents currently due under the Lease have been paid, (c) there are not, to City's
knowledge, any uncured Events of Default on the part of Lessee under the Lease or facts, acts or
omissions which with the giving of notice or passing of time, or both, would constitute an Event of
Default. Any such estoppel certificate may be conclusively relied upon by any proposed or existing
leasehold Mortgagee or assignee of Lessee's interest in this Lease.
(1) Claims. City and Lessee shall deliver to Mortgagee notice of any litigation or
arbitration proceedings between the parties or involving the Property or the Lease. Mortgagee shall
have the right, at its option, to intervene and become a party to any such proceedings. If Mortgagee
elects not to intervene or become a party, City shall deliver to Mortgagee prompt notice of and a
copy of any award, decision or settlement agreement made in connection with any such proceeding.
(m) Further Amendments. City and Lessee shall reasonably consider including
in the Lease by suitable amendment from time to time any provision which may be reasonably
requested by any proposed Mortgagee for the purpose of implementing the mortgagee protection
provisions contained in this Lease and allowing that Mortgagee reasonable means to protect or
preserve the lien of its Mortgage upon the occurrence of a default under the terms of the Lease. City
and Lessee each agree to execute and deliver (and to acknowledge for recording purposes, if
necessary) any agreement required to effect any such amendment which they have approved.
25. MISCELLANEOUS.
1095916.5 12098-003 27
25.1 Governing Law. The laws of the State of California shall govem the interpretation
and enforcement of this Lease.
25.2 Legal Actions. In addition to any other rights or remedies, either party may institute
legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain
any other remedy consistent with the purpose of this Lease. Such legal actions must be instituted in
the Superior Court of Los Angeles County, State of California.
25.3 Acceptance of Service of Process. In the event that any legal action is commenced
by Lessee against City, service of process on City shall be made by personal service upon the City
Clerk of City, or in such other manner as may be provided by law.
In the event that any legal action is commenced by City against Lessee, service of process on
Lessee shall be made by personal service upon Lessee or in such other manner as may be provided
by law, and shall be effective whether made within or without the State of California.
25.4 Attorneys' Fees and Court Costs. In the event that either City or Lessee shall bring
or commence an action to enforce the terms and conditions of this Lease or to obtain damages
against the other party arising from any default under or violation of this Lease, then the prevailing
party shall be entitled to and shall be paid reasonable attorneys' fees and court costs therefor in
addition to whatever other relief such prevailing party may be entitled.
25.5 Inspection of Books And Records. City shall have the right (at Lessee's office,
upon not less than forty-eight (48) hours' notice, and during normal business hours) to inspect and
make copies of the books and records of Lessee pertaining to the Site as pertinent to the purposes of
this Lease.
25.5 Interest. Any amount due City that is not paid when due shall bear interest from the
date such amount becomes due until it is paid. Interest shall be at a rate equal to the lesser of (i) the
discount rate established by the San Francisco office of -the Federal Reserve Bank, plus two percent
(2°fo), on the first day of the month such amount becomes due, and (ii) the maximum rate permitted
by applicable law.
25.7 Notices. All notices, statements, demands, requests, consents, approvals,
authorizations, offers, agreements, appointments or designations hereunder by either party to the
other shall be in writing and shall be given either by (i) personal service, (ii) delivery by reputable
document delivery service such as Federal Express that provides a receipt showing date and time of
delivery, or (iii) mailing in the United States mail, certified or registered mail, return receipt
requested, postage prepaid, and addressed as follows:
To City: City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
Attention: City Administrator
Copy to: City Attorney
Copy to: City Director of Community Services and Water
1085810.5 12098-003 28
To Lessee: 52" a Drive Apartments, L.P.
c/o Meta Housing Corporation
1640 S. Sepulveda Blvd., Suite 425
Los Angeles, CA 90011
Attention: John Huskey
With copy to: Bocarsly, Emden, Cowan Esmail & Arndt, LLP
633 West Fifth Street, 70� Floor
Los Angeles, CA 90071
Attention: Nicole Deddens
With copy to: CHBA Affordable, III
151 Kalmus Drive, Suite J-5
Costa Mesa, California 92626
Attention: Graham Espley-Jones
To Construction Bank of America, N.A.
Lender: Loan Administration Department
Mail Code: #CAO-103-04-04
450 B Street, Suite 450
San Diego, California 92101
Attention: Loan Administration Manager
Loan Number: I l
To Permanent California Community Reinvestment Corporation
Lender: 255 West Broadway, Suite 120
Glendale, CA 91204
Attention: Mary Kaiser, President
To Investor LP: Bank of America, N.A.
MAI -225-02-02
225 Franklin Street
Boston, MA 02110
Attention: Asset Management
To Special LP: Special Limited Partner
Banc of America CDC Special Holding Company, Inc.
MA I -225-02-02
225 Franklin Street
Boston, MA 02110
Attention: Asset Management
or to such other address as either party shall later designate for such purposes by written notice to the
other party. City shall also give copies of such notices to any party in interest under a Permitted
Encumbrance which has requested such notice. Notices shall be deemed effective upon personal
1085810.5 12098.003 29
delivery or within three (3) days after mailing thereof as provided above; provided, however that
refusal to accept delivery after reasonable attempts thereto shall constitute receipt. Any notices
attempted to be delivered to an address from which the receiving party has moved without notice to
the delivering party shall be effective on the third day after the attempted delivery or deposit in the
United States mail.
25.8 Time is of the Essence. Time is of the essence in the performance of the terms and
conditions of this Lease.
25.9 Non -Merger of Fee and Leasehold Estates. If both City's and Lessee's estates in
the Site or the Housing Development or both become vested in the same owner, this Lease shall
nevertheless not be destroyed by application of the doctrine of merger except at the express election
of City and Lessee's Mortgagee. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, shall not work as a merger and shall, at the option of City, terminate all
or any existing tenant leases or subtenancies or may, at the option of City, operate as an assignment
to City of any or all such existing tenant leases or subtenancies.
25.10 Holding Over. The occupancy of the Site after the expiration of the Term of this
Lease shall be construed to be a tenancy from month to month, and all other terms and conditions of
this Lease shall continue in full force and effect.
25.11 Conflict of Interest. No member, official or employee of City shall have any
personal interest, direct or indirect, in this Lease nor shall any such member, official or employee
participate in any decision relating to the Lease which affects his personal interests or the interests of
any limited partnership, partnership or association in which he is directly or indirectly interested.
Lessee warrants that it has not paid or given, and will not pay or give, any third party any money or
other consideration for obtaining this Lease.
25.12 Non -Liability of City and City Officials and Employees. No member, official,
officer, employee, agent, or representative of City shall be personally liable to Lessee, or any
successor in interest, in the event of any default or breach by City or for any amount which may
become due to Lessee or successor or on any obligations under the terms of this Lease.
25.13 Relationship. The relationship between the parties hereto shall at all times be
deemed to be that of landlord and tenant. The parties do not intend nor shall this Lease be deemed to
create a partnership or joint venture. Lessee acknowledges and agrees that neither this Lease nor any
other agreement with City in its proprietary capacity as Lessee shall bind the City in its regulatory
capacity and that nothing contained herein is an agreement of the City as a governmental body
having regulatory jurisdiction of the Site to issue or grant to Lessee any permit, including building,
grading or other land use permits. Lessee shall be required to apply for and obtain all permits
including building, grading and other land use permits needed from the City in its governmental
regulatory capacity, and to comply with all laws, ordinances, rules and regulations of City governing
the construction, use and occupancy of the Housing Complex.
25.14 Waivers and Amendments. All waivers of the provisions of this Lease must be in
writing and signed by the appropriate authorities of City or Lessee. The waiver by City of any
1085816.5 1 "98-003 30
breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition, or any subsequent breach of the same or any other term, covenant
or condition herein contained. The subsequent acceptance of rent hereunder by City shall not be
deemed to be a waiver of any preceding breach of Lessee of any term, covenant or condition of this
Lease, regardless of City's knowledge of such preceding breach at the time of acceptance of such
rent. Failure on the part of City to require or exact full and complete compliance with any of the
covenants or conditions of this Lease shall not be construed as in any manner changing the terms
hereof and shall not prevent City from enforcing any provision hereof. All amendments hereto must
be in writing and signed by the appropriate authorities of City and Lessee. The Lessee's mortgagee
permitted by this Lease shall not be bound by any waiver or amendment to this Lease without
Lessee's mortgagee giving its prior written consent.
25.15 Relationship with DDA. None of the terms, covenants or conditions agreed upon in
writing in the DDA and other instruments between the parties to this Lease with respect to
obligations to be performed, kept or observed by Lessee or City in respect to the Site or any part
thereof, shall be deemed to be merged with this Lease. Upon the occurrence of each of the
following; (a) City's issuance of a Final Certificate of Occupancy for the Housing Development, and
(b) the City's determination that the construction of the Housing Development has been completed in
accordance with the requirements of the DDA, and (c) Lessee certifies to the City that it is in
compliance with the requirements of Section 310 of the DDA, then the DDA shall thereupon be
terminated and of no further force or effect. Upon the request of Lessee, City shall execute and
deliver to Lessee a termination agreement or a written certification that the DDA has been
terminated in accordance with the requirements of this section.
25.16 Entire Agreement; Duplicate Originals; Counterparts. This Lease sets forth the
entire understanding of the parties with respect to Lessee's ground lease of the Site. This Lease is
executed in three (3) duplicate originals and counterparts, each of which is deemed to be an original.
This Lease includes five exhibits, Exhibits A, B, C, D and E.
25.17 Severability. If any provision of this Lease or the application thereof to any person
or circumstances shall be invalid or unenforceable to any extent, the remainder of this Lease and the
application of such provisions to other persons or circumstances shall not be affected thereby and
shall be enforceable to the greatest extent permitted by law.
25.18 Terminology. All personal pronouns used in this Lease, whether used in the
masculine, feminine, or neuter gender, shall include all other genders; the singular shall include the
plural, and vice versa. Titles of sections are for convenience only, and neither limit nor amplify the
provisions of the Lease itself. Except for terms expressly defined in this Lease, all terms shall have
the same meaning as set forth in the DDA.
25.19 Recordation. A short form memorandum of this Lease, in the form attached hereto
as Exhibit "C", shall be recorded at or within five (5) working days after the time the Lease is
executed.
25.20 Binding Effect. This Lease, and the terms, provisions, promises, covenants and
conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their
1085816.5 1209"3 31
respective heirs, legal representatives, successors and assigns.
25.21 Estoppel Certificate. Each of the parties shall at any time and from time to time
upon not less than twenty (20) days' prior notice by the other, execute, acknowledge and deliver to
such other party a statement in writing certifying that this Lease is unmodified and is in full force
and effect (or if there shall have been modifications that this Lease is in full force and effect as
modified and stating the modifications), and the dates to which the rent has been paid, and stating
whether or not to the best knowledge of the signer of such certificate such other party is in default in
performing or observing any provision of this Lease, and, if in default, specifying each such default
of which the signer may have knowledge, and such other matters as such other party may reasonably
request, it being intended that any such statement delivered by Lessee may be relied upon by City or
any successor in interest to City or any prospective mortgagee or encumbrancer thereof, and it being
further intended that any such statement delivered by City may be relied upon by any prospective
assignee of Lessee's interest in this Lease or any prospective mortgagee or encumbrancer thereof.
Reliance on any such certificate may not extend to any default as to which the signer of the
certificate shall have had no actual knowledge.
25.22 Force Majeure. In addition to specific provisions of this Lease, performance by
either party hereunder shall not be deemed to be in Default, and all performance and other dates
specified in this Lease shall be extended, where delays or Defaults are due to causes beyond the
control or without the fault of the party claiming an extension of time to perform, which may include
the following: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of
God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of
transportation; governmental restrictions or priority; unusually severe weather; acts or omissions of
the other party; or acts or failures to act of the City or any other public or governmental agency or
entity (other than the acts or failures to act of City which shall not excuse performance by City).
Notwithstanding anything to the contrary in this Lease, an extension of time for any such cause shall
be for the period of the enforced delay and shall commence to run from the time of the
commencement of the cause, if notice by the party claiming such extension is sent to the other party
within thirty (30) days of the commencement of the cause. Times of performance under this Lease
may also be extended in writing by the mutual agreement of City and Lessee.
25.23 Quiet Enjoyment City does hereby covenant, promise and agree to and with Lessee
that Lessee, for so long as Lessee is not in default hereof, shall and may at all times peaceably and
quietly have, hold, use, occupy and possess the Site throughout the Term.
25.24 City Approvals and Actions. Whenever a reference is made herein to an action or
approval to be undertaken by City, the City Administrator or his or her designee is authorized to act
on behalf of City unless specifically provided otherwise or the law otherwise requires.
1085816.5 1209"3 32
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by their
lawfully authorized officers.
ATTEST:
- / <1�1 �"�
City Cl , lac p,,ky , f�.rc 1 "
APPROVED AS TO FORM:
n fAy y . 5rv+f- f} t+e '
& Girard,
Counsel to City
CITY:
CITY OF VERNON, a California charter city and
municipal corporation
10858165 120%-003 33
LESSEE:
52ND DRIVE APARTMENTS, L.P.,
a California limited partnership
By: CHBA Affordable III, LLC,
a California limited liability company,
its Managing General Partner
By: Community Home Builders and
Associates, a California nonprofit
public benefit corporation, its sole
member and manager
By _
Gra am P. Esple one
President
By: 52nd Drive Apartments LLC,
a California limited liability company,
its Administrative General Partner
By:
Kasey Burke
Vice President
1095816.5 1209P)03 34
EXHIBIT A
SITE MAP
tTo be provided]
10858 W5 12098-003 A-1
EXMBIT B
SITE DESCRIPTION
That real property located in the City of Vernon, County of Los Angeles, State of California,
described as follows:
Lot Nos. 45 through 53 inclusive of Tract No. 7923, as per Map recorded in Book 113, Pages 80 to
83 inclusive of Maps, in the Office of the County Recorder of said County.
APN: 6314-002-900 (portion)
1085816.5 12098-003 B-1
EXHIBIT C
MEMORANDUM OF LEASE
[To Be Attached]
1035816.5 12098-043 C-1
EXHIBIT D
PROPERTY SITE MANAGEMENT PLAN
[To Be Inserted]
D-1
MANAGEMENT PLAN
52"d DrWq Ap�rtmtltnb
Vernon. Cttff�rrtia
A. Role and rapoe sWilly of fife Owner andlor daisgtia i, of m*wlly io the n iraprrnent agent.
1. Scope of Rm**n lbfp o& The mq)w ve nap es of 52i0 Drive Aparinaer>ta, (the Vw en
and Solari EnterprIses, Inm (ft 'AWO an deacrt o In Ufa kilmnagement Agraarnvret. Pis
lAvogemertt Plan pee TWO Is lnoarporadd by rVasrtcs in to the M nagunent Agreerrtart. This
Plan does not st;aersede the Agreement. the tons of the Agreenawtt uVersede any terms of this
Plan M f m are any cordradclory provisions, whN the terms of this Plan PAMo rent the ier a of the
Agreement 1 arty pmv►►bbm in the Plan are not expkllly bx*K d In dta Agreement.
The Plan is also a regtarement of the DlepoMm and Developereent Agrommit, Ground Lease and
5�between the yd Aperineeis required to be martepedin accordance Ya dtls Plan.
The Agent wll need prior approval from the Owner before feidrtg salon as noted below:
a) Lolling of any large coreteGs wick ate erderbr pairtmtp, remodel ft elm
b) Disbursements in excess of $3,000 for tabor and or materiels mquked to maintain ttts development.
The Agent Haut naaite wary eW to twp dWbLrmnerft wlthlrt the guidelines of the prcjwW
budget annauntte.
2. Change In llertagsrnent Agent. The Owner maintains a let of property enisreageffient agenle who
have tt» experience and Cape* to rneutags the site and who are expWWnoed in pubbdy supported
adfortlable hoaskp prale ale
The Managernent Agreerent provides that the A""rel may be larmhated by mutual cortsertt of the
Owner or the Agent watt ** (00) days wrMsn rtofics.
tf Ow Agent chertgss WW oomVency, the Owner sttdi lmmedat* seek and conlrac t for services with
another agent. The Owner and ftte Agent shah abide by the procedures ou0ned in flee Martagentem
Agreement. The Owner shall be responsible for providing the new AM* with the scope of
i mW WWm lor on-9*9
The City is ert*W to reasonably approve dmmgea to the Agent.
52" � Drive Apartments — ManaQe"M Pin Pape 1 of 12
& Personnel Potty and aw" ArellnOenMMs.
i. Job Tbba and Rseponebbtriea. The blowklg personnel will be irwolved kl the awnagwnw t of twe
pro".
aj Hl tQd�00�OG D*mW )ob melon appears in Exhbb.
bj gmum DOMMS D*MW lob descrlplim appears in Exhlalls.
cj EMMU Manetar: DOW10d job cl aw"m appears In Exhibits.
dj ;, Detailed job descroon appears in EWAAL
d reaid iris the Be Ap�olroft or WW odw regislarwd volars, or issids ds d
respect to any i two s which require die approval of the Cky or ttw slaclaale d the City.
2. Wo P Neil.
a) LIlinknum lob gwWW@ ions for each posillon am detained in to job dewipllorn In Ex 0*L
bj Interested appicarMs may the Wriage nant Agant's Home Office to eat01sh a *m to
cane b and oanplets an oppballm AnappHtwnt wtw bs requked b canpieta a wrtNon appMoatbn
and take a d" teat. %ft Waft erd an oral k tervk w may also be m**@d. TAe Agent will
krbnrrl each appkw t N they were aooeplad or the rmin dad for an anpbynwd oppordrnity.
cj Ail *wft are cmmlrl r+sd for pm Min , and erepbyaes we treaded during their emptoynwnt WMVt*
m"d la r. n dklon �tlandcI$ All hkkr0 d 1persdmel and creed,
00ndorm to Eque l or
mpWprmR �
p Is the boot of the Agsnt to oompiy with then hove and morn, as appfkabie, oonoernkrp fir
ernpimimenl and aHkmative acdm The Agent will work wNh the Owns' to ackely recruit WoOlsd
nmorty c mdMas for all jobs. specW etbrls will be made to provide k0ormatton roger" job
bulstkr boards. nrmpapers, and other ccmm_unlcationa media hkkrg m@Wrials wq lrKft a Mrst
Me Agent is an Equal Oppoft* Snployer
Stan wM reoetve canpr*wi*e training by the Management. In addion. the Repiorlai Manapar WIN
provide mxmvtratsd bab* to parsaxrsl on a regular teats during the ells vbb. Traklkrg of all
an wVoN
bmW In addW% to AQ Will k b afalf in wrMV at dvwVea in matrapant M pdtdes and
wou� b relevant asimmQuimm t almwafuhops spa-med by various properly management
assodagona and agancfes for the purpose of upda ft and rernwkp work-retded slot.
5e Drive Apwtmwft - Me mpwwnt plan Pops 2 of 12
4. Empio40awN of Rssidanb
The Agerd may fW ply to w~ miderrim of 52"0 Drive ApeuYrtertla and then to meatbers of the
IoW cwmm* in hhV of pro" personwl, and wi make avabbis to the resident ail Pertinent
Intormelon, such as quaNkslona, ramuneraslon, appdcadon procedures, W.
Deperft upon the gmploy rmit PoeWOn, uric rant nuy be dtecled by erttpivymsrd. A rshd Is adjured,
such adjustment shaA be ktduded as pert of the empbyees oontpwadion and shall be 9sWbAehed as
such In a venters work agrrerrtertt between the Aged and the artrploy".
C. Ilan for MdrdatrthtQ Adaqude Accouantfrp Rpo ds and Homo iiscesamry Forme and Vouchers
1. Pro f eon Aoortm" 88eis.
Fkhartdd scoourdng, reports, and records shall be in coMorrrmrtoe wNh standard aoorud basis
acoounMng procedures, and shall be responsive to tte gnideArtea provided by this mguialory agsncCies
oortrtsoted *0 the project.
The Agent NtaM maMttalrt AN accaxdUhg rtscorrds on a WMPUter "SUM at the tad oir" location.
Placards d rent cdWctbn and all fln idol kansaafto wM be tralm-0 Md to Ill MOM Oft* and input
M the =Winer system where a gwwd "W cash moetpts and dlaburserrtents records will be
N n*AWy 0 doctirnwo wM be nomplaled In cor*axdon with to Owner and all be based
upon the requirements of the reguklory agendas. At a mktlmu n% the Owner shall receive rnmtthtdr
reports pdo :
a) Casts Status report kwkxk p cash receipts, dieburom srds all ►eo$Wabies.
b) list of socourb payable.
c) Comparisons of acWaf versus budpalsd ope a*q ooew as well an comparisons with the operating
costs in the prrAmn year.
d) Vacancy report.
2. OF Bit rrp OMburrserrrsrrls
Dwburnma from to opwalkq aoco mt shah be made as demabed In Paragraph 13 of the
Manspnwt Agreentsrtt. Oils wAi be paid and accounts Y A be funded pursuant to the mqukwrW es of
theproject's AAmnepsrrtard Agrrenterts and loan Agreement. Spsc0cm% :
a) A purchase order system will be ulttlzed m cborsnent most project expenses wAh due axcepdon of
liana and servkes provided on a regLMw coWadusl basis (ttdlkiea, trash removes, service
con3recs W.).
b) Purchase order oopbs will be mmcW to kwoimes and approved by the property rmanAger Prior to
prpnwt Paymsrda will be processed semi- r"My.
c) The Agertt wWor Owrwr shays mairttdn the fallowing separals accounts:
The Agent Simi maintain an operalktp a=m* for rend collection and
pwrwht of the projec ft operadnp eg m ses.
5+ Drive Apwgnwft — Mougoment Plan Fags 3 of 12
The Agent shall mwdWn I» opwa*V reserve scomat. This account
will be Minded w required by Sm lenders and Mwestors lo der project In the amount
"WAsiad in Its reptrtatory ag swmntts. Subeegtel deposits to Itis socowtt will be made in
antouarts as ,pealed In the minnually approved uperatlnp budpsts. Funds may be frarshrrsd from
>tfs account ody to oow+sr adual aPo ld ig expwsss In Alicia of the approved budpM emowtt. or
to oanpersats for vacancy and tad debt losses In tw approved budget amount. Prior approval
Hurst be obtained begs wlittdrswd of funds.
This woarrt w4 be funded ttxouptt regular contributions from to
Oper" account. The MW corarbuticn to Itis socount vA be dstemwted by to lenders and
rnvedom tc Its pmjsd In anourd astablidad in the regulatory agresmertb. The amount of funds
will be bated on &SdpaMd cWN kWmvantwft gojsd uppradn0. and moacernertt bans that
Ow praim M phydoal assets M require. Prior approval must be obtained before witttdrawel of
funds.
Securav Deeod L The Agent will maintain a Security Deposit Account. The wcmj tt sW be
' opwmft a000urt. (See Section 5 for addtlortat k* mWm on the $scurvy
3. Coat control
Fq m i ms In eases of $3,000 require the Owner's spscMc approval eeospt for amwgency repWm
where 00 Agent will oonwrt mk*e with the owns as soon as powW. Pwdtaee no ommim in excess
d $2,000 must be put out for 3tres bids.
AN report and somift M**VMU dW be gwmnW by Me Mwqpnwt AW*wneM
4. vac■rncy end Rut toss Memonls
At oudkted in Is h4mugernerg Agreenrent, Its Agent shall prepare, as pat of the monitdy spati b
Its Owner. an irtooraNNettpwOf statrrnerk and a rent roll showing scluduled and actual rants wNh a tst
of rsoldertt deifitqus mlw DellrtqumM ,Wm shall kxbcsae wttedter residertts are 30, 60. or 90 days
'hill nd rt heir rent.
L 90=ffW DqMft
Seousvy deposits will be collected in an a nourtt equal to ors (1 ) rmtt ft reM The Agent shell esMkh
an rtim beaft accowtt for Seourvy Deposits.
The amount of any doduaaforts from Is aMNW deposit will be determined by Its AgWe Property
Manager under Wands m estabvdW by the Agent cod approved by the Owner. SmaNty deposits may
be used to pay for rpider I-cawe0 dwnags& lost keys or garage door remote Cargo* deiktguw t rent,
tete fees, legal fees and any other rsasorsbfe swense caused ding as a Haut of a rwidwa
actions. Ono dwpss are made agWA a msld wft ,scarily deposl, a rasidsrtt shah be wasid to a
rst nd of a samily deposll. I r arem shall be inc kided in such refund to ills eodsna required eo by any
applicsbte taw. SscurNy deposit rMunds null be nailed to a former resident wi tt 21 days of departure.
Any accrued rsei on ssmw* depoags Vint is not mp*ed by tell► b be refixtded will be made
avarlab a for operations and n"Wm related to the project,
Sewrvy deposits shall be malMairted in a *operas acoourtt from be operatktp and reserve accounts.
Sectmey deposits shalt be show as Nalftes on all project reports, and not lnekxkd as income.
S00+ Aparrne tr - Mwwpn*M Pert Pape 4 of 12
Upon vac oMV a ux* the Agog shelf inspect the deperthtq reskiert's unit b determine whether the
resident haxshold caused any damages while they oxupled the unit. The khspeaft form prim to
mov" shd be used as the barb of comparbon. to the evert that there are resident -caned
dwna^ Me Agw1t shah prepare within 21 days d to vac ale da* an estknale of fhe coat of rapdit
the damages and provide the estimate 10 the nekfer>L within 21 days of deperWrs, the Agent shd
make the necessary repairs and send the faxraer resident an kWnind flat of repair costa (N any), and
kxedt the secwlly depoeN ag" the cost of repaks. The former resident shah be cent a check tar the
baianw of tie semAy deposit. lf any. Should the repair coals exceed the amount d tw security
depoalt. and then the former reNd M TA be serif an invoice for to ehkomm" oat d the repairs_ Alf
documenobw shah be makhtakW in the farmer resident's Me.
D. Manapearherat Pfau Upddn
The k4anepernent Plan Mall to updated on the followkp ooceslorm:
a) Charge or nodifIcatiam of 52nd Drive ApsrUnv ' management puldolirmw which will be rsvievued
annually.
b) Alteration of 52nd Drive AparMwW std*V that neceukatoe operating praoed"revisions.
L Property and WbMtV Insurance
The Owner shaft arrange for the Project to be blamed agak»1 toss by firs and such other innards.
casualtee, teblibm and contingences, and In each arnourrb and for such periods as required by the
"MUM" 81110110cift
L OCCUPANCY
A. Usk eresiodmn
52nd Drive Apartments will have 44 residerM units comprised d 1, 2 and 3 bedroom units ssrvkq
households within 30% - 55% Area Median Cross koarhe f evelt. There willefao be l nlanagenrer+l unit.
All applfcafto reoslved will be reviewed for all program regtriremerhls and esgibtlity rsarbrlatlorla.
IL Ma k@" Pkv and Procedures
1. AfH MWW PIM and Prooedurss
The Apm will be resporrslbie for mar m*v and ieaskp the writs. The rental omos wW be iocated on
sire and the Owner will supply all of the necessary office fwnkm (dWK tit cabbist, chairs. No.) and
equfpnlent (typewriter, computer, printer calculdw eta.).
Units shah be marketed in smordance with Aftirrnetiw Fair How" marke" puidelirmw Air
advertleing for 52nd Drin Apartment shall k ckrds prominent use of Equal Hou&V Opporturlky lo^
sbgarhe andlor matemerft of hu nt to affirmailvely market ft units.
Outreach to the community Will specifically be ftwo newspapers, local govemmerrt agencies such an
the City of Vernon, Housing Authority d fhe County of Los Angeles, Co mnity Organisallm and
otemst lunge. The outreach will be ckywido and reach a diverse racial, oft* and eow omit mix.
520 Drive Apanmen4 — Manag im Man Pegs 5 0112
2. Pt"IdetK Sdoc r m
The inittd rent -up shall be conducted by flee Agents personnel and supervised by one agent. The Agent
shall utilize sag members !hat are well trained In ellgblity requirernerts, beolly compoom criteria,
unit size selection processes, and Owner approved selection criteria. The resident selecaion process
shall be InplemMated in a manner which prevents Woritlsm and outside intlueno m d any kind in ft
selection of residents. The following Is a sunnmary of resident selection procedure, uslnq a lo"
systn:
a) An interest list will be orseted st the time of 52 a Drive Apartnrent's groundbreaking.
b) -Appleadons and an nfomatbn papa, regarding the apartments and the loc adon d the urpcon,"
lottery.
of Ocape will be ammiled
to all
households on the Merest bet approArnat* 180 days prior to the
lo
c) A deadline. approdma" 130 days prior the Certincsls of Ocoupancy date, will be sat for
cornpleted app1r, to be gabnillsd to Soler! Enterprises, no. In order to be Included in the
lottery.
d) Onfy ens appkkatlon parhotuetroiciwit be entered iraothe btiory drawing. Late, inoompiete,
dupkate and Inside appli ca*w s will not be er"rsd into the lottery drawing.
9) The btlery will be held, approodmataky 125 days prior to the Csutkficale d Ocwpennay data at a
apace In the City of VsrnWs City MA allowing acosss to those interested in attending.
t) AN appticaliorn will be placed Into Individual envelopes. AN appYcelons with a preference we be
Owed Into a container, mixed and pulled one at a Wm, in random order. After all of Uu
applicadm with a preference have been drawn, al applications without a preference will be placed
ktb a oontahsr, mbced and pulled one at a tkrn. in random order. (Applicants will root be pro.
screened prior to flee lo" Process).
g) As each appiicallon is pukd-t will be marked in nu wri al order, Intdlcalkg the btwy mxFd er.
h) A pndMara shell be provided for aN apploants who are mployed or residing In the City of Vernon
or within a 1 mile mdus d the devebprroerrt ails as nneasure l Iron Iles career of to site.
1) AN applicants will be naiad a letter notllykg than to lottery took place, inform them of "irr tottery
number and of !heir protsrenq. N applicable. The letter will also state that a lottery number does not
gummentse admission or dental to the comrmunNy.
Appraftelmly
20 dap
1) to applicants. Typpiceft wepproccr10 � 3 — gVkwrls unh *4 re" in 1 will
Miars
being mailed mM.
k) in" Mervbws will be held at whbh time the apple ants will begin the etipibft process, knduxkV
authorb*q the roMeae of lrftmallon, via Mold -perry varlflcation forrns related to incorrus, assets,
student stafus and background &halt data.
Ij Upon delen ninallon of eifpibiNty. the a elm t will be offered residency, placed on tts waging Nat or
denied. 11s waiting list will be updated on a regular basis (every six months). Appticanis on the
waiting fist will be required to ca toot the manager (n writing) at beat every a mmft In order to
amain on the web Nst.
5e DrIm ApWWAMrs — kWMgM W9 Plan Pape 6 of 12
m) Any gWVW applicants not able to mow In will be placed on a malting list and shall receive a letter
Inform" them of Vm* "A
n) in determinkig whetw to select an applicant for occupancy, Agent shall apply the saute reasonable
and objective standards and aiterle that it apples In iknNr aflcrdeble apartment developrnents that
it ma nags, and the prevll kV standards and aderla for the management of aflordabie spartrnent
drmkprm* In Los Apples County. Residents shall not be selected or rejected based upon
outside IrMuenaes or favoritism of any kind.
o) Those applicants not selected for oocupancy shell be provided with written nodficagon sUft the
reasons for ltreir kteNgtOty. Such reasons mWA Include but an not thrAW to the folovrkp: over
income, Irmillcient 1rxmme (ktablUy to pay the rent). and bed credit history (delinquent or unabiat to
pay on aocoants, any judgments, or We payrmft aWao applicant is allowed to explain
reasons). Those applicants rejected for residency $hall- be provided with an opportunity to appeal.
The appeal prooesa shall allow for the alq*wtt to pawkie stapplams M fNomodon to the
applicaMon kxkx*g addloond ftd party vwffbadm a rOw teellmony.
p) The Agent shall attempt to oontaot tttoa houwtxft that haw been on the wailkV fief for the
longest pwW of time, 0 a ftxd otd cannot be contacted after ClOwnentpd attempts, fhe Agent
shah interview the elgibb househokfe that responded to contact:, with prolvei bairn given to
those houeeftofds that have been on the we" list tit lorpaaa. The interview ahal include not
only those Hems listed on the Inlsrvfew Ch ckW but shalt eaapialn mangers t practilom and
paid kwL Proepective residerds will be Wormed that cot hued irmoms e1gMl" and arw"
income mmtipcatlott will be required as a an fitlon of oop Vw y. AppMcartts who arm deemed
suitable for occuparcy shall have to opportrnity to inspect the unit to be rented, dull sign an
inspectim form and a rental agreernent, and shall pay the seonxfty deposit.
g) Applicants w1M then be saxesned in nunW§c order of fit0 olgbllity Iiet, subject to any preferermas
herein staied. Io datmrmkm it they comply wNh the smoration ci"a 6 l to lease a un L If they most gte
eaesnkp and selection afterla they will be oft a unit.
Note - a lottery will be held each year, approximately 30 days prior to tits ennNmersary date d to data,
the certillum of ooaapsir y is issued In slrnMar mariner as provided above. The eNpbllky in In place at
Me time a unit bsoomes vacant will be the Met the wit be used to screen for an applicant to teas the
vacant unit. Than apploants on the cu►rett 91110 ty Twt will be asked to rembn* an atpplicxtiort 60
days prior to tits red lottery. Those applicants and arty new appimft who have admitted
applications prior to Ute doddery date wtN be placed in the Mary. The purpose of the annual lottery is to
provide an equal opportunity to a new applicant to gain a unit In the butfkfkp and 10 keep the interest list
current with appMcents kttereded In being a potential resident of the buMdk%
3. The Cfly of VnnIM
The Idtery process and documentation will be made wailsbie to representaMs of the City of Vernon
for sudlL The City of Vernon will oor>taat Soirt Enterprises, Inc. In writing to delermtine a mutually
agreeable date and time for the City to review the process.
4. Appmnh Prowas
Applicant's that do not meet the Resident Selection Crkwia will recom a Letter of Ineligibility.
Appi wit have the right to make a written mquest to Solarl Enterprises, Inc. within 14 days of receipt
of the letter to request a msetkp to dlscws their WaNgb ft status. Solari Enterprises, Irtc. vA review
the appeals iMvrmatbn and provide a written response witl>kt 5 days of the appeals mestkp.
tf. Pne40WPKM OrhrAMtlon
5e [hive APNWW>ts - Marmgemeat Plea Page 7 of 12
A pe-ocaupang orientaOon program ws be povlled for appito8F" durhp the kdervlew Process• n
aoppkw* are wogp ed. d Ow orne of Ow execution of the lem and paymat of sewity deposit. the
Owner and Agent ehadl re•orfent the households on the project. The ortentaOon shall Include a full and
dewed revlew of the project house rules, and will also Include a que ft end answer Period during
wMch the residents can beconns wgw**Pd w1h each odwr as well as to Owrwr and Ore Apart.
C. iNvoodurn for DslefmalrMng Rseldertt B b>fi and for Cord *q and Mwmm fy R@cwW Mq
Houaehald k no I and on
1. fRttlal A Iffide!
Steps to delwftm WW blooms elrgbilly are described in SeciW ilabove.
2. Annual IbsidefK RvartiticaOoa
Each household will be Wormed dutkp Ow Wwvivw and OrISId w process Of the mWkwnent to
have household Inoorns and oompoeftlon re-osrtiNed annuu*.
Annual keervlews wNh each household will be scheduled according to a recerIfIcation schedule
adWAshW by Ow Apart. Every calendar year every household must be re-esrtined. The re-
certliiWm procedure will begin 120 days prior 10 to nqt W tkne of cornpietbfu. The full w
cerstallon process will be aknost Identioal to the k W cmVicallon squired d mow b ftw
Househ *b deterrnkwd to s>soesd tfw ttxor; Will sift dme d their armuml recwftatb n, wd kn dw
the Nod Avalable Unk RWs, as deeignated by Sec bn 42 of the M Code.
8. Resldead Oacupaicy standard.
a) Pets No pets are allowed in 52nd Drk a Apw wrnts.
b) Pern*Wo Absences: Reek* t UPASe are mqulrod b occupy 52nd Drive ApaMrake s their
prkrnary place of rseidenoe. Absences bvywW 45 days will be p- All for amorgenW purposes
only, as"as rental paymants are ksp1 oumem durkV the absents Raquuesb for absernovs mot
be submitted to on Agent in moo *AV Ow reasons for On absenm ft dales of Ow expected
absence, and arty odor frawhi dncwrnrfanoss that mipht AM the Aoonft elm A In about the
approprid room of Ow absence. The resident will be noOW in wrOV d the dwWw.
c) Resident ineapadty: in Oa every Oct a resident appears to be kncapadMW so us to malts a #
care dQcult, the Agent will InrwdM* courted relmllm or WM a tact referral agenda 10 assist
the resideft in ttw every that One resident becomes so Ind us to be unwbfe to care for
hi neeNRnasvM, ttw County G ardlwft Office may be cm tac W b delern*w what tacby the
resident should be transferred to.
d) Uve-In Attendants: Residents vdh dfeabOm severo enough to require Nw4 n attendant shell be
required to present wriden coNtabon from M * physician that their deabYhtfee require Nve-M care.
in last event, the unit must be large aouph to a000mmodate the attendant wowdirp b pubbW
ocet"icy MndwdL
1). Rena Coriectlon Polities and Proseduros
Se Odw Apw"w is - Mansaw wrt Plan • Pap 8 of 12
1. Rent Cal uladons shred CONirdbns
The Owner shell agree to t» rent for each unit at the time of teas up In aMnce. The prospective
meideM houssthoid shah be informed of the rent prior 10 eooeaoting a tease, AmL d real Uhcxeases, It
any, shad be approved to approval. Reeidents shall be Informod of any rent khoresa w d Isest
30 days prior to their 2 Ownwtalb
Rani collection proveduraa are detract in Paragraph 0 of the MwApsmerrt Agreement. Typkx*, rwhts
shed be d*mgd to the Property Msr"w. The Property Mane W " provkls the resident with a
MOW and enter Ow umjM pekd into the monthly reel receipt puma. Rera shad be collected by the
Agent and deposed Into the operattnp acoa►M.
AN rent shell be due on or before the ku workkhp day of each nxx*L Rent Is considered ds4xWd
on the ssoord wortdnp dsy d the month. Rents must be paid by cas! 1 e cheat or nawy order. ' No
cash will be aooeplsd.
Z. bettors for Late Peak
Rssidsrn who have not paid their rent by do second wvr" day of ti» month will be "rued a Notice
b Pay Rent or OA
Falhore to pay rent will result in eviction. The Agent may co WA with t» Owner prior to k ' V arry
"d moon agog 1 wq residents. The Agent Oct provkke the atorney with coplae of all doanwft
and request that an eviction be scheduled with the court. Evictor► proceectrgs must follow procedures
outlined in the CaNfomh Cid Cods. The howehdd will be ahwgWIlor the cost of arty legal ad" In
Owner mews due to the actions of the hour hold.
3. Patlai Rini Payrnena
PaMd rent paymeMs will not be soc»pw uniea Mmoft wargements with the Agent are made in
&&vanes of the tme when rent is due. Real Is due In kill on the WO worts dap of each month.
4. ftsowm y of Ows" a in Exwes of SewA*y Dgmw t
The kill amount d beck rent and damap w vA aril be established khtormally and then fom My in a
he
courft Xwwrw t�� damages sw0cant end t o ruidats khcorne damages
m*wd � a
collection agency may be wntwtsd to secure the lodgment.
t" Procedures for Apped end Gfhnwhce
Se DrIa Apwtrnerns - Managee»nt Plan Page 9 d 12
1. Eviction Procedure
fiesidenta 00 have violaded their fee" or other reguMOM *4 be gh"" written wan*W Of the
Aokhtions. WxmAd the violation corgnuo, the Agent would Inform the Owner that they "" to Wrists
evkdion procadutes.
Evictions for nonpayrtmnt of rent are described In Section lt.0 (2) above. Evk rim for nuisance shell be
mmdatd en when toe is docurasrtble evidence (coramonderhae, witnesses of Magill advalss,
poke solons, leave vWWgona, sic.) avaAabls that the Agent and the apom" may delmirA to be
wkwWft in court. Court wit m wicafy require sbt to On weeds for a decision. Fully conlestsd
evictions can take longer, and urtaonfeetsd evlctiorhs, dips id, rp upon the wnridosd of the court at the
One, may tales $W* teas *M.
No remq wdl be cdWcted durim any evicfbn for majoynaard aalom ff a is old, 1 who It 1n the
process of bokhg evicled for nonpayment of rent desires b pay to rent in fu#, den the Property
Manager shWl confer wMh !n Agent fo dsM.,* whether Writwillbe scospted. M rend le acc epltd, the
residsrx will be required do pay with morr.y order or a cethla's check ordy. b It Is dsWn*wd that the
resident Is dNarric* We or has a swim ronpaymmt pnobiem, than ft Ago t has ties gAion of
tang the we and corOxAM with the eviction if ris dn*w specified in tits Pay flit or Ciuit
WON has ah+eady •fap"d.
2. Plamo np Resident C*nWbbft
There an oocssions when prCltisnrs may art" and it is very knporm that ties problems are
dscumed hnneda" and resoi, before they have a drum» to become serious. A problem should
Brat be taken to the Properly MerapK. k the ftWW Manager does not resolve It, to resident should
VW oontad the Reglonr Manager. I( the pnobism Is not reaoived at tiros level, ft retfderR may subahit
in writing hddher complaint to the rm* posilim of authority, ~ is ire Moe-Prssift i COO for the
manmom resr m firm. Complaklts can be rrhaMad or hand ddlver d to the Apart and can be signed or
3. RLdn viviadiorte
Residence who vbhft lees aprosmsrat, the W*ors home rules„ s hd always be notified in w kft
with a request to cm. or remedy the violation. Dupticob records will be Red In the resident's ft,
wlM arty relapmems ff the ssm oroilier L'IdI eon oaks or continues, then the rseldent will be advised
in wMV that cored violations may rseull In rAdkx . M Ow 96 month, the Pvc@Wm do fbed
in section E (1) above for mawms violations wMi be Initialed.
F. Pkm for 1t0 m el q iMbon
1. House dries
Mcmhss rinks and reguWlorn are an attedwrm t to the Standard Lease Agreement. These Y A be
reviewed with fie reeklm at the tkne of the kh W k t -Am and during orierltakn prior IOmove in.
2. AM managanert sW wO be trakhed In enwgwW procedures and two wh7 be regularly scheduled fire
deft a wasally. in addit% an emsrWM procedure sheet whet be dtvetoped by the Agat and will be
provided to at rasldsr'a upon move in. This sheet wig dsafe procedures to be foNovwd in the event
of fire. earthquake, or other me# ooasrrs m requkkp emergency actlon on ft part of manage mm
staff or residerrlt. Periodic resident meetings wMl be held to keep rsskW* ac*mk ted with emssgency
520' Dries Apartno t — Mwwgeffm t Plan Paps 10 of 12
A. kkm*tkwtion and PA** Of CMdoudion Deals
The pupa erchl d and the Owners rep user tdHa wil Waped Ate project durtnq wars oorairuction
process to wrun that no corairuction defects an mbsed. If defects an Wur4 the contactor Shd be
knrnec d* noWled of the defects. Progress paymmuts wM not be sutoW for panne A anises
un=XWJ nal Men releases are attached to the contactor s n pjssL The nafice of =npbVm vnill not be
recorded N ftm are SOMO nM defects present. Ftnsfly, ate cxx*S"s reterOm wil not be paid uxgA all
punch -Pet ins are cort�ecbd.
if after Owner noWIcaWn, I* contactor tams to oorrssot defects within a reaeonslAo pwbd of dme, Mten the
ovmw shell ktiorrtu the oomraobr that k wlil dbbunee hrxts from the reterutbn in onler to cxus the detect
The owner shd constrll vdM Its altomeys bdo mi tng out this ac*oru.
Ile. k1sagicatloo d MaNtlwuaooe WAR
AM mWW* Jan wW work w1l be completed by the on -she person wnpfoyed by the Agent. Any K*q) menmi
or extraordinary jan*wW work that is nmp*od vN either be ca*=W ocd to a prMa W OmW Arm or
ur4ortaken by an emgoyee of d» Agent and bAied to the Prgsct as an addNkmW expense. Maktts wm
work wg aka be done by an enpl" of the Agar t and bid b the project Der contracted out to an outskle
cor fraotor. Outside contractors wM gene * be used for emergencies, unusual or speclaNzed repsh, and
The AgwR, acacor S g to Paragraph 10 of the Mwvq@n V Agreement, shah contract for work requhV a
11comed contractor such as major plumbing, eivaticai, or mo&m ical work-
C. Prevowwo Mtitlsnanot! Schabib
A prevsrmrtiva nwk* ncs schedule wrl be prepared and-updoted by the Agent. The Agwtt VWI contract
out for exter,NkW on and pest am* services. timed mvtn wO be perfomnd once a month and for
it m*4duat traits on an as needed bash.
The erAsAw and inlwkw d 9w bul ft will be petaled every Ave yeah or as needed. AN squipment wN be
mat taped based upon the kx bidcuW equipment gukbbva. There wN be wvxrcd kmpocftm of all wft to
d*WwJ » meftmence needs, Amft and vwiekty kwpocftm of the eawkw of the ewro x wM also be
cortduow
D. Rmmldm— quwftd iileMtsewta
A service call lorm wIN be oompteied by the Properly Manager, The Property Manger shoN rewew the
requests and detennkte vAmlim M respires emergency or rmaw agw* n. Emergency repoks we those
that cause or may Cause slgnMm t damage, or make any area unsafe or u nMe ttabie, Every effort wol
be made to cwrW smwgwtcy reeks wMM 24 hours. Exceptto m to SMs could be when parts must be
ordered to complete the service. Furatsr pmvWkra for repairs are cuMrod in Paragraph 10 of the
Monagernord Agmwnent and A will be given to the Property Manager. The Property manager wise Dona*
wfth to PAgiwW Manager to deckle who wM be arsigi i the work depwtdkV on the nakwe and scope of
On worts. In the event OW damages are, I-c�, Me mokla t wHI be rwiJfied d fie amotN t VW
wIP be dtarged for the antral cost of repalm
E inspection Forms
Se Drtm Apwtrnenb - Mwmp mwg Plan Fags 11 of 12
Annual urtit WwV9c f w"be commpk ted and wki be doc urnenlAd on ffle agent'$ irPectlon tarn.
F. Saw&M of AMtdpabd UsMuf Lft and RrplaaMS M.
lam..+ Yens
useu La
Undumping 540
CopWFIm g 5-10
KktmAppknco 10
Cor>rnon Appknve$ 10
Roof 10.15
a. s rveNhwas! conaakd Amen
52nd prlve Aparb>t ft wkl two adupass exWior NgWV and caroraked access to the corr>rrtort areas
surrou ift tfa units. Surveftne camera wM be kntebed wRW the bu king, rmoo rdr>gs vA be We to
be rec w bared on data and tome of a powrlthi wm t. The rmoordng wIN be " to be burned to a
device Utet can be WwAded to the WA poke dsparlmwnt as m*wwAd for oWdwm or for their
• EAwW Parkkp lot lgtatrp wlk br a mkdm>rm d hoot carte.
• Cannon area c ounyards wM be a mktim>sn of 2 foot candles.
• The oomm unRy wiN be waxed with COMM mrror>ry >nk wd and tent
• Commcrrtity entrancei and oormntort arear WM nave eleaboNc ow halm access to rsabenb only.
• Sinai >gs wG be prwwk+ed for waveMence cameras at aN common avers and oomnwnly arts
enbmnoes.
• Sunro Nww syslsm vA allow for ,-xwM rkp and recordkrg from a oeMraitcsd loarion.
• CMw prsver>liort through w**onmerdd design *adepts trams beam MVbm *nW k>b fhe design.
• Slgmepe note sur4ek4rte wlk be parted an the ownnu rAy's main entrances.
UuVueps ►egoding tM cmn w ft being a c*m free owwmn . k>du_dfnp no drops, vMsrm , or c rkms in
general Itkwk ded in the bore. Soup wit be posted on -site sta0ng to MwRxVty Wftprdes in a
crkrn prevrnliort prograrn. Mewing *4 be s&mL4@d durbtg ttn year wM bn reeldards and poNce
department to educate resideft on urban preverWom and b diMM arty cw cwm regandh trine.
AN persons are reapprable to be aware of Owk s mundk".
IV. ATrACHM EM
1. SW dwd Leese Farm
2. Aides and Regulaaons
& Op no g fl>rdpd
5e D" Apartment - Msnspnwg Plan Pap 12 of 12
►., l � ' j �. 1 1
f ►s�aaHtr�tar
1. PAATfAAAAAIpOMR1NGUMM
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bsdr ,
fltlarlad b M dr 1aAaM b Ilr tta0 Mtndsr
LaoiM d
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L TAMrt
Tlr blrl te/wd M/ Ap�aaa�wr ttrl bAWYt as and Vol on
Mar tea bbiil tetw w�da, ws ��r a! oa�Mn�r bnal air agaA aaM anMaa �a�Mp�r rm+Nrlad r
paartI- br /camp' ZAt d Mai A�.a,�
3 PAW.
TM Needled aMaw 10po 1N ow pew mole no" of AtiM
list, Paofdod spew r ory o fwdla pe atn/t. MAS UMN Is due on dr 11 day d dr
atodt d
4. CNAtIOfZ/ M F AltIOMIPf /IMMCP TAWn
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TheC NOWA#mbWldRdwgw olsoesleOwAsew 0 INC
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0. T1r fedlbaabitWdbbMtdsa/otardMtwM w
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OM tatdt b it,lhNtlalta !Ad alpladoM tattbd b adntbMlMalat d Or hares IN taniotd area b Wtse tte
howl" Dodos Nkomo me" aelw of arty bawan b rile nes"MRo Peat weep - Mad b 0 - sp olt
13. T1ta Nob fAoi stole M Ma a1MfA M IlaMdwd i nl*ded b m M dr 1M aw waIIM Y miss, and M
wawa Its Ob t1tblWa b read. Abe Aitrtr wt� Abe adlte dr Iballltt Otat IteYts sear aeM wl�t dM litdlotib diipaa ftb
red dtatt/a�
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an toe der of fba wank Tfo lmolod ao/ AM bMOMlrlo tb Arswne m bwbbm b poi Illedte0tta bead Matt bttaieet tti
AWntsaed le ,,M}QaM1d d Pea, ao upWtad b poapaiU Z& TM airgo OVAM ! le ft peapolt Y M MOM M 1e dr
node aatrdd/ Pert palMia q ON PAON L
Q LCOfM10010lMOgOfIIiCOfAMM
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of Oro bbaM Assure Cede d 1fNl.�ow/awnwdad tb 'tteraol� .yiM11e dMd; owdw we be mod r M
aiatwOs doe�eoaalde fAo LatAMdb wtt 7ho ilwtiesd wiaiopew sAt A wiMwedl rand Mbbob IN
agwee
end tb pose ML
7. tr�d70b• IrfAi
I I it downdad NM de ptettMs No nM a end brrbeaaw wS wdar lOSlan 4t o Pl d die hlle" Rstuae Cttd4
became r no MM or to Mddttdti idea ww dMiriM M du Latta Mr eesd/ b nA
slowed wde eedba 42 of Pea Mlwoud 11wwM crwL Pea teaNM eltt/ bweillty pp b dw MniMa do aawd 41 wrh
amuck %Mt bloom, 11M Isdito as bop► a� to pteaI aNu tr onome tod dManatal o b ntada. b LwtdMd
attol see M bM a/wbb spate tts M.M. f. purpws d MPBOa dte eosa ttlttt.
a. Go1M111M opWANU lMfA11Z1
8p atrdttp w Apteanw, M RMMON ArnettwdWw for to sib Aab. dMM WAIN pad COMMOMt. TM tiufdeMt AWNS w
al aIOMrtsw Old sort jMM N b 20 Wit as, M pd wdiw wfrr, ~ a - , I M Mtt M Ufa lrpipaw WAOd it
aewa
IOWMOI Mtatd ML 1, pppMe�ott 71 d ON ApMMara. I— -1 a 8 do Apart IM M Urldo* Hw Mrw ne ptwdtaa r
daaonMtb aOw. Is,,dr urtl.wawpl w itarlwb Ud logwdart RepwL
t. CNAilOp1r01111R/f»AIIaANCrt
lho b" 4104 dmanba iw M Pew of v Ww ed aanMw fdOW b awuMAq of is NO as M PIK The 1 MOM
A. The
11eA1d1r1 No pio lar IN wtdbw in adlMtet (11aMatw s�MtNMlld be MMda atadir is ltt�appwMYlr still Ocamorl•
T)w one h 4Mtaaa � w bttdadM M tte 11tMdtrd'e Nat
M ptd IN fte bI eats M Pus on Y by my
Oft heal" pep lido/ now b dated M
am Newe"a
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wow
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& The PW MW spew to pro Ow Lw %g Ore a simodtdtotta Mlwr tan Ye dw M wwd i titre
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im oocuwfY Doom
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Tie NO hold Nt aMeelr �Ow Mrild Ota MOM as 098 de wL Ale tr 1sMdw hw satwd tte tutu.
ore LAnied 96 wlso tIftlon — herded — 4%W tar a MAN! M Arty or at 4t lr waslp dep=L The AMoaw 4f dta
rased allbsdrMa+bted b aoorMttwsrlbde t.M.btWeatttlOMr tend praoodwao.
A.. ThA ROa11Md WI w elgNo bre we1lad of Mr eswtlp dspMO Mil O dto Pl Ab A PWAW tr Lo dwd rtMt a liar OM dMy
wtdw man M" td Is Heart req * or twarall a wow Ite Pool" aao anew r OM ft a, 0, 1w Weasels
w►Mrte 1dtlteattttwt
uivaatrlq t t
a Mw to AaWwd has raeaNd to w$L to lr,d$d aM hVW Ne urA ad C I Ml ae W~ UAV >t+easarar tY pest TM
I - 0,n 1 wApma on FiESO i rpawdpela bortntpe s^ goo Aede.w« ritpww►
C. The Larrflad +,t,eAr,d r w AedfM w warts d aao,tyrapeM we. alto $$enya $aad$d N t>~ w sod d
pw�i,gw�Nd w e,A ties N rr$,d r,er aM rw aed a.r aol tieasd on fr ttli Ypadae Aepatl rta. r b pranMr
LgfuAoeWetd, WMrwretil.f�warwrr
3� Clrope to Ifr popr,wa d,aA r Iaetelad Yeparopwph f: and
q . Chwio br aa+aawad W^ soda old eawairwt6
O. Too Laam,d $A wrad w omm ww" N poop" N•C .MM NINIV ON a" dip al w b Rod@" ha
panitaeRd -vabd OP WIL wMaal powngo d w WO r to Laasord and Olwa NOW aaw ad*@= r w LPMaA
Co Land vA do 00 Na 1NaWnf a MEN IN of $baron M wew eupaatld 4aw to rwGA N fn Aeddtr i
mdvftw ftW u�ii � *p" dwd,wio~ adr is wad dN w La,doid, w tandlad apaaa r
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52n'd Drive Apartments
Rules and Regulations
The staff at 5e Drive Apart mortis strive to make your living experience two pleasant
and condonable. The fokAV regulations were designed for your comfort and
convenience, as well as your neighbors. We wish to take this opportunity to tell you
about them:
•Promises' as used M the Rules and Regulations include not only the aparbrrent but all
of the land and Improvements in cling parking lots, driveways and conwron areas
privately owned by the Owner/Agent and generally referred to as the apartment
comm rultl►.
SECTION A. PROPERTY/ MOVE4N CATION
i . Otllcs liars: The Rental Offce is open on the days posted Office hours are as
posted on the office andlfor on tho bulletin board. In case of emergency,
Management may be contacted after office hours via answering service/ pager
2. Rent Collection: AN rents are due and payable to Management at On Rental Office
on or before the first day of each month. Please make chef or money order
payable to the apartment co rnunity. Cash payments are not accepts&
3. Late Chsrpes: AN rents are collected on the thffd V3 day Of the month or thereafter
are subject 10 a late The of as specified in your rental agreernent. Rent is due on the
first day of the month. Lab payment after this fird.day of the month is a courtesy and
should not be abused. Three tale payrrerrb in a twehro (12) month period is
conusids 9d ma6erld non coniplance for c htonlam payment of rent
Collection of Lab Rot The following step-by-step procedure will be used to collect
all rent in arrears:
a. A 3 or 10 Day Notice to Pay Rent or CWN will be served depending an the
tundra source at your corn mundr.
b. Unlawful Detainer Action will be k0dal d.
4. Returned / NSF Chedt<s: if a Resident has one returned check. Resident will be
notified that Management will not accept any further personal ctecks, and rents
thereafter will have to be maid by money order or cashiers check The returned
check must be paid for with a money order or cashiers check within 24 hours after
Resident's receipt of notice. Any dteck that is returned is s to a M-00
processing fee in addition to the isle charge.
5. Lost Keys / Lodwuts: Residents locked out after office hours will be charged a fee of
$25 to have their door opened or Resident may call a Ww*th at resident's
expense to open the door. Locks will be changed for a fee of $25 per lock. Door and
mailbox keys must be returned to Management when Resident vacates.
Paps 1 d 1
upmaa =13
6. Extended Abner m-. Resident should advise Managern" of any planned
absence for an extended period of time. Ikuse-sitters" are not permitted without
prior written consent of management.
7. Mali and Neim"pers: Only registered Residents are to too" mail. AN and must
contain the ha address of your residence, which kidudes ttw apartment nun bor as
well as the bul ft number (it applicable). Unwanted or "throw -away' advertising
should be disposed of property.
6. Apartment Inspection: Residents are required to accompany and aselst the
I . F=V rtherht stall In the completion of an apartment move -in inspection forth, This
form is deemed to record the condition of the apamnent at the time of move -in and
to help determine the finrd dispoeldw of the security deposit after terminating
residency. BI-AAM RY, Management will enter each apartment for inspection and
will also check the snwks detector(*) and replace the air ok filler,
to properly mWntain the units equipment. Each rescdertt will be notdied of the
MMdth a wrilten rxhdcs 24 hours in advarwe.
Upon vacating, Resident is enMW to an inspection of the apartment to assess
move -out cdargeL Resident will be given a minimurn of a 48-hour. ratios prior to the
inspecsiort. Resident will have the right to be present for the inspection, approve for
I M ant to conduct fire inspec lion being present, or wain the right b
9. Water Furnkw- Walsrbeds are permitted only In a000rdanoo with Catifomda law
which insurance protecting owner In an amount not less that $100,000, and an
increase in your deposit equal to one -halt month's rent. Resident must also k*d,
maintain and dinande the bed in accordance with kxkwlry standards. Rceldwnt
may not have on the premises an aquarium or any equivalent type of device with a
cQ1Peatty in OXOM of hen (10) OWWW wWaA Prior written consent of Landlord.
SECTION 0: USE OF PREMIUS:
10. Utility Service: UriNty service mot be maintained In resident's apwtnsnt, at
reams expense AT ALL TIMES. Resident also agrees to cooperate with energy
conservation measures. FaNtxe io maintskh ut ft services or to 000peno with
energy conservation measures will be conNdered cause for termirtdm of residency.
11. Smoke Delec tor: Smoke detection device has been installed to each aparirr om it is
the Resident's reWnsibility during residency b periodically test the device.
Resident must inform to Management Reposer -tali" immediately in writing of any
de(ect, mWkvx ion or fall re of any detector(*). l'lenaving or tampering with a
smoke defector will be considered calve for tenhdnstion of residenccy.
Pape 2 012
Reside 19 hdmk
uv"W omna
12 Unsafe Condltbns: Resident agrees to mW immneniately to Management any
a=WM ", damage or loss, or need of servive or repairs to water or gas pipes,
eiootal wn ft drains, toilets, %dunes, or any other properly or equipment covered
by the base, indudktp d breakage, damage, or loss of any kind iirxkadng but not
lasted to weer inausion, water leaks or rr oft" probbrns of any hind, damage
from overflow, of water from skins, baftubs, toasts, or other basins. Resident further
agrees to imn Kgetely notify Management of unsafe card dons in the oo mmon areas
and grounds of mf 1e promises which may bad to damage or injury.
13.Alteraftne or Addlfwx: Resident snap not make any alleradons or adoptions to the
premises. I any repairs, akeratlor* or adWons are necessary, Resident shag notify
Management in willing, Resident shag make no repairs, abradons, exterior
alterations inoWe but ass not Mmited to posting of signs, Rape, pfatks on ledges and
wind chines, addition to the dwegkV struolwo inside or out widW brat obtaining
written consent from Management. Mwrican loge may be displayed wittnkt the laws
of the state and proper Haiti etiquette. Interior alterations krdude but are not Nnmited
to, changing light ib4ures, paWng, hanging w0paper, sic.
14.outward Appearance: Alterations that affect the aparWw t conmrrrtxnWs outward
appew at m. such as I I Ing personal window coverings, foil on wkxk mars, towels,
bbrnkefs or clothing draped over balconies or partitions b not pen *tad. Signs or
advertising rnateriab will not be permitted to be posted. No fog, sign ad m ftements,
poster, or simmer display, shah be aifbcsd to any door, window or exterior wall #W
may be vbbb from the outride of to buk*V try other residents.
15.Antannas: The Federal Communications Commission stales that Residents have a
limited r%ftjo install a satellite dish or rooehrkp antenna *Mn the leased premises.
Management Is agowed to impose macroble reelriddlons to such IrWAWonn. AN
requests for irstakdon must be subntilied to Mw ggemol in writing. The rental
agreement met be amended to kaorporste require -no and rsslrfcpons prior to
any won. For kftmalion on requirements and rorgric kxw conned
Management. Resident shag not krstall any external television or radtic reception
devils nor comb or have others climb upon the roof. A separate depose is required
prior to installation.
16. 880s: Due to hire and other safety hazard concerns. no ddnarooal b*peft bwbeque
ems, gas or propene gf+ cooidngfhed g Instruments, smolders, htbac hl grills,
portable gas stoves, sisclric oop wit ek. are to be stored or operated In the
aparttnermin or on patios, beloorrtes or breezeway a rem Any use of open flame Is
prohloiied including but not ihrnnited to Wwbeques and torches.
17. Windows andlor Screens: Residents shag be responsible W repiacerrnent ardor
repair of windows andvor screens damaged or removed by resident, members of
i3esidmnfe household or guests.
16. lushness: Resident snap not use the promises or permit their premises to be used
for any bushm purpose, wNhout the prior written consent of Management.
Pape 3 or 3
Residanfs kwtrab _
uod@.e e2n3
19. Locks: Residents shelf not alter any lock or install a new lock or knocker on any door
of the prerniees wlthart the written consent of Managwwnt; and N ins#allsd, they
shall not be removed. In such case consent is given Resident shall provide
a . NIEW mnert with a hey for the use of Management, pursuant to fubrnageme $ right
to access to the premism locks or drains must be left in place- when Resident
vacates.
20. EWipmw* No personal dishwashirq rt►whkw, clothes wasting machine, clothes
dryer or o1er bwp appliances is pemtttad in the apartment -without prior written
consent of mawgemert.
21. Parcels: Resident is responsible for making arrangements for panel delivery that
does not lit In the provided mnail recepteciL Management representmives are not
aatlwd wd to sign for parcels. This kxWes parcels from UPS, Federal Express,
U.S. Postal Service or other mall and delivery services.
SECTION C: USE OF COMM AREAS
22. The common area entrwww walkways, perking cob and landscaped areas shelf not
be obstructed in any manner nor used for storage or any other purpose other than
that for which they were designed. No flea main kets, ywd salsa, consuming alohofic
beverages, atm are permitted M tiro common areas.
23. Notices by Residents mast be approved by Management and may be posted only M
the laundry moms and only on the buleth boards provided for that purpose.
Ak- will regulate and approve all items that are to be placed on the bulletin
24. The Comma* Room is provided for the exclusive use of the Community's
Residents and their a000 Mw*d g xwft Most facilities, are avat bie when the
taclilly is open and are to be used at ftne PmMents own risk Residents wanting to
use dne Commux*y Room for private pariles may do so by reserving the room,
completing the Camwnity Room Agnean a nt, and placing a ctswft deposit, Any
person(s) creating a dsbxbwm or using dsodaty conduct in the Comanunity
Room will be restrkied from the area. Residents will be responsible for their
ho C�dm members and guests at all times and liable for any and all danWes io
*f Room
25. Nothing shall be placed or left overrrigit In the common area. nor shd any Ww,
dotflrng, attains, rugs, mops, or other items be shaken or taxng on or any wlrdow,
door, nOng, or
20. AN ftwoorpots on the balconies and in apatments mud have a drainage dish
underneath to prevent water damage. No plants may be pieced on we railings.
27. Bicycles shall be stored only in the apartments or In the bicycle racks. alcyde riding
Is not allowed wittln the complex. This includes the waMcways and grass areas.
Skateboard riding, scooter riding and roilerbiadng are also not allowed ,within the
hex, this includes walkways and parking lot areas.
Psae 4 of 4
Resldwts h�Nlei�
Vpdred 4M3
2f3. The maM= area► is to be kept dean and free from debris.
29. Management shah not be respora>;bis for any item intended for deWerY to a
Reaidsnt that are delivered to or left in any public area.
30, NothkV shall be swept or ttxown out of windows or over balconies of the buildings.Mops, brooms, towels, btcydes and simian items may not be left on
patlos/befcor"
31. The Pam Cwwwt be used as a storage area and must bs kept in a dean
and sankary cormAw V all tirnes.
32.The open space around the building has been provided for your use Old en0O'r4.
Any aclfvity that may damap the lawn Per► % M. is pmfilblwl and any
damaged w§ be charged to the responmakmle Resident.
33.No tune. kwWdkV but not lmiled lo, outdoor fume or chldren's wading lea
shall remain ovemfgM In the common area&
34.Manegement is not reporm bts for any lost or m1v*V ar*kM of Resikents or
guee
.tfm s will be dwped to do r
will be charged to the resporabs Reside*
SEED-. AMAGE
the
pien should be pramply reported b
38. M Paase r
occurring after ofla hours to the
Mwwgwrtqemergency rxxnber as posted at the Rental Office. Residervis are cautioned to m�
dismlo en in repoRing emergerx*w oiler oflos hours, as ordy eawgendes
receive attention afw regWar twirs•
37. Service Requests: Routine Moluests for Maintenance wno be given to NMar"ement inwr" wherrever . irxdj*lg] permission to enter in Resident's absence or a
requeg for appoir*rang gCh0d appokworoft will be set 1n a 4 hour wkmdow.
lylgragwrient has the NM to enW k Management believes an enmergencl► exists.
Residelt 10 report need of service or repairs to the properly or
cowered by the �, kck d♦rp unsafe oord form in the common areas
and grounds of the prertmises lfmat may be a areal to heakh and safety or lead b
damage or ir*)ry.
24. Sevier Stoppages: The sewer sYst M is sdequatie to handle ail normal waste, but
Ow system wo not handls dspwable diapers, fenmim producis or other such
refuse. Addition
ons to to � toilet deansl
from alterationsaddilloon to commercial deodorizer and/or resident'$
negligence will be cleared at Reek Mrs expense.
Paps 5 at 5
upe.a oZMa
SECTHM E: HOUSEKEEPM
25.Standard@: Resident shall keep the interior of the apartment dean accordktg to good
housekeeping standards. This Includes mafnt"V an uti ky services. Resident win
assume fun respariablifty for keol*V their Patio, entry doors, entrance walkways,
Poems, Patloa and balconies am cleaned, neatly arranged and free from unsightly
or unused derma.
Resident shall keep the promises and such othe► are" as may be aligned for
Resident's erodusive use, including but not trotted to, to apartment fixdues,
aPPnances, entry doors, windows and screens, skW*al% parWrg sj an d
grounds, in a dean, safe and sanitary condition. ResKignt shan rekdn from atrakkg,
clealft harving clothes, towels, nrgs or other Personal prop" from windows,
balconies or railings.
26.Prorvention of Moisbrre Problems: Moisture problems must be prevented and treated
imrmsdlatey ro Prevent mold. Proper ventilation is essential for pnvsndng moil. n
you should have mold develop on windows, walls, or conings, or a musty odor is
present in the canpstlng report these core Mkm to .y
fnckrdfng the window tracks. condens OM which develops on windows from indoor
moisture, must be wiped dowry irrwmedlately inkudng the **Wm tracks.
Condensation on wkrdowa that fresh air Is not being ctcuhftd in the hates
to prevent moisture buildup. Open your wkndowe and air out your home for short
Periods of time to keep truth air present. Erkcessive rur"N of you heater win cftes
condersatlon in your hare. Report argr rkmning or dripping faucets, ptkrmbkg leaks,
roof Isales, discoloration of waft or water intrusion krxnediatey to the rental ofnc e.-
27.Pod Control: Resident Shan report the need for pod control to Mwmgenwnt.
Resident agrees to 000persis kh the pest conhvl servikw and abide by guide km
given by the pod control service or management.
28. Heath and SaW Aesideat agrees to car" with an Imposed upon
RnWwots by applicabis proviefors of State and local bunting and houskg codes
st�rds.� health and �, maintmvV adequate housekeeping
29.SWape: Garbage leam bottles, brooms, mope, toys. bicycles. fitness M
cardboard bom", household ftorrriture, and sunray persorW Property are to be kept
Inside the apartment or approprlalely designated s/orape areas and out of view.
Patios andlor baW*w are to be used for path furniture only. Areas locate, outside
front doors or on stairway fandimgs are part of the common area and cwwm be used
for storage.
30.6mokkV. Smokkg is not penmiped In the unit, common areas or ground@ of the
comma ty as a whole. kterference wigr ottw reskfert's 6" to ttw enjoyment of
the premises as a result of smoking rmay be grounds for termination of residency.
Paseds
urd.rd =13