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Resolution No. 2014-005 (6)TRANSMITTAL COMMUNICATION OFFICE OF THE CITY CLERK 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 April 10, 2014 52"d Drive Apartments, L.P. c/o Meta Housing Corporation ATTN: John M. Huskey, President 1640 S. Sepulveda Blvd., Suite 425 Los Angeles, CA 90011 Re: Promissory Note and Ground Lease for the 52"d Drive Housing Development Project Dear Mr. Huskey: Transmitted herewith is an original fully executed Ground Lease and one copy of the Promissory Note as referenced above, approved by the City Council of the City of Vernon on March 4, 2014, through Resolution No. 2014-05. If you have any questions regarding this matter, please contact Kevin Wilson at (323) 583-8811 Ext. 245. Very trulyyours, Deborah R.Juarez Records Management Assistant Enclosures c: Kevin Wilson Resolution No. 2014-05 Agreement No. 14-008 cfusivefy Industriaf PROMISSORY NOTE PROMISSORY NOTE $1,060,000 March 1, 2014 Vernon, California FOR VALUE RECEIVED, 52ND DRIVE APARTMENTS, L.P., a California limited partnership (the "Borrower"), promises to pay to the CITY OF VERNON, a California charter city and municipal corporation (the "City"), or order, at the City's office at 4305 Santa Fe Avenue, Vernon, California 90058, or such other place as the City may designate in writing, the sum of One Million and Sixty Thousand Dollars ($1,060,000) (the "Note Amount"), or so much of such sum as is disbursed to or on behalf of Borrower, in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts. 1. Agreement. This Promissory Note (the "Note") is given in accordance with that certain Loan Agreement executed by the City and Meta Housing Corporation, dated as of July 3, 2013 (the "Agreement"). City and Meta Housing Corporation have also entered into a Disposition and Development Agreement, dated as of June 18, 2013 (the "DDA"), and a "Ground Lease" dated as of March 1, 2014. The rights and obligations of the Borrower and the City under this Note shall be governed by the Agreement and by the additional terns set forth in this Note. In the event of any inconsistencies between the terms of this Note and the terms of the Agreement or any other document related to the Note Amount, the terms of this Note shall prevail. 2. Interest. The Note Amount shall bear simple interest at the rate of three percent (3%) per annum from the date hereof. 3. Repayment of Note Amount from Residual Receipts, The Note Amount shall be paid by the Borrower's annual payment to the City of an amount equal to fifty percent (50%) of the annual Residual Receipts until such time as the City shall have received Fifteen Thousand Dollars ($15,000) in Residual Receipts payments, and thereafter an amount equal to one hundred percent (100%) of the Residual Receipts, until such time as the Note Amount is repaid in full. Beginning in the second year of Residual Receipts payments, the foregoing Fifteen Thousand Dollars ($15,000) Residual Receipts threshold shall increase annually over the previous year by the same percentage as the annual increase in the federal Low Income Housing Tax Credit rents for Los Angeles County, but in all cases shall never decease lower than that of the previous year. Annual Residual Receipts payments shall be made by the Borrower by cashier's check and shall be delivered to City on or before March 31 of each year during the term of this Note first following the date of funding of the permanent loan for the Housing Development, until the Note Amount and all unpaid interest thereon has been repaid in full. Any remaining portion of the Note Amount shall be due and payable on the sixty-fifth (65`h) anniversary of the date of this Note. Notwithstanding the foregoing, the fill Note Amount may be accelerated as set forth in Section 15 hereof. As used herein, "Annual Project Revenue" shall mean all gross income and all revenues of any kind from the Housing Development in a calendar year, including without limitation, Housing Development rents, Section 8 housing assistance payments, if any, late charges, vending machine income, and any other revenues of whatever kind or nature from the Housing Development, except that interest on security deposits and required reserves shall not be considered Annual Project 1082285.3 12098-003 Revenue. As used herein, "Debt Service" means regularly scheduled payments of principal and interest made in a calendar year pursuant to the permanent financing approved pursuant to Section 401 of the DDA or Section 15 of the Ground Lease, which is senior in lien priority to the City Loan, including any substitutions, modifications, extensions, increases or replacements of the primary and permanent financing which is approved by the City, which approval shall not be unreasonably withheld, which is senior in lien priority to the City Loan. Debt Service excludes payments made pursuant to this Note. As used herein, "Deferred Developer Fees" shall mean any deferred developer fee allowable under the financing approved by the City pursuant to Section 401 of the Agreement. As used herein, "Operating Expenses" shall mean all normal and customary costs and expenses reasonably incurred, paid, and attributable to the operation, recordkeeping, maintenance, management and taxes of the Housing Development, including those costs of repair and replacement of the Housing Development capital improvements, furnishings, fixtures, and equipment which are cannot be paid through applicable reserve fiends, to the extent consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles, including: painting, cleaning, repairs, alterations, landscaping, utilities, refuse removal, certificates, permits and licenses, sewer charges, real and personal property taxes, assessments, insurance, security, advertising and promotion, janitorial services, cleaning and building supplies, purchase, repair, servicing and installation of appliances, equipment, fixtures and furnishings which are not paid from capital replacement reserves, fees and expenses of property management, fees and expenses of accountants, attorneys and other professionals, and other actual, reasonable and customary operating costs and capital costs which are directly incurred and paid by the Borrower, but which are not paid from operating reserve or other reserve accounts. The Operating Expenses shall not in any event include expenses unrelated to the Housing Development's operations, including without limitation depreciation, amortization, and accrued principal and interest expense on deferred payment debt. As used herein, "Reserve Deposits" shall mean deposits to reserve accounts required by the permanent loan or limited partnership agreement. As used herein, "Residual Receipts" shall mean Annual Project Revenue less the sum of (i) Operating Expenses, (ii) Debt Service, (iii) Reserve Deposits, (iv) Deferred Developer Fees, (v) a partnership management fee payable to the managing general partner of Borrower required by the limited partnership agreement in an amount approved by City, (vi) an asset management fee payable to one or more of the limited partners of Borrower required by the limited partnership agreement in an amount approved by City, and (vii) tax credit shortfall payments required by the limited partnership agreement, for each calendar year; provided, however, that if such calculation results in a negative number, Residual Receipts shall be zero for that year. On or before March 31 of each year commencing in the year of the issuance of a certificate of occupancy for the Housing Development, the Borrower shall annually provide the City a Residual Receipts report, in the form attached to the Agreement as Exhibit B or such other form which is reasonably acceptable to the City, which shall describe in detail the Annual Project Revenue, Debt 1082285.3 12098-003 Service, Operating Expenses, Reserve Deposits, Asset Management Fees, Deferred Developer Fees, and Residual Receipts for that year. The Borrower shall also submit to the City, on or before March 31 of each year commencing in the year of the issuance of a certificate of occupancy for the Housing Development, annual financial statements with respect to the Housing Development that have been reviewed by an independent certified public accountant, together with an expressed written opinion of the certified public accountant that such financial statements present the financial position, results of operations, and cash flows fairly and in accordance with generally accepted accounting principles. 4. Repayment of Note Amount from Proceeds of Other Loans. Borrower is required under Section 3 of the Agreement to use commercially reasonable efforts to apply for all other governmental and other subsidized loan programs available for affordable housing projects, and for which the Borrower in its reasonable discretion believes the Housing Development will be competitive, including without limitation the Affordable Housing Program of the Federal Home Loan Bank. If any such grants or loans are awarded or obtained prior to the final disbursement of the City Loan, the City shall have the option in its sole discretion to reduce the principal amount of the Note Amount by the amount of such grants or loans. In addition, the proceeds of such grants or loans shall be used, to the extent permitted by the terms of those programs, to repay the outstanding Note Amount balance. 5. Repayment of Note Amount from Refinancing and Sales Proceeds. If Borrower refinances the first priority permanent loan, Borrower shall use City's Pro Rata Share of the Net Financing Proceeds (as defined in the Ground Lease) to repay the Note Amount. If Borrower sells or assigns its interest in the Housing Development and the Ground Lease, other than through a Permitted Transfer (as defined in Section 703.2 of the DDA and Section 14.2 of the Ground Lease), Borrower shall use City's Pro Rata Share of the Net Sales Proceeds (as defined in the Ground Lease) to repay the Note Amount. 6. Repayment of Note Amount from City Utility Rebates. Any rebates received by Borrower from City utilities shall be paid to City as a repayment of the Note Amount. 7. Security. This Note is secured by a Deed of Trust (the "Deed of Trust") dated as of the same date as this Note. 8. Waivers a. Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time at the City's sole discretion and that the City may accept security in consideration for any such extension or release any security for this Note at its sole discretion all without in any way affecting the liability of Borrower. b. No extension of time for payment of this Note made by agreement by the City with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part. 1082285.3 12098-003 3 C. The obligations of Borrower under this Note shall be absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note . for any reasons whatsoever. d. Borrower waives presentment, demand, notice of protest and nonpayment, notice of default or delinquency, notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of dishonor, diligence in collection or in proceeding against any of the rights of interests in or to properties securing of this Note, and the benefit of any exemption under any homestead exemption laws, if applicable. e. No previous waiver and no failure or delay by City in acting with respect to the terms of this Note or the Deed of Trust shall constitute a waiver of any breach, default, or failure or condition under this Note, the Deed of Trust or the obligations secured thereby. A waiver of any term of this Note, the Deed of Trust or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of such waiver. 9. Attorneys' Fees and Costs. Borrower agrees that if any amounts due under this Note are not paid when due, to pay in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. 10. Joint and Several Obligation. This Note is the joint and several obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their heirs, successors and assigns. 11. Amendments and Modifications. This Note may not be changed orally, but only by an amendment in writing signed by Borrower and by the City. 12. City May Assign. City may, at its option, assign its right to receive payment under this Note without necessity of obtaining the consent of the Borrower. 13. Borrower Assignment Prohibited. In no event shall Borrower assign or transfer any portion of this Note without the prior express written consent of the City, which consent shall not unreasonably be withheld, except pursuant to a transfer which is permitted or approved under Section 703 of the DDA or Section 14 of the Ground Lease. 14. Terms. Any terms not separately defined herein shall have the same meanings as set forth in the Agreement. 15. Acceleration and Other Remedies. Upon: (a) the occurrence of an Event of Default as defined in the Agreement, Ground Lease or DDA, or (b) the termination of the Agreement, Ground Lease or DDA (other than the expiration of the DDA upon the completion of construction of the housing project in accordance with the terms of the DDA), or (c) Borrower selling, contracting to sell, giving an option to purchase, conveying, leasing, further encumbering, mortgaging, assigning or alienating the Borrower's interest in the Housing Development (other than (i) financing approved by the City or otherwise permitted pursuant to Section 401 of the DDA or Section 15 of the Ground Lease, (ii) leasing of individual Housing Units to tenants in the ordinary course of business, or (iii) a purchase option and/or right of first refusal granted to Borrower's 1082285.3 12098-003 4 general partner(s) or affiliates thereof), whether directly or indirectly, whether voluntarily or involuntarily or by operation of law, or any interest in the Housing Development, or suffering its title, or any interest in the Housing Development to be divested, whether voluntarily or involuntarily, without the consent of the City or as otherwise approved or permitted under the DDA or Ground Lease, City may, at City's option, declare the outstanding principal amount of this Note, together with the then accrued and unpaid interest thereon and other charges hereunder, and all other sums secured by the Deed of Trust, to be due and payable immediately, and upon such declaration, such principal and interest and other sums shall immediately become and be due and payable without demand or notice, all as further set forth in the Deed of Trust. All costs of collection, including, but not limited to, reasonable attorneys' fees and all expenses incurred in connection with protection of, or realization on, the security for this Note, may be added to the principal hereunder, and shall accrue interest as provided herein. City shall at all times have the right to proceed against any portion of the security for this Note in such order and in such manner as such City may consider appropriate, without waiving any rights with respect to any of the security. Any delay or omission on the part of the City in exercising any right hereunder, under the Agreement or under the Deed of Trust shall not operate as a waiver of such right, or of any other right. No single or partial exercise of any right or remedy hereunder or under the Agreement or any other document or agreement shall preclude other or further exercises thereof, or the exercise of any other right or remedy. The acceptance of payment of any sum payable hereunder, or part thereof, after the due date of such payment shall not be a waiver of City's right to either require prompt payment when due of all other sums payable hereunder or to declare an Event of Default for failure to make prompt or complete payment. 16. Consents. Borrower hereby consents to: (a) any renewal, extension or modification (whether one or more) of the terms of the Agreement or the terms or time of payment under this Note, (b) the release or surrender or exchange or substitution of all or any part of the security, whether real or personal, or direct or indirect, for the payment hereof, (c) the granting of any other indulgences to Borrower, and (d) the taking or releasing of other or additional parties primarily or contingently liable hereunder. Any such renewal, extension, modification, release, surrender, exchange or substitution may be made without notice to Borrower or to any endorser, guarantor or surety hereof, and without affecting the liability of said parties hereunder. 17. Successors and Assigns. Whenever "City" is referred to in this Note, such reference shall be deemed to include the City of Vernon and its successors and assigns, including, without limitation, any subsequent assignee or holder of this Note. All covenants, provisions and agreements by or on behalf of Borrower, and on behalf of any makers, endorsers, guarantors and sureties hereof which are contained herein shall inure to the benefit of the City and City's successors and assigns. 18. Miscellaneous. Time is of the essence hereof. This Note shall be governed by and construed under the laws of the State of California except to the extent Federal laws preempt the laws of the State of California. Borrower irrevocably and unconditionally submits to the j urisdiction of the Superior Court of the State of California for the County of Los Angeles or the United States District Court of the Central District of California, as City hereof may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Note. Borrower also waives any objection regarding personal or in rem jurisdiction or venue. 19. No Personal Liability. In the event of any default under the terms of this Note or the 1082285.3 12098-003 5 Deed of Trust, the sole recourse of the City for any and all such defaults shall be by judicial foreclosure or by the exercise of the trustee's power of sale, and Borrower and its partners shall not be personally liable for the payment of this Note or for the payment of any deficiency established after judicial foreclosure or trustee's sale; provided, however, that the foregoing shall not in any way affect any rights the City may have (as a secured party or otherwise) hereunder or under the Agreement or Deed of Trust to recover directly from Borrower any amounts secured by the Deed of Trust, or any funds, damages or costs (including without limitation reasonable attorneys' fees and costs) incurred by City as a result of fraud, misrepresentation or waste, and any costs and expenses incurred by the City in connection therewith (including without limitation reasonable attorneys' fees and costs). BORROWER: 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-- 6idham P. Esple es President By: 52nd Drive Apartments LLC, a California limited liability company, its Administrative General Partner By: Kasey Bur&. Vice President 1082285.3 12098-003 6 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 52ND 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 (651h) 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 12098-003 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 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 (50%) 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 (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 1085816.5 12098-003 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 (50%) 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 first 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 1085816.5 12098-003 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. 4.4 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 12098-003 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 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 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 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 5 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. 6.1 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 12098-003 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. 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 (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 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)), (ii) 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 etseq. "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 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 12098-003 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 Site: 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 12098-003 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. 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 12098-003 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. 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 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 1085816.5 12098-003 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 nonperfonnance 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 CPI. 1085816.5 12098-003 16 (c) 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 12098-003 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 rentalrequired 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. (c) 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), (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 of the 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 1085816.5 12098-003 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 1085816.5 12098-003 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 (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 1085816.5 12098-003 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 1085816.5 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(i)(1) 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 in trust, 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 12098-003 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 of the 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 1085816.5 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: Attachment, execution or other judicial levy upon this Lease or the leasehold estate hereby created; ii. Assignment of this Lease or the leasehold estate hereby created for the direct or indirect benefit of creditors of any prior Lessee; iii. 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. i. 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 12098-003 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 govern 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 (2%), 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, 70th 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: f 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. 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. 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 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 orjoint 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 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 12098-003 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 12098-003 32 IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by their lawfully authorized officers. ATTEST: City Cle , 17cpu1y ,rcie rMala ; • : I NF CityAttorney, j)Vv(V. 5;c,t j PoH-ew & Girard, Counsel to City CITY: CITY OF VERNON, a California charter city and municipal corporation 1085816.5 12098-003 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 Graham P. Esple one President By: 52nd Drive Apartments LLC, a California limited liability company, its Administrative General Partner By: Kasey Burke Vice President 1085816.5 12098-003 34 EXHIBIT A SITE MAP [To be provided] 1085816.5 12098-003 A-1 EXHIBIT 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] 1085816.5 12098-003 C-1 EXHIBIT D PROPERTY SITE MANAGEMENT PLAN [To Be Inserted] D-1 MANAGEMENT PLAN 52nd Drive Apartments Vernon, California (.MANAGEMENT A. Role and responsibility of the Owner and/or delegation of sathorky to the management spent. 1. Scope of Responsibilities. The respective responsibilities of 5e Drive Apartments, (the "Owner) and Solarl Enterprises, Inc. (the "Agent) are described in the Management Agreement. This Management Plan (the "Plan') Is incorporated by reference in to the Management Agreement. This Plan does not supersede the Agreement. The terms of the Agreement supersede any terms of this Plan ff there are any contradictory provisions, while the terms of this Plan supplement the terms of the Agreement N any provisions In the Plan are not explicitly included In the Agreement. The Plan Is also a requirement of the Disposition and Development Agreement, Ground Lease and Rejulatory Agreement between the City of Vernon ('CItyJ and Owner. Under these agreements, the 52 Drive Apartments are required to be managed In accordance with this Plan. The Agent will need prior approval from the Owner before taking action as noted below: a) Letting of any large contracts such as exterior painting, remodeling, etc. b) Disbursements In excess of $3,000 for labor and or materials required to maintain it* development. The Agent must make every effort to keep disbursements within the guidelines of the projected budget amounts. 2. Change In Mansgemsnt Agent. The Owner maintains a list of property management agents who have the experience and capacity to manage the site and who are experienced in publicly supported affordable housing projects. The Management Agreement provides that the Agreement may be terminated by mutual consent of the Owner or the Agent with sixty (60) days written notice. If the Agent changes after occupancy, the Owner shall Immediately seek and contract for services with another agent. The Owner and the Agent shall abide by the procedures outlined In the Management Agreement. The Owner shall be responsible for providing the new Agent with the scope of responsibilities for on-gokV operations. The City Is entitled to reasonably approve changes to the Agent. 52id Drive Apartments - Management Plan Page 1 of 12 e. Personnel Policy and Staffing Arrangements. 1. Job Titles and Responsibilities. The following personnel will be involved In the management of the property. a) Regional Manager. Detailed job description appears in Exhibits. b) Comollar>ce Sgeclal 1: Detailed job description appears In Exhibits. c) Property Manager Detailed job description appears in Exhibits. d) Maintenance: Detailed job description appears in Exhibits. Agent and all of Its personnel are prohibited from lobbying, influencing or attempting to influence any residents of the Se Drive Apartments, or any other registered voters or residents of the City, with respect to any matters which require the approval of the City or the electorate of the City. 2. Hiring Policy. a) Minimum job qualifications for each position are detailed In the job descriptions In Exhibits. b) Interested applicants may contact the Management Agent's Home Office to establish a time to come In and complete an application. An applicant will be required to complete a written application and take a drug test. Skills testing and an oral Interview may also be required The Agent will inform each applicant it they were accepted or the rejected for an employment opportunity. c) Applicants are considered for positions, and employe" are treated during their employment without regard to race, ethnicity, national origin, religion, creed, sex, age, marital or veteran status, medical condition or handicap. All hiring of personnel shall conform to Equal Employment Opportunity guidelines. it Is the intent of the Agent to comply with the laws and regulators, as applicable, concerning fair employment and affirmative action, The Agent will work with the Owner to actively recruit qualified minority candidates for all jobs. Special efforts will be made to provide information regarding job openings to minority candidates and contractors through outreach to community organizations, bulletin boards, newspapers, and other communications media. All hiring materials will Indicate that the Agent is an "Equal Opportunity Employer.• 3. Training Staff will receive comprehensive training by the Management in addition, the Regional Manager will provkis concentrated training to personnel on a regular basis during the site vishe. Training of all personnel covering the program guidelines and management policies will be carved on an ongoing basis. In addition, the Agent will inform Its staff In writing of all changes in management policies and requirements Immediately after any such changes have been published. The project related personnel would be sent to relevant management workshops sponsored by various property management associations and. agencies for the purpose of updating and renewing work -related skills. 52n0 Drive Apartments - Management Plan Page 2 of 12 4. Employment of Residents The Agent may give priority to qualified residents of 6V Drive Apartments and then to members of the local community in hiring of project personnel, and will make available to the residents all pertinent information, such as qualifications, remuneration, application procedures, etc. Depending upon the employment position, unit rent may be affected by employment If rent Is adjusted, such adjustment shall be included as part of the employees compensation and shall be established as such in a written work agreement between the Agent and the employee. 0. Plan for Maintaining Adequate Accounting Recorde and Handling Necessary Fornta and Vouchers 1. Projsd Accounting Buis. Financial accounting, reports, and records shall be in conformance with standard accrual basis axounting procedures, and shall be responsive to the guidelines provided by the regulatory agencies connected with the project. The Agent shall maintain all accounting records on a computer system at the central office location. Records of rent collection and all financial transactions will be transmitted to the Home Office and Input Into the computer system where a general ledger, cash receipts and disbursements records will be maintained. AN regulatory reporting documents will be completed in conjunction with the Owner and will be based upon the requirements of the regulatory agencies. At a minimum, the Owner shall receive monthly reports concerning the following: a) Cash status report including cash receipts, disbursements and receivables. b) blst of accounts payable. c) Comparisons of actual versus budgeted operating costs as well as comparisons with the operating costs In the previous year. d) Vacancy report. 2. Operating Disbursements Disbursements from the operating account shall be made as described in Paragraph 13 of the Management Agreement. Bills will be paid and accounts will be funded pursuant to the requirements of the project's Management Agreement and Loan Agreement. Specifically: a) A purchase order system will be utilized to document most project expenses with the exception of Items and services provided on a regular contractual basis (utilities, trash removal, service contracts, etc.). b) Purchase order copies will be matched to invoices and approved by the property manager prior to payment Payments will be processed semi-monthly. c) The Agent andror Owner shall maintain the following separate accounts: General Operating Account. The Agent shall maintain an operating account for rent collection and payment of the project's operating expenses. 52n° Drive Apartnents - Management Plan Page 3 of 12 Operating Reserve Account. The Agent shall maintain the operating reserve account This account will be initially funded as required by the lenders and Investors to the project In the amount established in the regulatory agreements. Subsequent deposits to this account will be made in amounts as specified in the annually approved operating budgets. Funds may be transferred from this account only to cover actual operating expenses in excess of the approved budget amount, or to compensate for vacancy and bad debt losses In the approved budget amount. Prior approval must be obtained before withdrawal of funds. Replacement Reserves. This account will be funded through regular contributions from the Operating account. The Initial contribution to tide account will be determined by the lenders and Investors to the project In amount established to the regulatory agreements. The amount of funds will be based on anticipated capital Improvements, project upgrading, and replacement Items that the projects physical assets will require. Prior approval must be obtained before withdrawal of funds. Security Deposits. The Agent will maintain a Security Deposit Account. The account shall be separate from the operating account. (See Section 5 for additional Information on the Security Deposit Account.) 3 Cost Control Expenses In excess of $3,000 require the Owner's specific approval, except for emergency repairs where the Agent will communicate with the owner as soon as possible. Purchase contracts In excess of $2,000 must be put out for three bids. AN reporting and accounting requirements shall be governed by the Management Agreement. 4. Vacancy and Rent Loss Reoords As outlined In the Management Agreement, the Agent shall prepare, as part of the monthly reports to the Owner, an Inowne/expense statement, and a rent roll showing scheduled and actual rents with a list of resident delkiquencies. Delinquency reports shall Indicate whether residents are 30, 60, or 80 days behind in their rent. 5. Security Deposfb Security deposits will be collected in an amount equal to one (1) month's rent. The Agent shall establish an interest bearing account for Security Deposits. The amount of any deductions from the security deposit will be determined by the Agent's Property Manager under guidelines established by the Agent and approved by the Owner. Security deposits may be used to pay for resident -caused damages, lost keys or garage door remote controls, delinquent rent, late fees, legal fees and any other reasonable expense caused directly as a result of a resient's actions. If no charges are made against a resident's security deposit, a resident shall be entitled to a refund of a security deposit. Interest shall be included In such refund to the extent required so by any applicable law. Security deposit refunds will be mailed to a former resident within 21 days of departure. Any accrued Interest on security deposits that Is not required by law to be refunded will be made available for operations and repairs related to the project. Security deposits shall be maintained M a separate account from the operating and reserve accounts. Security deposits shall be shown as liabilities on all project reports, and not Included as income. Se Drive ApaNneme - Management Plan Page 4 of 12 Upon vacating a unit, the Agent shall inspect the departing resktent's unit to determine whether the resident household caused any damages while they occupied the unit. The inspection form prior to move -in shall be used as the basis of comparison. In the event that there are resident -caused damages, the Agent shall prepare within 21 days of the vacate data, an estimate of the cost of repairing the damages and provide the estimate to the resident Within 21 days of departure, the Agent shall make the necessary repairs and send the former resident an itemized list of repair costs (11 any), and credit the security deposit against the cost of repairs. The former resident shah be sent a check for the balance of tire security deposit, If any. Should the repair coats exceed the amount of the security deposit, and then the former resident will be sent an invoice for the excessive cost of the repairs. All documentation shall be maintained in the former residents file. D. Management Plan Updates The Management Plan shall be updated on the following occasions: a) Change or modifications of 52nd Drive Apartments' management guidelines, which will be reviewed annually. b) Alteration of 52nd Drive Apartments' staffing that necessitates operating procedure revisions. E Property and Liability Insurance The Owner shah arrange for the Project to be insured against loss by fire and such other hazards, casualties, liabilities and contingencies, and In such amounts and for such periods as required by the regulatory agencies. 1L OCCUPANCY A. Unit Breakdown 52nd Drive Apartments will have 44 residential units comprised of 1, 2 and 3 bedroom units serving households within 30% - 55% Area Median Gross Income Levels. There will also be 1 management Link. All applications received will be reviewed for all program requirements and eligibility restrictions. B. Marketing Plans and Procedures 1. Aftlrmagw Plans and Procedures The Agent will be responsible for marketing and leasing the units. The rental office will be located on site and the Owner will supply all of the necessary office furniture (desk file cabinet, chairs, W.) and equipment (typewriter, computer, printer calculator etc.). Units shall be marketed in accordance with Affirmative Fair Housing marketing guidelines. All advertising for 52nd Drive Apartments shall include prominent use of Equal Housing Opportunity logos, slogans andlor statements of intent to affirmatively market the units. Outreach to the community will specifically be through newspapers, beat government agencies such as the City of Vernon, Housing Authority of the County of Los Angeles, Community Organizations and Internet listings. The outreach will be citywide and reach a diverse racial, ethnic and economic mix. 52i' Drive Apartments - Management Plan Page 5 of 12 2. Resld*M Setecftn The initial rent -up shah be conducted by the Agenrs personnel and supervised by the agent. The Agent shall utilize staff members that are well trained in eligibility requirements, family composition criteria, unit size selection processes, and Owner -approved selection criteria. The resident selection process shall be Implemented In a manner which prevents favoritism and outside influences of any kind In the selection of residents.. The following is a summary of resident selection procedures, using a lottery system: a► An Interest Nat will be created at the time of 52n° Drive Apartment's groundbreaking. b) -Applications and an information page, regarding the apartments and the location of the upcoming lottery, will be mailed to all households on the Interest list approximately 160 days prior to the Certificate of Occupancy date. c) A deadline, approximately 130 days prior the Certificate of Occupancy date, will be set for completed applications to be submitted to Solari Enterprises, Inc. in order to be included in the lottery. d) Only one application per household will be entered Into the lottery drawing. Late, incomplete, duplicate and ineligible applications will not be entered into the lottery drawing. 9) The lottery will be held, approximately 125 days prior to the Certificate of Occupancy dale at a space In the City of Vernon's City Hall, allowing access to those interested In attending. f) All applications wiN be placed Into Individual envelopes. AN applications with a preference will be placed into a container, mixed and pulled one at a time, In random order. After all of the applications with a preference have been drawn, all applications without a preference will be placed Into a container, mixed and pulled one at a time, in random order. (Applicants will not be pre- screened prior to the lottery process). g) As each appllcaWn Is pulled it will be marked in numerical order, Indk;ating the lottery number. h) A preference shall be provided for all applicants who are employed or residing In the City of Vernon or within a 1 mile radius of the development site as measured from the center of the site. 1) AN applicants will be mailed a letter notifying them the lottery took place, inform them of their lottery number and of their preference, if applicable. The letter will also state that a lottery number does not guarantee admission or denial to the community. J) Approximately 120 days prior to the Certificate of Occupancy date initial interview letters will be sent to applicants. Typically we process 3 - 5 applicants per unit (44 units will result in 132 to 220 letters being mailed out). k) Initial interviews will be held at which time the applicants will begin the eligibility process, Including authofting the release of Information, via third-penty verification forms related to income, assets, student status and background check data. 1) Upon determination of eligibility, the applicant will be offered residency, placed on the waiting list or denied. The waiting list will be updated on a regular basis (every six months). Applicants on the waiting list will be required to contact the manager (in writing) at least every 6 months In order to remain on the waiting list: 52nd Drive Apartments - Management Plan Page 6 of 12 m) Any qualified applicants not able to move In will be placed on a wailing list and shall receive a letter Informing them of their status. n) In determining whether to soled an applicant for occupancy, Agent shall apply the same reasonable and objective standards and criteria that It applies In similar affordable apartment developments that it manages, and the prevailing standards and criteria for the management of affordable apartment developments in Los Angeles County. Residents shall not be selected or rejected based upon outside Influences or favoritism of any kind. o) Those applicants not selected for occupancy shall be provided with written notification stating the reasons for their Ineligibility. Such reasons might include but are not limited to the following: over Income, Insufficient Income (inability to pay the rent), and bad credit history (delinquent or unable to pay on accounts, any judgments, or late payments, although applicant is allowed to explain reasons). Those applicants rejected for residency shall be provided with an opportunity to appeal. The appeal process shall allow for the applicant to provide supplemental Information to the application including additional third party verification andfor testimony. p) The Agent shall attempt to contact those households that have been on the waiting list for the longest period of time. If a household cannot be contacted after documented attempts, the Agent shall interview the eligible households that responded to contacts, with preference being given to those households that have been on the waiting list the longest. The Interview shah include not only those Items listed on the Interview Checklist, but shall explain management practices and guidelines. Prospective residents wlh be informed that continued income eligibility and annual income recertification will be required as a condition of occupancy. Applicants who are deemed suitable for occupancy shall have the opportunity to inspect the unit to be rented, shah sign an inspection form and a rental agreement, and shall pay the security deposit. q) Applicants will than be screened In numeric order of the ellgibllNy list. subject to any preferences herein stated, to determine 0 they comply with the secretion criteria to lease a unit If they most the screening and selection criteria they wiN be offered a unh. Note - a lottery will be held each year, approxknatsty 30 days prior to the anniversary date of the date the oerttcate of occupancy Is Issued in similar manner as provided above. The eligibility list In piece at the time a unit becomes vacant will be the list that will be used to screen for an applicant to lease the vacant unit. Those applicants on the current eligibility list will be asked to resubmff an application 60 days prior to the next lottery, Those applicants and any new applicants who have submitted applications prior to the lottery date will be placed In the lottery. The purpose of the annual lottery Is to provide an equal opportunity to a new applicant to gain a unit In the building and to keep the Interest list current with applicants Interested In being a potential resident of the building. 3. The City of Vernon The lottery process and documentation will be made available to repressmadves of the City of Vernon for audit. The City of Vernon will contact Solari Enterprises, Inc. in writing to determine a mutually agreeable date and time for the City to review the process. 4. Appeals Process Applicant's that do not mesY the Resident Selection Criteria will receive a Letter of Ineligibility. Applicants have the right to make a written request to Solar) Enterprises, Inc. within 14 days of recelpt of the letter to request a meeting to discuss their Ineligibility status. Solar) Enterprises, Inc, will review the appeals information and provide a written response within 5 days of the appeals meeting. 5. Pre4)ccupw" Orientation 5e Drive Apartments - Management Plan Page 7 at 12 A preoccupancy orientation program will be provided for applicants during the interview process. If applicants are accepted. at the time of the execution of the lease and payment of security deposit, the Owner and Agent shall reorlent the households on the project. The orientation shall Include a full and detailed review of the project house rules, and will also include a question and answer period during which the residents can become acquainted with each other as wag as the Owner and the Agent. C. Procedures for Determining Residart Eligibility and for Certifying and Annually Recertliying Household Inoorne and Stu 1. Initial Resident EIIgibi ty Steps to determine Initial Income eligibility are described in Section II above. 2. Annual Resident Rwwfflcallon Each household will be Informed during the interview and orientation process of the requirement to have household income and composition re -certified annually. Annual interviews with each household will be scheduled according to a recertification schedule established by the Agent. Every calendar year every household must be re-ceri fled. The re- certi icallon procedure will begin 120 days prior to the required time of completion. The full re- certification process will be almost identical to the initial certification required at move in time. Households determined to exceed the Income limit at the time of their annual recertification, will Invoke the Next Available Unit Rule, as designated by Section 42 of the IRS Code. 3. Resident Occupancy Standards a) Pets: No pets are allowed in 52nd Drive Apartments. b) Permissible Absences: Resident families are required to occupy 52nd Drive Apartments as their primary place of residence. Absences beyond 45 days will be permitted for emergency purposes only, as long as rental payments are kept current during the absence. Requests for absences must be submitted to the Agent in writing, giving the reasons for the absence, the dates of the expected absence, and any o01er material circumstances that might affect the Agent's decision about the appropriateness of the absence. The resident will be notitled in writing of the decision. c) Resident Incapacity: In the event that a resident appears to be incapacitated so as to make self care difficult, the Agent will immediately contact relatives or will contact referral agencies to assist the resident In the event that the resident becomes so Incapacitated as to be unable to care for himself/herself, the County Guardlen's Office may be contacted to determine what facility the resident should be transferred to. d) Lhre-In Attendants: Residents with disabilities severe enough to require live-in attendants shall be required to present written certification from their physician that their disabilities require live-in care. In that event, the unit must be large enough to accommodate the attendant according to published occupancy standards. D. Rent Collection Policies and Procedures 52nd Drive Apartments - Management Plan Page 8 of 12 1. Rent Calculations and Collections The Owner shall agree to the rent for each unit at the time of lease up In advance. The prospective resident household shah be informed of the rent prior to executing a lease. Annual rent Increases, It any, shall be approved subject to approval. Residents shall be Informed of any rent increases at least 30 days prior to their Implementation. Rent collection procedures are defined in Paragraph 8 of the Management Agreement. Typically, rents shall be delivered to the Property Manager. The Property Manager shall provide the resident wlth a receipt and enter the amount paid into the monthly rent receipt journal. Rents shall be collected by the Agent and deposited Into the operating account. All rents shah be due on or before the first working day of each month. Rent is considered delinquent on the second working day of the month. Rents must be paid by cashiers check or money order. No cash will be accepted. 2. Actions for Let* Rents Residents who have not paid their rent by the second working day of the month will be served a Notice to Pay Rent or Quit. Failure to pay rent will result in eviction. The Agent may consult with the Owner prior to initiating any legal action against any residents. The Agent shah provide the attorney with copses of all documents and request that an eviction be scheduled with the court. Eviction proceedings must follow procedures outlined In the California Civil Code. The household will be charged for the cost of any legal actions the Owner incurs due to the actions of the household. 3 Partial Rent Payments Partial rent payments wit not be accepted union specific arrangements with the Agent are made In advance of the time when rent is due. Rem Is due in full on the first working day of each month. 4. Recovery of Damages In Excess of S*cuMty Depose The lull amount of bads rem and damages will first be established Informally and then formally in a Judicial unlawful detainer action so that 52nd Drive Apartments may claim damages as part of the courts judgment. If the damages are slgnhkarrt and the resident's income Is determined sufficient, a collection agency may be contacted to secure the judgment. E. Procedures for Appeal and Grl*vano* Se Drive Apartments - Management Plan Page 9 of 12 1. Eviction Procedures Residents that have violated their lease or other regulations will be given written warnings of the violations. Should the violation continue, the Agent would inform the Owner that they intend to Initiate eviction procedures. Evictions for nonpayment of rent are described In Section ILC (2) above. Eviction for nuisance shag be undertaken when there is documentable evidence (correspondence, witnesses of Illegal activities, polls actions, lease violations, etc.) available that the Agent and the attorney may determine to be winnable in court Court actions typically require six to ten weeks for a decision. Fully contested evictions can take longer, and uncontested evictions, depending upon the workload of the court at the time, may take slightly less time. No rent will be collected during any eviction for non-payment actions. If a resident who is in the process of being evicted for nonpayment of rent desires to pay the rent in full, then the Property Manager shall confer with the Agent to determine whether rent will be accepted. If rent Is accepted, the resident will be required to pay with money order or a cashler's check only. If It Is determined that the resident is chronically late or has a serious nonpayment problem, then the Agent has the option of foregoing the rent and continuing with the eviction if the deadline specified in the Pay Rent or Quit notice has already elapsed. 2. Prou easing Resident Complaint There are occasions when problems may arise and it Is very Important that these problem are discussed Irnmedfately and resolved before they have a chance to become serious. A problem should first be taken to the Property Manager. If the Property Manager does not resolve it, the resident should then contact the Regional Manager. If the problem is not resolved at this level, the resident may submit In writing his/her complaint to the next position of authority, which is the Moe -President / COO for the management firth. Complaints can be mailed or hand delivered to the Agent and can be signed or anonymous. 3. Rubs Violations Residents who violate lease agreements, the projeof s house rules, shad always be notified in writing, with a request to correct or remedy the violation. Duplicate records will be filed in the resident's file, with any responses. If the same or other violation occurs or continues, then the resident will be advised In writing that continued violations may result In eviction. If they 9011 continue, the procedure described in section E (1) above for nuisance violations will be initiated. F. Plans for EnhmwWq Rest Rotations 1. House Rula House rules and regulations are an attachment to the Standard Lease Agreement. These will be reviewed with the residents at the time of the initial interview and during orientation prior to move in. 2. Emergency Procedures AN management stall will be trained In emergency procedures and there will be regularly scheduled fire drdle annually. In addition, an emergency procedure sheet will be developed by the Agent and will be provided to all resident upon move in. This sheet will describe procedures to be followed in the event of fire, earthquake, or other major occurrence requiring emergency action on the part of management staff or residents. Periodic resident meetings will be held to keep residents acquainted with emergency procedures. III. MAINTENANCE AND SECURITY 52n° Drive Apartments - Management Plan Page 10 of 12 A. IdentMcation and Repair of Construction Defects The project architect and the Owners representative will Inspect the project during entire construction process to ensure that no construction defects are missed. ti defects are found, the contractor shall be immediately notified of the defects. Progress payments will not be submitted for payment unless unconditional Ilen releases are attached to the contractor's request. The notice of completion will not be recorded If there are significant defects present. Finally, the contractor's retention will not be paid until all punch -list Items are corrected. If after Owner notification, the contractor fails to correct defects within a reasonable period of time, then the owner shall Inform the contractor that it will disburse funds from the retention In order to cure the defect. The owner shall consult with its attorneys before carrying out this action. B. Identification of Maintenance Staff All routine janitorial work will be completed by the on -site person employed by the Agent Any supplemental or extraordinary Janlorial work that Is required will either be contracted out to a private Janitorial firm or undertaken by an employee of the Agent and billed to the Project as an additional expense. Maintenance work will also be done by an employee of the Agent and billed to the project or contracted out to an outside contractor. Outside contractors will generally be used for emergencies, unusual or specialized repairs, and landscaping. The Agent, according to Paragraph 10 of the Management Agreement, shall contract for work requiring a licensed contractor such as major plumbing, electrical, or mechanical work. C. Preventive Maintenance Schedule A preventative maintenance schedule YAN be prepared and updated by the Agent. The Agent will conrad out for extermination) and peal control services. General services will be performed once a month and for Individual units on an as needed basis. The exterior and interior of the building will be painted every five yeas or as needed. All equipment will be maintained based upon the Individual equipment guidelines. There will be annual Inspections of all unite to determine maintenance needs. Monthly and weekly inspections of the exterior of the complex will also be conducted. D. Resident-Requestsd Maintenance A service call form will be completed by the Property Manager. The Property Manager shall review the requests and determine whether It requires emergency or routine attention. Emergency repairs are those that cause or may cause significant damage, or make any area unsafe or uninhabitable. Every effort will be made to correct emergency repairs within 24 hours. Exceptions to this could be when parts must be ordered to complete the service. Further provisions for repairs are outlined In Paragraph 10 of the Management Agreement and it will be given to the Property Manager. The Property manager will oonsuft with the Regional Manager to decide who will be assigned the work depending on the nature and scope of the work. In the event that damages are resident -caused, the resident will be notified of the amount they will be charged for the actual cost of repals. E. Inspection Forms 590 Drive Apartments - Management Plan Page 11 of 12 Annual unit inspections will be completed and findings will be documented on the agent'e inspection form. F. Schedule of Anticipated Useful Life and ReplacemwvL Item Landscaping Years Useful Life 5-10 Carpet/Flooring 5.10 Kitchen Appliances 10 Common Appliances 10 Root 10-15 Mechanical 25-35 G. Sumellioncs I Controlled Access 52nd Drive Apartments wlil have adequate exterior lighting and controlled access to the common areas surrounding the unite. Surveillance cameras will be Installed within the building, recordings will be able to be recalled based on date and time of a potential event. The recording will be able to be burned to a device that can be provided to the local police department as requested for evidence or for their investigation. Specificaiy, • Exterior Parking lot lighting will be a minimum of 1 foot candle. • Common area courtyards will be a minimum of 2 foot candles. • The community, will be secured with concrete masonry unit wall and fence. • Community entrances and common areas will have eleotronlc controlled access to residents only. • Buildings will be pre -wired for surveillance cameras at all common areas and community site entrances. • Surveillance system will allow for monitoring and recording from a centralized location. • Crime prevention through environmental design strategies have been implemented Into the design. • Signage note surveillance will be posted on the community's main entrances. Language regarding the community being a crime free community, Including no drugs, violence, or crime in general Is included In the lease. Signage will be posted on -site stating the community participates in a crime prevention program. Meetings will be scheduled during the year with the residents and police department to educate residents on acme prevention and to discuss any con cams regarding crime. All persons are responsible to be aware of their surroundings. IV. ATTACHMENTS 1. Standard Lease Form 2. Rules and Regulations 3. Operating Budget 5e Drive Apartments - Management Plan Page 12 of 12 RENTAL AGREEMENT 1. PARRgg AWCOWMA.MUNyi TM prtlr b tlb Apaeswd m: 2. TOM The IntlnlWon at this Apsisme lend be* an and end on Atw M bdol Ism sods. M Ape~ rA corNnw lams of ON tronin "M Unless estamsac* Nrmina W as Wrmnbd by Owapepls 22 of by AWam m. 3. wup The Prided epees to pay t lot M padW moms on" on ARK (hat. Resident tprass is pry a rant at A Per. aldl. Ink amass Is on an M t day of M nad d 22. Tta NO metans tar ln me entings, nP wmal dranpa In M PAW" red only In woordame YA M Vii w frames and der Yuplam and tegul I ratalad to aamabdbn of M Pmywn The landlard apses to N days ad.anlm wawen nab of any bosses In M ResbaMs rod, escape es now In IN 0 od raw amazed M Redlded to regldwd to pry, M dw M me, nwaml Is If - I , md. The tddb.A alb adniesMPwltlra tlwt hdN tawmistrod MLandadbdY S. CHAn FM LAU PAYlwlgr Rat Y the on orbabre M 11 day des month and We when qN on M 2ie day of On wig des PeddM does not pay the tug aneuadthe maaII InWragmpb2bythe addthe Yday des ad MLadledmycollect afee d! on M e day a owsad The landlord way not tanmbuY Ihie Apswned fortalae to pay Yid clrpw bun may tamtnw wis Ap �� of �. e�aptl�alned In pampapn 2a deep d The dmwmd I n this W erWh Is InaadditiontoM Ag It. LOW410DOW NCIMMO CNENP The pmndsw w to be aPwaY I Is woordraw with M rgrYaesn e at M low- helwaq on* Pmgmm tender gaellon 42 of M beesW Reyarmet Code d i9W, es sawded 01w TPloprant' .yDs ells dpes heesadw will be wbpd to M mgL*omwp the wAM be omen arch M Propam b order tR M Landbd b ceslly b talm M uvt d M pramlles Inns 6esle for atattlbn of M laodb1's in ass. The PAINS d edl ceePwele wells mil LAyDUM mtufranres hile11d to gum aarnpsrtut end M IS opew, 7. Y7fOwg IIBI I I I Y dabmdned tes M pw lea am old • clquuAbed brwbcome unk under Seelblt d M (b) d M bsbrrml Pe.e zee Code bamwe M we prod but the PaaldwR IAa M sWkt61e u*V aloawrwa, but M few lees awards M mmmum we atbwed mda 4 -'1 M of M Memm Pewna Cade. 00 Landlad dull IimwdleMy pep b M ReshNm the awud at such ox w, won boded. d M Raddled ed IoW awuples M pranlma when the arts rare delvatim on Y roads, M Landlord shell w Its best dbdsb Ioceb M ResWsd for "poses of mpaybq M asses rat., a. 013"ll" iI OF oaB1AW UWFS By dgrdrrg diAlyawesd. M Pealdwtl aelemwmdpu poll M unl Is aft alert and In good mMtsn. Tha ResYNrd apses tes A dpgarwes and i pnpnwe b M uA w In good wo"I-omca w, ste as desaI eaM WA lnep"W Rapat. ndrtahle d AnwItim No. 1. parapapin 21 a the ow Apmrt. The Resident also aWm the M Landed hm made no pantie to desorw,ale, mpdfra bnprwe aw unit. w.Wpled Aided mod UrAIrrli l PapwL t CHAftgq PCII UfLff= AM 6111111101310 The loWeint tlWf domplew how M 0esf at uWJn and servloes nlabd to 0oagenay of M unit wa be pak. The Restdnm apses ted pweschaY awa to" deaedbe the uti tes and sr.kw paid by M Landbm and odes paid by M RwWae. A. The RUWM mewl poy for M udlees In a duma (1). P"n e s sheald be mods dm* b M eppaplele W14y. oompe y. The tens In wkm (2) No bolded in M Ibslesm's Met. (1) Ad es `Y by NW (2) fVY es Y by snit War Puleeal wpm Usky Whey hrolu" In Held ughill Cod" Walter Chew( I&M IL The Weleed prwbluty MlardbWMamauddbw hebwWMdldeMmd Yates. Shout t Amazed Resided Wye to Landbd In AdMgLffi8W& wWng s Other t t)N It 10. sacupm DWRI) f A aaauap b M wnawt a g shol be red by the Redden at M lints d asaddn d 1 % ApwmM. The wit hold Ms aces ey droll br M pided M Assiclent oaupb the unit. AM M Resided hes .astad M unit. M tarr I wu dawtnIns %nether M P Wed Y dgtis Yr s wNnd d e y or all of M sw:aty deposit. The wnaum of M refund will he dsMmMdbesmdwsee wahMblYMq ededMaw and Pleesddfed. ' A., The ResWM wee be OWN fora rdbod a M sewmy dsPO I only 1 M Reside rd pes.Wad M Landed with a thirty (lip) day odes rates of Were b west, moused by Pwapdph 2% WOW M Resbad.aw umM b god M ro1b for mama bwtwW hlsdes control. u.rdwrrall r 8. Afar Ow PAndena hen vwabd ft wll N Unwind My inspect On unit and oOm11 ana0w Unit Inspection floan. The LandbN WI Pwmit Ow FMSIMW b pankdpots in On aapo law, Y des rbadem Ss ngllaea G The' reAMbYto flwldsNpw Mweadagrrly dapaitboo wy arotw hwededbpy bepal of: 1) Lk"MM ; 2) Ownspw Y1d we rat Ore b m malwas wd bar end w nit Mad n 01e Unit niarnlm PAW dlale loft prarrbes by lto llooft 41Yeba homy, pwba aplma. 4) dwmbOn Chsrpel W for unelumeO" aeancl vers. 0r5;and D. The LaMwd wll rehMd On an ou t cwputad in paraproph 10-C WNa haff"M (21) days Any Ow R~ hoe pnmwwdy vpala' dw unit robrned poaraoan d lea urn to Ow Lwdwd and gMm hMm row addow to pop Landlord The Landoll wll ass loop Yw Rendint a eyaen Mt of dw0aa to were wbNaabd loom to dolia 1. Y On RootooN dne�al with Ore the Lanftd n wd d ca - I the amounts oAOubd Chapeb asks to mad will IM Lwdord. fM Lerdlad anew b B. O more Own one Poraorr herds OW unit. the FIeeldenb apn Oral thy wW wodl au OO dWM d dM3hg ay NMd a" uwrwdvr. TM WWod my Py rduld toany Rwdra fdwAN In paragraph I of ads Apeomem. F. Tlw Raaldsd undwWlW 00 the Lsrdbd will nil awn Ora Slowly Depak to wn4 Ole IM a 0h'a rn or towards repdr abwpef hwndby Yto ll 11 In atmNarp wNh pragph M 11. KEYS AND LOCKS: The Realdanl open not to Wall soh lW W a d8erard Into or ism an any down of Wrdowa at to will WWWA the w whorl On Lardlad wM a keylowlow o rbdr. Who this ApeewmedRrds, O r� b torrdum all lays b nor dwl�bl0 unY10 � Laodsd. The LaMod may darye Oil PMMW 11.001a each key on mimed. t2. MAMICYAM M A. Ths Landlord preaab: - 11 RaWAadY can doamwow enndda anunwYW: L purpaas wwNdo theyere khtorldod: arowlnnowypouda; Ppllo wpoL heoling and adabng oqujanwd a 10. DAM"M W Only" dwlap Is awaad by aaelaeenwe, maun, or apac on lea pal at fa Row. dw. hawhofd meabwa of pride. the Rsaldew apew to py: A. Tlaantdslrepllbwddseawaanwlly(00)dopdwmca"aflto Lwdwls*mWWIWtlonpaYdargnlard 8. Nrl IOr la peOd b WY Is danapM wIMw a not la will to LbbMW, For ay audl Pabd, Ow FISSION apao to Ply Ow had own Onow In paapaph 8 at Oil AWMrWL ta. A. NO'1101r ON ALTMTK M 711a Roddtrn apes not to d0 any at Or faNwAV wiYawlYd odaaihp Yw Lardwda aalnen pem boo: A. L]rapawrdn ay pMdMepplalaa,RnNaaep/pnWY aft LOM S. POW or kow walls por arawwtPow In M unit C. Ausd1 am r orwYltlew guwtla n des ur0l; D. Morn a pan ay Iriaw, aqb, a leraae n 0o bWWAig(s), a ffm Saw, or fhe eomawny wowda; E. Alladh ay SIlolim& aeon down, or aiw pemnwo knprowrwnls n des ur; F. law" woofing maiitoa, d'YorL w1w lwton4 or warldbwn, dWuawar, heeun; or D. Hw any Soma, daonaa or now wedraal asrhrhadlalto an Ow una. is. not tM nY mum be to fYSInN's why paw of nddrfwa. TM Position sholl use da br NmaMllwaW and as In*/A" land on des Cordasion and RmrtllONow of RaokbN pawnwn. The Rwbwa area b pamY aim aldbld is to reatos a obit for a pniod at own I ON WNW ppafa l at M Larldord. The Resided spew upon tl1Nd of salran not to: pounds. These urdw A wil 11 niuile but we M Imiled to M dwa0aaee a ado d whow" Oat I It of aenay lea dwwing Men Pea or wands of any des In to unit 1 FAwe a pomit owaes or aids 00 Wl dean any Mole. phwopph, IeaaWw a motion In Ow common area a an the plan, uw wider awe of Iloptl dalou poll0, or kljny to cow In goo Opmow nn Or an file to keep the worm of tl. "UL M The Rn*M spew to aby des Mow Now, which we AssehaIn No. 2, pngaph fit to Ode ApsannY. TM Rasbsha AwThee rW n readi"aahat' mined to Ilea ft cdinYhw W ftroobbuWlrpq an rid BOW. aortal W mmnlnn d pea FIawdomw 17. RECIIIIWIDATIM Eaeryysornnobwllaledyaf , Ow Larhdad w0 mwW Ow FIootonn to rpon to ramp wd ompcAM of Ow Rwldwrfs bouwMb not b supply wry rover kllarmalOn reauked on rid PuMOM of ddaminft da the doto spar N in lea Lndwds mpm The nrderlyaml w iramMbn In d"Mr* PMWM alplbNNy. TLr NNWM 8WIW bd a1 InhormMon WXII@d by des Rhaeldwa shell be rulh)ed b irapec0' bVFWMWdWmftmftTaXCNMAkesdon0annYaa and otlrr MdYq aparcba A. It the ReddM den rot submill The regubed rapdMMbn I der or lot by Ow dam opedw in the LarWbnh rrq m," Landldd my begoaa des faAp ponsNba The UNWW MY impWAM Ihw parrM N only in scoordnn wNh tw admlddraaw procedures and am trams ybdW in nsnNb-'a and Ahaeuodow re- b be adminafetln a do Rrowsm. I) Rpulw tlM Rpsldal b vaate. B. Tf Rwbent may My" to MOM with the Laridad todocuss any elhalhdn gading fan is mprBkatlon pMovasAhp, . ift e Resident repro. Koch a meoll% aw Ladbd opew to ma wall m RaaNYm and dYauw how the Readwft eodnued Prolmis ellgtly ww dwermbss 18. FA"RrMO CNANOBB UTW MISCIMMM7CATKM The RnldeW obea nay fr LaMod town eitey Y wrNtrq, N des homhNd Wo changes, his a her income Ahaaaaos, Rseidngr) beam a ad bed evident, or begins to me" HLA) waeeeercs. 71'a landed my else no to mmr this Lew N fr, RNK*d beeoralw l, All am andM And fin L.aEbN deNrmMe dud des Rrddw's Wdwd slobs would dsgmNy the houfhold under Nw llarop . Tbe L.arh - mar &*W aw PmWmws rem all a uIMNy dpesw b rAnt tom Rwld"Y eeeaw N t e Ro ddook 'anw s HUDwebeed Rewdwa. it. BOB OF BWBLLMLNM The Resident underaWr I lied unes are realigned aoardYg to fr 010 of Ill household. M Its Resides Is or become o4bb fen a 11 . on unit, and tw ngiWd elf unit became evadable. the fbeWre spun tin A. MovewWbdit(3a)drysaWmLrdYdrhefnhanAWtlrt■nitatomhpuiMstesYsvallsbeewbnawcanmuny; Of B. Vapdsfaeahmm"y, 20. fNawrablesomabl,otlenaIKa1WnsM bKnwr de ra rscaq who wnrprry eNuatleW dw shhch war, sewn aunrrkw by to Landlord. to whrr tlw NO. nit egrw b Peat des landed to allow, Ill ud to emr Ibe ud b dsaa - Nmcdd, now OF abendo 21. NBCMMNIATONPRONBR®r The Laflordapraw not we dddraWb based upon race. WMW &ON YmfYl Naow, daabBy, now. religion, ran. 2t. CHANGE If =UAL AgMiMMh The LIN I May ohwq din temp and arhdNorb of tlW Agreement. The Landlord mow naly the Rolfd. The fbatlaha may earth ab dW4W bulb and pwdldpW by elpiV tlw new ApMnM Or the wpadmnt W On edNbhg ApwrnaN and br LaMaA T1waa RUM" May Nita aw abwnped Waft ad sad kn byM PAM the Landlord bn make tlhd hhaMbq N b Its Imnds to Wl,inela fw W W—. Tho RWdwd mho oho auoh wnoa N YM tddy (701 drys babN ty PNpWatl ahanpa will go bap etnl. a the Resident dew not accept tin wMabd psamnt, the Wallowed mar Nt1db one RnWnt to am ban iW ocaum y,aspra.. fn Parfpaph 21L 2L TERMTMOFIVNANM. AM b hit a/ yM tl-pin Vw temp, tlw Rfldwd mar nely sw taMad a Imo b crab Keen Wray (JO) esye aaWn nNW. A. To hmihate ads ABNW Wa, Ow Reach" must gab tr Lwd W Wty (OM darya WMM new bNap ww' kon tw uNa. 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C. N des Landlord prepses w eermobY Ihtt ApesmM raw Landlord spar to on des Rrpldsnt wean aura of far propaM twmbdkNL a tin Landed ee immindiq Mee ApKwM6 tar atwr plod dare. tlr Ynhaiwl o nWw mwl be rwslvsd by row feesldard N load Wy (301 days bsbw tlr des tar RKeld" ad be nquAd b vawee tram tlw hML NoaAre nt pnepesrd termination IN who moon mud be given In smwdrwa Min any tbra theme M ferih in Bab and laced Im C. 0 On @ ONia Is kdO M, dw Lwdwd 119104111110 rely ayWon MOONMOON,p Grounds lIn Ibe eeWeenaW allied alm regNwd by AlparIs 0" ls Mlsw mrwb 1) dpaalyawdw WSApasMwd Mlbe Wmlflba{ 2) Slob the you da W tennhnsses vM anoegh ddd be Iho Ibddsrn ee ""we s dalKWr, 4 N OlI NMldwa wbwwa@mmswegp b d�ruu p�bpOHd WWmkMM d Ns I.aw AGawW1, if Laded ogees b mom and dYarf lib Ynrinslosr wdh line Rnldwr B. AtlaWy Pala CNlsdw pef:bpryselten or phpfMbp arla^d ad of tlhY apsanerN, farpmvdlngpagswbo entYleO to twwaap adoMWI ten old OWIL Rseldrd also add wlatlpw OW Lando my beegver RfWnfs account to s ant. . apny in the owN and aw Mdded-faits to play any and all- - due dm v*.*A and In such ovwa, Resident PAY tar swviw bs(s) / OWWM Iw(N that o ahwtsd b Hall 1, by dr ealKean sp wy by caaoWon 24. CMURMBACKOROO1pa/YBB MTICN: � �r Wa Leass. b bea On d RooWays ImalMp, Warrtlw Raid" nor ay obnpnt ofant tbessl, isabIWtls mrsapddn a writ warrant. The Rssld" hwsby authaves tbe Landlord to frlam a criminal bulgrourd bbi pd One Readend or any oaf of the humbold In to svere tar Ladbd b its Yell, jWcna on, hw "won lu a)M' owupis snppW In cftW K#Aly b Itr howetmb a d dw Cwwwady. upr uvvnl 25. THE I@JOWWS F&PM WA7MW TO LAOLOR7 TM RMdW rarpaarb W wrrmN tlW all INpmmrl pmvkW b Lwdo4 Mldtlr n tlr lacnnadod provided In dw applbrbn Inr to raga a dr AparlM (tlw •Apylkdr). N Wa, cpmpbb W owmm a areV so mallon On Mission provldss r LaMad N dawhwd b b IaW, dw Rea10rR wE b b real a db Lem. This Msdaa un*m wds_ and m agr Iha dw AppdeNNn Is hers"rrr/p Is pal ddw Lwa. W a bwmh a any mpramnbdoe dWin wam dw Application shad be a breach of toil Lamis. This Radmw Noah el urldrbap. r pamM Wftw hovaishnld or puaW to umlanMd Any harWous acr or do urydd^g owl dd Ina"" liss drmmadpo Y ow= pmmbrm& d do dal Is danragu by law, was. a ran da to grid dW pal unit canny Iw IhW N, W dr d,Inap Is not pwssd r moil wow by Ow Ruld116 db Rpabaa will be mopwo m rr red only upb tlw dab adw dmbrlm. Admdo W tad fold nol amne uad U* uta has bsm mphadto o avabb crdMbn. 27. PEEALTEIE FOR SUBMITTING FALSE IMOMAATM Now Rmbad I I "belt rim Idrnrtle ndudh 0Im hunts campwillen r odw dab on wWM the Madwys 81oft r bmad.lw larldbd mAy rams dw R IMWID veer. 28. CMMFRQCOIEE WV' in unadaratlm a tM slwtlnbn « mrlswa a . Law. «a dw dwalllrlo uNt Idarddfsd b dw Lisw, dr Iordlod and RsawM Noma ap Iolowr A. T4 Raabad, Any mamba a Aw Rmdrlys hwsaWA a pea a dhr prwp Undr the RuWm b r_«drd sell .ra nag to Psisaand aypymall of do Ohl In Yaps/ ar"vm a moir Kok* dW daaalpm dr hsaM a I drug romm plying aomlry an or «my Yw1 a Dorm prawn uMa the dwslaq fiat to be wild tr, a to Nolalab, crMrmi tlw imwb w ongoging in wall adhby Is a mparr of or parson Us* db RW~o enra shod not w pp in ace a wawcs or gasp. of vwale, In aArE, but nr rlldad IN the tma daolwp of Iherma. on r nrd F. VAWMdNMI AWN ttMMN*Wbe■mWda vbWNn a the low Wprd arms for TERNINATION OF TENANCY. A anal vldIan a try of Its abam paddab era be dsarlyd Is mdws vldidw W a mpWa mown km wl h Ina Lamp. U i m oft foil is poNdad by bvh tm d d rbbdm Nish nd m4uW OMna comlodis% to adl be by a praprldrrlmatlw sdd111e. 29. ORUE tAet CO WrYt UMr caEanr umdbfdTarnt Law. Its ddmd W do Pend Coda W dw Wa M i of dw formal Aglwm . rd INS aaadm c powrN4 LIM Nab r dWrbuam d E prsnd m of dris spYarn err P, WE no sob. ambulon rddvwy of INGO amp a drop W clra aaraW adWIIGa m I is oardmld an Inarabb vftlb dram mrmkw Nbppda salon br your wNdon. 7be VWWR6 bbrd a foWw In r abed dw v arils mud In your apwNwd for Its um. 30. CALMM M►ARnI OF JtWfNX MAIL COW NOTFICA71OIk 71w CaEamla Doprbwm a JuWua, dwWt dopUMWML pole daparwnr savbtlg yrh0lo"ll Of 2W.WD Is map W MOW alw I«d IN W lossrrlwa WWWWw aahmar, for pubft aeon/. a dalisbaM Of dw bulbs d prmrr foqullm b nplwr plrawm b pamprapb Idl a wbdMam W a tbdNn 210.a a Itr Pane coda. TM dwbw r updwd isn a qumany baab W r a Noire a Irllolrllrlon abar1l tlw pfosaw a owe tlAvldtrala b.ro naphirrhpod. 71w OapMwM a Juistle allo rubaar • 9ar CMIdw NaNYNalon Ue 1lsouar aaell Irpryrbm about apaddd brdNOlrW My w dwddrp. Inbrmalrr rogwdllom%o' ,rlasds rMavodaWagnasharmllOr pwna mmb. 31. CownwoaTMBAORmum. 71W A,gmm W b Attrdmmb mars up do Nam Agmmled .slow the w R=Wm a Ludrd fopadno In uN. It my can 6elwmpuftulu peAsim of Wa AWmmd to be bvaW.r nrgaLY dwr umwIII Oft Apr so 0 WE mmWr In Nlml W bob Aw Lanrrd W dw ResNad WE owe to be bead by Own. 32. ATTACMDTOMGAEdEP W: TIw Rea' I lord in psrNpaph 1 a ar agmewe d, caft My haw IpnalvaA a cmW of MAI Apmmism W do WWI Atlmlmraa 10 tk Apwmad W uuaauW OW dlws Atlarmmb we pan a IND parnarA A. AOadnews Nu.1-Unlarpedoo Rispom _ InWb _InNNN _h%* _InNaN B. Adllabllam Na. 2-Nara Rolm (E ally). - Ind(ab _loom _ Wo _ InENIis U AUTHOII M RBOBTfSs Till baoa%bEvhaals N the •oalr autlrarbAU pear lo roods In dw Ind. 34. SIONATURHd Slprrrfo of Naad of Howahod: SloAbm a Spwm or C*4bm: Sgrwtum all dhr ""Mom Slpwrrs a COW RaaaatC LardbWAWwdau Aged: Dab: DW: Dada: Dar. Dar. 52nd Drive Apartments Rules and Regulations The staff at 52ne Drive Apartments strive to make your living experience here pleasant and comfortable. The following regulations were designed for your comfort and convenience, as well as your neighbors. We wish to take this opportunity to tell you about them: "Premises' as used in the Rules and Regulations include not only the apartment but all of the land and improvements Including parking lots, driveways and common areas privately owned by the Owner/Agent and generally referred to as the apartment community. SECTION A. PROPERTY/ MOVE -IN INFORMATION 1. Office Hours: The Rental Office is open on the days posted. Office hours are as posted on the office and/or on the bulletin board. In case of emergency, Management may be contacted after office hours via answering service/ pager system. 2. Rent Collections: All rents are due and payable to Management at the Rental Office on or before the first day of each month. Please make check or money order payable to the apartment community. Cash payments are not accepted. 3. Late Charges: All rents are collected on the third (31 day of the month or thereafter are subject to a late fee of as specified in your rental agreement Rent is due on the first day of the month. Late payment after the first. day of the month is a courtesy and should not be abused. Three late payments in a twelve (12) month period is considered material non compliance for chronic late payment of renL Collection of Late Rent: 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 Quit will be served, depending on the funding source at your community. b. Unlawful Detalner Action will be initiated. 4. Returned / NSF Checks: if a Resident has one returned check. Resident will be notified that Management will not accept any further personal checks, and rents thereafter wig have to be paid 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 check that is returned is subject to a $25,00 processing fee in addition to the late charge. 5. Lost Keys / Lockouts: Residents locked out after office hours will be charged a fee of $25 to have their door opened or Resident may call a locksmith at resident's expense to open the door. Locks will be changed for a fee of $25 per look. Door and mailbox keys must be returned to Management when Resident vacates. Pagel of 1 ResideWs Inftlals _ _ 6. Extended Absences: Resident should advise Management of any planned absence for an extended period of time. "House -sitters" are not permitted without prior written consent of management 7. Mail and Newspapers: Only registered Residents are to receive mail. All mail must contain the full address of your residence, which includes the apartment number as well as the building number (if applicable). Unwanted or 'throw -away" advertising should be disposed of properly. S. Apartment Inspection: Residents are required to accompany and assist the Management staff in the completion of an apartment move -In inspection form. This form is designed to record the condition of the apartment at the time of move -in and to help determine the final disposition of the security deposit after terminating residency. BI-Annually, Management will enter each apartment for inspection and will also check the smoke detector(s) and replace the air oonditioner/heater air filter, to properly maintain the unit's equipment. Each resident wi8 be notified of the inspections with a written notice 24 hours in advance. Upon vacating, Resident is entitled to an inspection of the apartment to assess move -out charges. Resident will be given a minimum of a 48-hour notice prior to the inspection. Resident will have the right to be present for the inspection, approve for management to conduct the inspection without being present, or waive the right to the inspection. 9. Water Furniture: Waterbeds are permitted only in accordance with California law which insurance protecting owner in an amount not less that $100,000, and an increase in your deposit equal to one -hall month's rent. Resident must also install, maintain and dismantle the bed In acoondanoe with Industry standards. Resident may not have on the premises an aquarium or any equivalent typs of device with a capacity in excess of ten (10) gallons without prior written consent of landlord. SECTION S: USE OF PREMISES: 10.Utilky Service: Utility service must be maintained in resident'a apartment, at residents expense AT ALL TIMES. Resident also agrees to cooperate with enemy conservation measures. Failure to maintain utility services or to cooperate with energy conservation measures will be considered cause for termination of residency. 11. Smoke Detector: Smoke detection device has been installed in each apartment. It is the Resident's responsibility during residency to periodically test the device. Resident must inform the Management Representative immediately in writing of any defect, malfunction or failure of any detector(s). Removing or tampering with a smoke detector will be considered cause for termination of residency. Pop 2 of 2 Resldenrs Initials Upditd 09J19 12.Unsafs Conditions: Resident agrees to report immediately to Management any accident, injury, damage or loss, or need of service or repairs to water or gas pipes, electrical writing, drains, toilets, fixtures, or any other property or equipment covered by the lease, including all breakage, damage, or loss of any kind including but not limited to water intrusion, water leaks or moisture problems of any kind, damage from overflow of water from sinks, bathtubs, toilets, or other basins. Resident further agrees to immediately notify Management of unsafe conditions in the common areas and grounds of the premises which may lead to damage or injury. 13.Alteratfons or Additions: Resident shall not make any alterations or additions to the premises. If any repairs, alterations or additions are necessary, Resident shall notity Management in writing, Resident shall make no repairs, alterations, exterior alterations Include but are not limited to posting of signs, flags, plants on ledges and wind chimes, addition to the dwelling structure inside or out without first obtaining written consent from Management. American flap may be displayed within the laws of the state and proper flag etiquette. Interior alterations include but are not limited to, changing light fixtures, painting, hanging wallpaper, etc. 14.Outward Appearance: Alterations that affect the apartment community's outward appearance, such as installing personal window coverings, foil on windows, towels, blankets or clothing draped over balconies or partitions is not permitted. Signs or advertising materials will not be permitted to be posted. No foil, sign advertisements, poster, or similar display, shall be affixed to any door, window or exterior wall that may be visible from the outside of the building by other residents. 15.Antennas: The Federal Communications Commission states that Residents have a limited right to install a satellite dish or receiving antenna within the leased premises. Management is allowed to impose reasonable restrictions to such Installation. All requests for installation must be submitted to Management in writing. The rental agreement must be amended to incorporate requirements and restrictions prior to any installation. For information on requirements and restrictions, contact Management. Resident shall not Install any external television or radio reception device nor climb or have others climb upon the roof. A separate deposit Is required prior to installation. 16. BBOs: Due to fire and other safety hazard concerns, no charcoal briquette barbeque grills, gas or propane grills, cooking/heating Instruments, smokers, hibachi grille, portable gas stoves, electric coil grills, etc. are to be stored or operated in the apartments or on patios, balconies or breezeway areas. Any use of open flame is prohibited including but not limited to barbeques and torches. 17. Windows and/or Screens: Residents shad be responsible for replacement and/or repair of windows and/or screens damaged or removed by resident, members of Resident's household or guests. 18.8usiness: Resident shah not use the promises or permit their premises to be used for any business purpose, without the prior written consent of Management. Pape 3 of 3 Resident's Initials l�XAb W19 19. Locks: Residents shall not alter any lock or install a new lock or knocker on any door of the premises without the written consent of Management; and if installed, they shall not be removed. In such case consent is given Resident shall provide Management with a key for the use of Management, pursuant to Management's right to access to the premises. Locks or chains must be left in place when Resident vacates. 20. Equipment: No personal dish -washing machine, clothes washing machine, clothes dryer or other large appliances is permitted in the apartment without prior written consent of management. 21. Parcels: Resident is responsible for making arrangements for parcel delivery that does not fit in the provided mail receptacle. Management representatives are not authorized to sign for parcels. This includes parcels from UPS, Federal Express, U.S. Postal Service or other mail and delivery services. SECTION C: USE OF COMMON AREAS 22.The common area entrances, walkways, parking lots and landscaped areas shall not be obstructed in any manner nor used for storage or any other purpose other than that for which they were designed. No flea markets, yard sales, consuming alcoholic beverages, etc. are permitted In the common areas. 23. Notices by Residents must be approved by Management and may be posted only in the laundry rooms and only on the bulletin boards provided for that purpose. Management will regulate and approve all Items that are to be placed on the bulletin boards. 24.The Community Room is provided for the exclusive use of the Community's Residents and their accompanied guests. Most facilities are available when the facility is open and are to be used at the Residents own risk. Residents wanting to use the Community Room for private parties may do so by reserving the room, completing the Community Room Agreement, and placing a cleaning deposit. Any person(s) creating a disturbance or using disorderly conduct in the Community Room will be restricted from the area Residents will be responsible for their household members and guests at all times and liable for any and all damages to the Community Room. 25.Nothing shall be placed or left overnight in the common area, nor shall any linen, clothing, curtains, rugs, mops, or other items be shaken or hung on or any window, door, railing, or balcony. 26.AA flowerpots on the balconies and in apartments must have a drainage dish underneath to prevent water damage. No plants may be placed on the railings. 27. Bicycles shall be stored only in the apartments or in the bicycle racks. Bicycle riding Is not allowed within the complex. This includes the walkways and grass areas. Skateboard riding, scooter riding and rclerblading are also not allowed within the complex, this includes walkways and parking tot areas. Pape 4 0 4 Resident's Initials Vpdapd 02/13 2& The mailbox area is to be kept clean and free 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 shall be swept or thrown out of windows or over balconies of the buildings. Mops, brooms, towels, bicycles and similar items may not be left on patios/bekwnies. 31.The patio/balcony cannot be used as a storage area and must be kept in a clean and sanitary condition at all times. 32.The open space around the building has been provided for your use and enjoyment. Any activity that may damage the lawn, plantings, etc., is prohibited and any damaged will be charged to the responsible Resident. 33.No items, including but not limited to, outdoor furniture or children's wading pools, shall remain overnight In the common areas. 34.Management is not responsible for any lost or missing articles of Residents or guests. 35.Great care should be taken when moving furniture on the premises. Any damage to the premises will be charged to the responsible Resident. Damage to the premises will be charged to the responsible Resident SECTION D: MAINTENANCE/DAMAGE 36. Emergendes: Emergencies affecting the premises should be promptly reported to Management. Please report emergencies occurring alter office hours to the emergency number as posted at the Rental Office. Residents are cautioned to use discretion in reporting emergencies after office hours, as only emergencies will receive attention after regular hours. 37. Service Requests: Routine requests for maintenance will be given to Management in writing whenever possible, including permission to enter in Resident's absence or a request for appointment. Scheduled appointments will be set In a 4 hour window. Management has the right to enter it Management believes an emergency exists. Resident agrees to promptly report need of service or repairs to the property or equipment covered by the lease, including unsafe conditions in the common areas and grounds of the premises that may be a threat to health and safety or lead to damage or injury. 24.Sewer Stoppages: The sewer system is adequate to handle all normal waste, but the system will not handle disposable diapers, feminine products or other such refuse. Addition of toilet cleansing tabs can cause stoppage. Stoppages resulting from alterations to equipment, addition of commercial deodorizer and/or resident's negligence will be cleared at Resident's expense. Page 5 of 5 Resident's Initials L"sW O?A3 SECTION E: HOUSEKEEPING 25. Standards: Resident shall keep the interior of the apartment clean according to good housekeeping standards. This includes maintaining all utility services. Resident will assume full responsibility for keeping their patio, entry doors, entrance walkways, porches, patios and"balconies area cleaned, neatly arranged and free from unsightly or unused Items. Resident shall keep the premises and such other area as may be assigned for Resident's exclusive use, including but not limited to, the apartment fixtures, appliances, entry doors, windows and screens, sidewalks, parking space(s) and grounds, in a clean, safe and sanitary condition. Resident shall refrain from shaking, cleaning, hanging clothes, towels, rugs or other personal property from windows, balconies or railings. 26.Prevention of Moisture Problems: Moisture problems must be prevented and treated immediately to prevent mold. Proper ventilation is essential for preventing mold. If you should have mold develop on windows, wells, or ceilings, or a musty odor is present In the carpeting, report these conditions to the rental office immediately including the window tracks. Condensation, which develops on windows from indoor moisture, must be wiped down immediately including the window tracks. Condensation on windows indicates that fresh air is not being circulated in the home to prevent moisture buildup. Open your windows and air out your home for short periods of time to keep fresh air present. Excessive running of your heater will cause condensation In your home. Report any running or dripping faucets, plumbing leaks, roof leaks, discoloration of walls or water intrusion immediately to the rental office. 27.Pest Control: Resident shall report the need for pest control to Management Resident agrees to cooperate with the pest control service and abide by guidelines given by the pest control service or management. 28. Heahh and Safety: Resident agrees to comply with all obligations imposed upon Residents by applicable provisions of State and local building and housing codes materially affecting health and safety, including maintaining adequate housekeeping standards. 29.Storage: Garbage cans, bottles, brooms, mops, toys, bicycles, fitness equipment, cardboard boxes, household furniture, and similar personal property are to be kept inside the apartment or appropriately designated storage areas and out of view. Patios and/or balconies are to be used for patio furniture only. Areas located outside front doors or on stairway landings are part of the common area and cannot be used for storage. 30.Smoking: Smoking is not permitted in the unit, common areas or grounds of the community as a whole. Interference with other resident's rights to the enjoyment of the premises as a result of smoking may be grounds for termination of residency. Page 6 of 6 Residenre Inklals UptleNE 02M3 31. Household Odors: Resident acknowledges that odors caused by cooking or use of strong chemicals will not Interfere with other residents rights to the quiet enjoyment of the premises. A resident agrees to utilize proper fans and ventilation when cooking. 32.Trash: Resident shall deliver and place all garbage and trash in proper bins at designated locations. M the bin you normally use Is full, please use another bin. To maximize avallable space, please break down large objects such as cardboard boxes. Trash bins and/or enclosures are not to be used for large items such as furniture, etc. Removal of large items, such as fumilure, from the premises is Resident's responsibility. 33. Recycling: Resident agrees to comply with all present and future laws, orders and regulations of all state, federal, municipal and local governments regarding the collection, sorting, separating and recyciing of waste products, garbage, refuse and trash. SECTION F: SUPERVISION HOUSEHOLD MEMBER/ VISITORS/ GUESTS 34. Guests: Guests staying in excess of 72 hours must register with the office. Resident may be permitted to have a guest(s) visit their household. However, any adult person(s) making reoccurring visits or one continuous visit of 14 days and nights in a 45 day period without consent of Management is a violation of the lease. Persons receiving mail to the premises will be considered occupants. All adult household members must submit a completed application and quality for residency. 35.Supervision: Resident agrees that Resident is responsible for the conduct of any member of their household, visitors and guests, and agrees to pay for any damage to the premises caused by member of household or guests. Resident shall prevent household members or guests from tampering, in any way, with the landscape, sprinkler system or plants, shrubbery, trees or equipment that is appurtenant to the premises. 36.Waikways: Resident shall not store nor allow any personal household property outside the apartment in a manner that may be detrimental to the appearance of the premises or Interfere with free passage upon any street or sidewalk In the premises. Walkways are for pedestrian use. No bicycling, roller skating or in -line skating, skateboarding, coaster riding, etc. is allowed on walkways. Walkways are to be kept clear of toys, bicycles, etc. 37. Wading Pools: Use of wading pools on the premises is prohibited. SECTION G: CONDUCT 38.1-oltering: Residents, household members or guests shall not loiter outside the apartments, after 10.00 PM Residents shall conduct themselves, and cause other persons who are on the premises with their consent to conduct themselves in a manner, which will be conductive to maintaining the premises in a decent, safe, and sanitary condition; and to promote the quiet enjoyment of the premises for all residents. Resident will not make, or cause to be made, or permit any disturbance or loud noises in or on the premises, street, or common areas. Page 7 of 7 Reskimrs Initials UPMW avia 39.Noise: Residents, household members and guests shall not make or allow to be made any disturbing noises upon the premises by Resident, household members or guests, etc., nor permit anything to be done by such persons that will Interfere with the rights, comforts, or convenience of other Residents. Residents, household members and guests are advised to take care when approaching and leaving their apartment during the quiet time between the hours of 10:00 pm and the following 8:00 am and show consideration of other residents at all times. No Resident shall play upon or allow to be played upon, any musical instrument or operate or allow to be operated audio equipment, radio, or television In or on the premises between the hours of 10:00 pm and the following 8:00 am, if the same shall disturb or annoy other occupants of the Apartment Community. 40.Threats / Offensive Conduct To assist in ensuring the safety and quiet enjoyment of all tenants, Residents, household members and guests shall not engage in offensive conduct or language on or about the premises. Resident, all members of the Resident's household and guests shall not cause or threaten to cause serious physical Injury to another person on the premises, or be involved in a fight while on the premises; commit abuse upon any person on the premises, and will abstain from any activity which impairs the physical or social environment of the premises. 41.Alcohol / Public Intoxication: Resident shall not, and Resident shalt take reasonable action to prevent all members of Resident's household and guests from, drinking alcoholic beverages or using Illegal substances In or on common areas, walkways or streets of the premises, or in vehicles parked or moving on the premises. 42.I1legal Activity: Resident, any member of the Resident's household, or a guest or other person under the Residents control shall not engage in illegal or criminal activty, nor in any act intended to faciNtate illegal or criminal activity, including gang or drug -related illegal or criminal activity, on or near the premises. Resident, all members of the Resident's household and guests shall not engage in the manufacture, sale, or distribution of illegal drugs or be under the influence of any controlled or illegal substance at any location, whether on or near the premises or otherwise, nor permit the dwelling unit to be used for, or to facilitate, any illegal or criminal activity. 43.Acts of Violence: Resident or members of the household or guests shall not engage in any acts of violence including but not limited to the display of brandishing, or using in a threatening manner, any dangerous weapons or objects in or about the premises. Resident shall not keep or use on or about the premises or project any explosive, flammable, or repellent device, or otherwise dangerous device, and to take every care and precaution to prevent fires. Page 8 of 8 Resident's InfflWs SECTION H: VECHICLES: 44. Parking / Speed Limits: Resident shall observe, and cause all members of Resident's household and guests to observe, the posted speed limits on drives in the premises, to park and cause members of Residents household and guests to park only in assigned parking areas; not to block access for emergency vehicles, or to other residences, and not drive, or park any vehicle on the lawn, driveway, or other areas for common use in the premises. Resident agrees that any vehicle that Is Improperly 'parked, or in violation of vehicle or parking policies without written permission of Management may be removed at the expense of the vehicle's owner. Assianed Parkin: Residents will have assigned parking space(s), that is be used by the registered vehicle. 45. Vehicle Registration: Resident shall register as household vehicles with Management. Resident agrees to provide vehicle information (licenses number, make, model, etc.) and provide updated information In the event of changes. Vehicles on the premises must be currently registered and properly Insured according to state law. 46. Motorcycles / Trailers / Boats / RVs: Motorcycles are considered vehicles and must be parked in an appropriately designated parking space. Motorcycles may not be parked on the sidewalks, in stairwells, on patios, on porches or in any other area not designated for the parking of vehicles. No recreational vehicles, traliers or boats are allowed on the premises except with written consent on Management. 47.Inoperable Vehicles: Vehicle maintenance on the premises is. prohibited. Residents and/or guests shall not park vehicles In a state of disrepair on premises. This includes operational vehicles leaking on parking surfaces. Leaks and spills and/or damages caused by same are the responsibility of Resident. The owner of any vehicle that leaks oil In the parking lot will be held responsible for dean -up and/or damage charges. Non -operable vehicles may be removed at the expense of the vehicles owner. 48.Washing Vehicles: Residents may wash or spray off vehicles only in designated areas of the premises. Resident will make every effort to not waste water if a designated area exists. If no designated area exists, Residents may not wash or spray off vehicles anywhere on the premises SECTION I: PETS: 49. Pets: No pets are allowed in the apartment community. SECTION J: MOVE -OUT INFORMATION: 50. Personal Property, Resident agrees to remove all personal properly when vacating the premises. All personal property left on the premises when the apartment is vacated shall be deemed to be property abandoned by Resident and may be disposed of according to law. All personal property removed from the premises at the time of physical eviction of Resident shall deemed abandoned if not claimed with the time prescribed by law, and may be disposed of by Management according to law thereafter. Page 9 0l 9 Resident's InUs UpdMW MM2 51I.Move-out Charges: Residents will be charged for damage to the apartment beyond "normal wear and tear". Repair and replacement damages will be determined by Management. Please see your Check-in/Check-out sheet for additional Information concerning this matter. SECTION K: HOLD HARMLESS AND WAIVER: 52. Deposits: Deposits will be refunded when ALL keys are returned and premises are vacated and the apartment is lift in the same general condition as when first occupied, with the exception of normal wear and tear, in accordance with state law. 53.Insurance: No insurance is provided by Management for Resident's personal property or additional living expenses. Resident agrees to indemnify and hold Management harmless and in no way accountable for any liability for personal Injury or property damage caused or permitted by Resident or any other person on the premises with Residents consent except as may be caused by the negligence of Management. The Residents hereby advised and understand that the personal property of the Resident is not insured by the Management for either damage or loss, and the Management aseumes no liability for any such loss. Management recommends that the resident secure insurance to protect him/herself and his/her property. Management recommends resident maintain at their expense a standard type of renters homeowner insurance policy or its equivalent, issued by a licensed Insurance company of resident's selection which provides limits of liability of at lease $25,000 personal liability. In accordance with Provision #16 of the Lease Agreement, these Rules and Regulations are part of your Lease Agreement. Resident Signature Resident Signature Resident Signature Resident Signature Management Representative Page 10 of 10 Date Date Date Date Date Resident's Inidafs L"RW OV13 4675 52nd Drive OPERA71NO EXPENSES jEjPrW 2� Expenses: Salaries & Beneft Manager f 33,000 Employee Apartment f 15,508 Employee Burden $ 9,240 Total Salaries 3 Beneft f 57,746 Administrative f 4,000 AdvertisingiMarketing f 2,000 Repairs S Malnt. Maintenance Manager f 20,000 Painting & Clearing f 11,250 Repairs & Mains f 11,250 Total Admin, Repairs & Mainten f 46,500 Contract Services Fire Sprinkler/Alarm Service Trash Pest Control Landecape/Grounds Maintenance Security Monitor Total Contract Services U81111" Electric Water d Sewer Gas Total Ut516es Management Fees LegayAudit Real Estate Taxes Insurance Replacement Reserves AcOvfly Fee Total Other Total Expenses $ 14,626 f 14,850 f 13,950 f 43A25 f 257,660 11x:4:18.10 8 PERMITTED LENDERS AND INVESTORS 1. Construction Lender/Mortgagee: Bank of America, N.A. 2. Permanent Lender/Mortgagee: California Community Reinvestment Corporation 3. Tax Credit Partner: Investor Limited Partner: Bank of America, N.A. Special Limited Partner: Banc of America CDC Special Holding Company, Inc. E-1