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HomeMy WebLinkAboutC-6377 - Affordable Housing Agreement and Joint Escrow InstructionsAFFORDABLE HOUSING AGREEMENT AND JOINT ESCROW INSTRUCTIONS by and between CITY OF NEWPORT BEACH, a California municipal corporation and charter city and COMMUNITY DEVELOPMENT PARTNERS, a California corporation TABLE OF CONTENTS � I��������� � G»EEmuuNT...,^..1 1.1 Purpose VfAgreement ............................................................................... 1.2 The Site 1.3 Parties kothe Agreement...—.~..—.....~.--,...._..—._^..`. 2 ].3] The City _,,_,,_,,.__,._,,,,_,,,~,,,,_,_`,,`,_,~,,,,.,. } �? 7�� � � Developer ..—...,,,,,,,°.,,,,,.,,_,_,,,,,,^,,,,,,_,,,2 � }4 �u���u� .......—.—...~...~.^..—.—._...—^.—..—...—..�2 1.5 Prohibition Against iuOwnership, Ma8ageUuot8od Control of Developer and Prohibition Against Transfer 0fthe Site ............................................................... 6 1.6 Representations bythe Developer ............................................................ 7 1.7 Representations bvthe City ...................................................................... Y 2. FINANCING ................................................................................................................... lo 7] 'o Financing Plan .................................................................... ]0 2.}.l couou4� of-tnTouu .........~^..-.~....—....—................l0 2.1.2 City Acquisition Asviatanuc.-......~....,.—.—......—.~,.—..]0 2].] Other Developer Financing for the Project ............................................. l0 7]/4 Project Project Pro Forma ......................................................... ]] 2.1.5 Developer Submittals .............................................................................. }] 2.2 City's Disbursement of City Acquisition Assistance and Escrow Instructions 12 2.2.1 City Acquisition Assistance Funding Conditions ................................... l2 2.2.2 Escrow Instructions ................................................................................. }2 2�� \���v�' � � .... 17 2.2.4 Failure VfConditions Precedent; Termination ........................................ ]7 � 2] 7.�l�}nooruu�� ~^^^~^^^~^^^^`^^^^—~—^^—^^^^~^^,..—...,...l8 24 � Subordination .......................................................................................... l8 ] � 1Jbl/ <���}���lT� ^u/��"ou���� .-...—^...,.....~.^......`......,.......l8 3.l Scope of _--�- Development ............................................................................ ]8 3.2 Changes UoScope of Development ......................................................... 18 � ]� Cost Of / Development .............................................................................. l9 3/4 Tenancy During Development and Relocation Costs ............................. ]4 Developer shall be responsible for and bear all costs of relocation 0FAffordable Housing Unit tenants, necessary. Developer �d uro��oo��u(x�u&����z�uhurgcdto6nytenuo[0fu8 Affordable Housing Unit until such time aSthe Release ofConstruction Covenants has been issued. }8 3.5 Construction Contract; Construction Schedule ....................................... ]9 � 3� Indemnity ................................................................................................ l4 3.7 City and Other Governmental Agency Permits ...................................... l9 ]8 � of}�oo�SS xuE;/w —.,...,..~^.`—^^^~^--^~--~^^~^^^~^^^~^20 3.9 Local, State and Federal Laws ................................................................ 2V 310 Taxes and 882/036753-0/23 2765748.6uuw8/15 -�' Page 3.11 Right of the City to Satisfy Other Liens on the Site After Title Passes.. 21 3.13 Limitation on Encumbrances.................................................................. 23 3.14 Holder Not Obligated to Construct Improvements.................................23 3.15 Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders; Right to Cure................................................................................................................23 3.16 Failure of Holder to Complete Improvements........................................24 3.17 Right of City to Cure Mortgage, Deed of Trust or Other Security Interest Default 24 3.18 Hazardous Materials...............................................................................25 3.18.1 Indemnity....................................................................................25 3.18.2 Definitions...................................................................................25 3.19 Materiality...............................................................................................26 4. USE OF THE SITE.........................................................................................................26 4.1 Affordable Housing................................................................................26 4.2 Uses In Accordance with City Regulatory Agreement ...........................26 4.3 Nondiscrimination...................................................................................26 4.4 Effect of Violation of the Terms and Provisions of this Agreement ......27 4.5 Maintenance of the Site..........................................................................28 5. DEFAULTS AND REMEDIES.....................................................................................28 5.1 Defaults -- General..................................................................................28 5.2 Legal Actions..........................................................................................28 5.2.1 Specific Performance..............................................................................28 5.2.2 Institution of Legal Actions; No Attorney's Fees...................................29 5.2.3 Applicable Law.......................................................................................29 5.2.4 Acceptance of Service of Process...........................................................29 5.3 Rights and Remedies Are Cumulative....................................................29 5.4 Inaction Not a Waiver of Default............................................................29 5.5 Termination by the City ..........................................................................30 5.6 City's Option to Acquire Plans...............................................................30 6. GENERAL PROVISIONS.............................................................................................30 6.1 Notices, Demands and Communications Between Parties .....................30 6.2 Conflicts of Interest.................................................................................31 6.3 Enforced Delay; Extension of Times of Performance ................:...........31 6.4 Non -Liability of Officials and Employees of the City ............................ 31 6.5 Interpretation; Entire Agreement, Waivers; Attachments ......................32 6.6 Time of Essence......................................................................................32 6.7 Maintenance of Books and Records.......................................................32 6.8 Right to Inspect.......................................................................................32 6.9 Binding Effect of Agreement..................................................................32 6.10 Severability............................................................................................. 32 6.11 Counterparts............................................................................................33 6.12 Amendments to this Agreement ..............................................................33 882/036753-0123 2765748.6 al2/08/15 -I1- Page 1. INSURANCE REQUIREMENTS....................................................................................1 ATTACHMENTS 1 Site Map 2 Legal Description 3 Scope of Development 4 Schedule of Performance 5 City Note 6 City Deed of Trust 7 City Regulatory Agreement and Declaration of Covenants and Restrictions 8 Project Budget 9 Project Pro Forma 10 Notice of Affordability Restrictions on Transfer of Property 11 Real Estate Purchase Agreement dated June 30, 2015 12 Release of Construction Covenants 882/036753-0123 2765748.6 .12/08/15 -I11- AFFORDABLE HOUSING AGREEMENT AND JOINT ESCROW INSTRUCTIONS This Affordable Housing Agreement ("Agreement") is entered into as of the �+ day of VCCz'WbC4r , 2015 ("Agreement Date") by and between CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and COMMUNITY DEVELOPMENT PARTNERS, a California corporation ("Developer"). City and the Developer, individually referred to herein as a "Parry," and collectively referred to herein as the "Parties," hereby agree as follows: 1. SUBJECT OF AGREEMENT 1.1 Purpose of Agreement The purpose of this Agreement is to assist in financing the acquisition of an affordable rental housing development, consisting of not less than twelve (12) residential dwelling units, with all of such units restricted for rental and occupancy by "Eligible Tenants" at an "Affordable Rent" (as those terms are hereinafter defined) for a term of fifty five (55) years (the "Project") by the Developer with a loan in an amount of up to One Million Nine Hundred Seventy Five Thousand and 00/100 Dollars ($1,975,000.00) from the City's Affordable Housing Fund. As used herein, the term "Unit" refers to an individual dwelling unit of the twelve (12) rental dwelling units, and the term "Units" refers to all of the twelve (12) rental dwelling units. The Units are subject to the "City Regulatory Agreement" (as that term is hereinafter defined and attached hereto and incorporated herein by reference as Attachment No. 7). The acquisition of the Project by Developer and the occupancy of the affordable rental housing project by Eligible Tenants, all as provided in this Agreement, are in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken, including, but not limited to, California Constitution Article 34. 1.2 The Site The site is located at 6001 Coast Boulevard, in the City of Newport Beach, County of Orange, State of California ("Site" or "Property"). The Site is owned in fee by Danny P. Foley and Athena M. Foley, Trustees of the Danny and Athena Foley Family Trust dated July 12, 2007, as to an undivided fifty percent (50%) interest and Paul Stephen Foley and Kathy Foley, Trustees of the PS and KA Foley Trust dated October 1, 2010 (collectively, the "Site Owner") and consists of approximately seven thousand forty-four square feet (7,044 sf or 0.16 acres) of land area. The Site (identified as APN 045-114-15) is depicted on the Site Map, attached hereto and incorporated herein by reference as Attachment No. 1. The legal description of the Site is provided on Attachment No. 2, attached hereto and incorporated herein by this reference. Developer and Site Owner have entered into that certain Real Estate Purchase Agreement dated June 30, 2015, as amended, attached hereto and incorporated herein by reference as Attachment No. 11 ("Purchase Agreement"), pursuant to which the Site Owner has agreed to sell the Site to Developer. Escrow has opened pursuant to the Purchase Agreement ("Purchase Agreement Escrow") and is scheduled to close not later than December 31, 2015, which is after 882/036753-0123 2765748.6 a12/08/15 -1- the date the Parties entered into this Agreement. Any and all amendments to the Purchase Agreement now existing or existing in the future shall be incorporated into this Agreement by reference, and upon written request to and approval by City, which shall not be unreasonably withheld, City agrees to amend this Agreement to reflect any such amendment to the Purchase Agreement that extends the time to close escrow. 1.3 Parties to the Agreement 1.3.1 The City City is the City of Newport Beach, a California municipal corporation and charter city. The principal office and mailing address of the City is located at 100 Civic Center Drive, P.O. Box: 1768, Newport Beach, California 92660, or such other address as City shall hereafter designate in writing to Developer. 1.3.2 The Developer Developer is Community Development Partners, a California corporation. The principal office and mailing address of the Developer for purposes of this Agreement is 3416 Via Oporto, Suite 301, Newport Beach, California 92663, or such other address as Developer shall hereafter designate in writing to City. By executing this Agreement, each person signing on behalf of the Developer warrants and represents to the City that Developer has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon the Developer have been obtained, and that the person or persons executing this Agreement on behalf of the Developer are fully authorized to do so. Whenever the term "Developer" is used in this Agreement, such term shall include any and all nominees, assignees, or successors in interest as herein provided. 1.4 Definitions "Acquisition Lender" shall mean the lender of the Acquisition Loan. "Acquisition Loan" shall mean a loan obtained by Developer to pay a portion of the costs of acquisition of the Site not paid by the City Acquisition Assistance. "Affordable Rent" to be charged by Developer and paid by Eligible Tenants shall mean the Federal Low Income Housing Tax Credit gross monthly rent comprised of the sum of the tenant paid monthly rent, monthly utility allowance and other monthly non -optional charges that does not exceed the maximum rents as established and published by the California Tax Credit Allocation Committee for each respective approved income level in accordance with the Affordability Matrix. "Agreement Date" shall mean the later of the dates this Agreement is executed on behalf of City and Developer. 882/036753-0123 2765748.6 al2/08/15 -2- "AMI" shall mean the median family income (adjusted for family size) for the Orange County area established by the U.S. Department of Housing and Urban Development ("HUD'). "City Acquisition Assistance" shall mean the financial assistance to be provided by City to Developer in the amount set forth in Section 2.1.2, to be used by Developer to purchase the Site. "City Acquisition Assistance Funding Conditions" shall have the meaning ascribed in Section 2.2.1. "City Deed of Trust" shall mean that certain Deed of Trust with Assignment of Rents to secure the City Note and Developer's performance of its obligations under this Agreement and the City Regulatory Agreement, substantially in the form attached hereto and incorporated herein as Attachment No. 6. "City Loan" shall mean the City Acquisition Assistance. "City Manager" shall mean the individual duly appointed to the position of City Manager of the City, or his or her authorized designee. Whenever an administrative action is required by City to implement the terms of this Agreement, the City Manager, or his or her authorized designee, shall have authority to act on behalf of City, except with respect to matters reserved for City Council determination. "City Note" shall mean that certain promissory note, substantially in the form attached hereto and incorporated herein as Attachment No. 5, in favor of City, evidencing the City Loan. "City Regulatory Agreement" shall mean that certain Regulatory Agreement and Declaration of Covenants and Restrictions, substantially in the form attached hereto and incorporated herein as Attachment No. 7. "City Title Policy" shall have the meaning ascribed in Section 2.3 hereof. "Construction Lender" shall mean the first trust deed lender during the construction period (e.g., until the Conversion Date). The Construction Lender may or may not also be the Take -Out Lender. "Construction Loan" shall mean the proceeds of a loan made to finance the Project through the construction period (e.g., until the Conversion Date). "Conversion Date" shall mean the date on which the Take Out Loan has been fully funded and the Construction Loan has been repaid. "CTCAC" shall mean the California Tax Credit Allocation Committee. "Days" shall mean calendar days and the statement of any time period herein shall be calendar days, and not business days, unless otherwise specified. 882/036753-0123 2765748.6 a12/08/15 -3- "Eligible Tenant" shall mean a "Senior Household" or "Veteran Household", both as defined herein, whose annual income does not exceed the thirty percent (30%), forty percent (40%) fifty percent (50%) or sixty percent (60%) of the AMI level designated for the Unit to be occupied. "Escrow" shall mean Escrow No. 0929 -15b-918-J',c6kpened with the Escrow Agent. "Escrow Agent" shall mean Joy Eaton, in Irvine, California. "Escrow Holder" shall mean Lawyers Title in Irvine, California. "Funding Closing Date" shall mean the date on which each of the following occurs (i) Developer closes on the Construction Loan; and (ii) Developer receives its first contribution of Tax Credit equity from the Qualified Tax Credit Investor. "Hazardous Materials" shall have the meaning ascribed in Section 3.16.2 hereof. "Manager's Unit" shall mean a Unit occupied by an on-site property manager who is also an Eligible Tenant. "Notice of Affordability Restrictions" shall mean the Notice of Affordability Restrictions on Transfer of Property substantially in the form attached hereto and incorporated herein as Attachment No. 10, which is required to be recorded against the Site concurrently with the funding of the City Acquisition Assistance. "Outside Funding Closing Date" shall mean the date that is one hundred eighty (180) days after the first date on which Developer has received an allocation of nine percent (9%) Tax Credits from CTCAC. "Outside Site Closing Date" shall mean December 31, 2015. "Project" shall have the meaning ascribed in Section 1.1 hereof. "Project Budget" shall mean that certain budget referred to in Section 2.1.4 of this Agreement and attached hereto as Attachment No. 8 which is incorporated herein by this reference. "Project Pro Forma" shall mean the financial information referred to in Section 2.1.4 of this Agreement and attached hereto and incorporated herein as Attachment No. 9 and is Developer's best estimate of the costs of ongoing operations based on the information available to Developer as of the Agreement Date. "Purchase Agreement" shall have the meaning ascribed in Section 1.2 hereof. "Qualified Tax Credit Investor" shall mean any entity or entities experienced in investing in projects financed with Tax Credits which acquires an ownership interest in the Project and has the right to receive Tax Credits. 882/036753-0123 2765748.6 a12/08/15 -4- "Release of Construction Covenants" shall mean that certain Release of Construction Covenants, in the form attached hereto and incorporated herein as Attachment No. 12. "Released/Indemnified Parties" shall mean City, its City Council, boards, committees and commissions, officers, agents, volunteers and employees. "Restricted Unit Matrix" means that certain matrix attached to the City Regulatory Agreement and incorporated herein as Exhibit "C". This matrix requires the 12 one -bedroom Units at the project site to be the following: 6 Units at 30% AMI, 2 Units at 40% AMI, 3 Units at 50% AMI, and 1 Unit at 60%. This matrix additionally requires that seven (7) Units be occupied by Veteran Households and five (5) Units be occupied by Senior Households with a leasing preference for Veteran Senior Households. "Schedule of Performance" shall mean that certain Schedule attached hereto and incorporated herein as Attachment No. 4. "Scope of Development" shall mean that Section 4 of that certain Response to Request for Proposals prepared by Developer, dated November 12, 2015 and attached hereto and incorporated herein as Attachment No. 3. "Senior Household" means any household containing one or more persons who are 62 years of age or older and meeting applicable provisions of California Civil Code Section 51.3 and the federal Fair Housing Act. "Site" shall have the meaning ascribed in Section 1.2 hereof. "Site Closing Date" shall mean the date on which each of the following occurs: (i) the Escrow closes; (ii) Developer or an affiliate of the Developer obtains fee title to the Site; and (iii) the City Deed of Trust and the City Regulatory Agreement are recorded. "Site Owner" shall have the meaning ascribed in Section 1.2 hereof. "Take -Out Lender" shall mean the institution that holds a first deed of trust securing a loan made to finance the Project after the construction period (e.g., from and after the Conversion Date). The Take -Out Lender may or may not also be the Construction Lender. "Take -Out Loan" shall mean the loan made by the Take -Out Lender. "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue Code Section 42, California Health and Safety Code Sections 50199.4-50199.22, California Revenue and Taxation Code Sections 12205, 12206, 17057.5, 17058, 23610.4, and 23610.5, and applicable federal and State regulations. "Tax Credits" shall mean the low income housing tax credits granted by CTCAC for the Project pursuant to the Tax Credit Program. 8 82/03 67 5 3-012 3 2765748.6 al2/08/15 —5— "Tax Credit Regulatory Agreement" shall mean that certain regulatory agreement to be recorded against the Site as a condition of the receipt by the Project of an allocation by CTCAC of nine percent (9%) Tax Credits. "Title Company" shall mean Lawyers Title Company. "Unit" and "Units" shall have the meaning ascribed in Section 1.1 hereof. "Veteran Household" means any household which includes one or more persons who served in the active military, naval, or air service of the United States, or as a member of the National Guard who was called to and released from active duty or active service, for a period of not less than 90 consecutive days or was discharged from the service due to a service connected disability within that 90 -day period. 1.5 Prohibition Against Change in Ownership, Management and Control of Developer and Prohibition Against Transfer of the Site The qualifications and identity of the Developer are of particular interest to the City. It is because of these qualifications and identity that the City has entered into this Agreement with the Developer. Consequently, no person, whether a voluntary or involuntary successor of Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign all or any part of this Agreement, the Site, or the City Regulatory Agreement without the prior written approval of the City. A voluntary or involuntary sale or transfer of a controlling interest in the Developer or the Site during the term of this Agreement shall be deemed to constitute an assignment or transfer for the purposes of this Section 1.5, and the written approval of the City shall be required prior to effecting such an assignment or transfer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the City, shall render this Agreement absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. During the term of this Agreement and the City Regulatory Agreement the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or any of the improvements thereon, without the prior written approval of the City. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or transfer of the Site, or any interest therein, shall not be required in connection with: (a) the conveyance or dedication of any portion of the Site to the City, or other appropriate governmental agency, including public utilities, where the granting of such conveyance or easement permits or facilitates the development of the Project on the Site; or (b) the transfer of all or any part of the Project or Site to an entity owned and controlled by Developer or the principals of Developer, including, without limitation, transfer to a limited partnership in which Developer, or an affiliate of Developer, is a general partner; (c) any mortgage, deed of trust, sale and leaseback, or other form of conveyance required for any reasonable method of financing or refinancing the development of the Project on the Site that is contemplated in the Project Budget or has otherwise been approved in writing by the City Manager, including all direct and indirect costs related thereto; (d) transfers resulting from the death or mental or physical incapacity of an individual; (e) transfers in trust for the benefit of a 882/036753-0123 2765748.6 al2/08/15 -6- spouse, children, grandchildren, or other family member, or for charitable purposes; (f) transfers of less than controlling interest shares of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; (g) the admission of the Qualified Tax Credit Investor as a limited partner to a limited partnership in which Developer is a general partner and to which all or any part of the Project or Site has been transferred pursuant to Section (b) hereof; (h) the transfer by the Qualified Tax Credit Investor to an entity that is an affiliate of the Qualified Tax Credit Investor; and (i) the removal by the Qualified Tax Credit Investor of the general partner for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to City. Notwithstanding anything in this Section 1.5 to the contrary, any transfer or assignment by Developer or any successor in interest to Developer not requiring the approval by City shall be effective when made but shall not be deemed to relieve Developer or any successor party from its obligations under this Agreement unless and until the transferor and transferee execute and deliver to City an assignment and assumption agreement. Any transfer or assignment by Developer or any successor in interest to Developer requiring the approval by City pursuant to this Section 1.5 shall be effective and shall be deemed to relieve Developer or any successor party from its obligations under this Agreement only upon execution and delivery to the City by the transferor and transferee of an assignment and assumption agreement in a form and with content reasonably acceptable to City, and upon execution of an acknowledgment of same by City. This Section 1.5 shall not be applicable to the leasing of individual Units to Eligible Tenants in accordance with this Agreement and the City Regulatory Agreement, and no assignment and assumption agreement shall be required in connection therewith. 1.6 Representations by the Developer The Developer represents and warrants to the City as follows: (a) The Developer is duly established and in good standing under the laws of the State of California and has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. This Agreement is enforceable against the Developer in accordance with its terns. The parties who have executed this Agreement on behalf of Developer are authorized to bind Developer by their signatures hereto. (b) The Developer does not have any contingent obligations or contractual agreements which will adversely affect the ability of the Developer to carry out its obligations hereunder. (c) There are no pending or, so far as is known to the Developer, threatened, legal proceedings to which the Developer is or may be made a party to or to which it or any of its property including, without limitation, the Site, is or may become subject, which have not been fully disclosed in the material submitted to the City, which will adversely affect the ability of the Developer to carry out its obligations hereunder. 882/036753-0123 2765748.6 x12/08/15 -7- (d) There is no action or proceeding pending or, to the Developer's best knowledge, threatened, looking toward the dissolution or liquidation of the Developer and there is no action or proceeding pending or, to the Developer's best knowledge, threatened by or against the Developer which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of the Developer to carry out its obligations hereunder. (e) Developer is not the subject of a bankruptcy proceeding (f) The execution and delivery of this Agreement and all other documents to be executed by Developer pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which Developer is bound. (g) The execution and delivery of this Agreement and all other documents to be executed by Developer pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to Developer. (h) No representation, warranty, or covenant of Developer in this Agreement, or in any document or certificate furnished or to be furnished to City pursuant to this Agreement, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. (i) All financial information delivered to City, including, without limitation, information relating to the financial condition of Developer, the Site, and the Project accurately represents such financial condition and has been prepared in accordance with accepted accounting principles consistently applied, unless otherwise noted in such information. Developer shall notify City in writing within ten (10) calendar days of any materially adverse changes to such information delivered to the City. 0) The Developer has, and will as required by its obligations hereunder, dedicate, allocate and otherwise make available, sufficient financial and other resources to perform its obligations under this Agreement. (k) To Developer's knowledge, except as disclosed, in writing, to City, no Hazardous Materials (as defined in Section 3.16.2 below) are now or have been released, used, or stored on or within any portion of the Site in violation of applicable laws or regulations governing the release, use, or storage of Hazardous Materials, and there has not been any federal, state, or local enforcement, clean-up, removal, remedial, or other governmental or regulatory actions instituted or completed affecting the Site. (1) Developer shall ensure a qualified operator is in place to operate the Project consistent with this Agreement, the Regulatory Agreement and Declaration of Covenants and Restrictions attached hereto. (m) Developer, for the tern of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of 882/036753-0123 2765748.6 al2/08/15 '8' Developer and City, insurance policies reasonably determined by City and commensurate with industry standards for the area. Each of the foregoing items (a) to (m), inclusive, shall be deemed to be an ongoing representation and warranty continuing through the term of this Agreement. The Developer shall advise the City in writing at the locations prescribed for notice in Section 1.3, if there is any change pertaining to any matters set forth or referenced in the foregoing items (a) to (m), inclusive. 1.7 Representations by the City City represents and warrants to Developer as follows: (a) City is a California municipal corporation and charter city. The execution, performance, and delivery of this Agreement by City has been fully authorized by all requisite actions on the part of City. The parties who have executed this Agreement on behalf of City are authorized to bind City by their signatures hereto. (b) City does not, as far as is known to City, have any contingent obligations or contractual agreements which will adversely affect the ability of City to carry out its obligations hereunder. (c) There are no pending or, so far as is known to City, threatened, legal proceedings to which City is or may be made a party or to which it or any of its property is or may become subject, which will adversely affect the ability of City to carry out its obligations hereunder. (d) There is no action or proceeding pending or, to City's knowledge, threatened, looking toward the dissolution or liquidation of City and there is no action or proceeding pending or, to City's knowledge, threatened by or against City which could affect the validity and enforceability of the terms of this Agreement, or adversely affect the ability of City to carry out its obligations hereunder. (e) City is not the subject of a bankruptcy proceeding. (f) To City's knowledge, the execution and delivery of this Agreement and all other documents to be executed by City pursuant to this Agreement will not constitute or result in any default or event that with notice or the lapse of time, or both, would be a default, breach, or violation of any other agreement, instrument, or arrangement by which City is bound. (g) To City's knowledge, the execution and delivery of this Agreement and all other documents to be executed by City pursuant to this Agreement and the consummation of the transactions contemplated herein will not violate any provision of or require any consent, authorization, or approval under any law or administrative regulation or any other order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to City. 882/036753-0123 2765748.6 a12/08/15 -9- (h) To City's knowledge, no representation, warranty, or covenant of City in this Agreement, or in any document or certificate furnished or to be furnished to Developer pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. As used in this Section 1.7, the term "knowledge" or "known" shall mean the actual (not constructive or imputed) knowledge of the City Manager, without any investigation or inquiry or duty of investigation or inquiry. 2. FINANCING 2.1 Developer's Financing Plan Developer intends to finance the development of the Project with a combination of funds from the proceeds of the following: (i) the City Loan; (ii) the Acquisition Loan; (iii) Nine Percent (9%) Tax Credits; (iv) the Construction Loan; (v) The Take -Out Loan; (vi) Affordable Housing Program (AHP) Funds from the Federal Home Loan Bank; (vii) Welfare Property Tax Exemption (if eligible); (viii) Veteran Affairs Supportive Housing (VASH) vouchers; and (ix) such other financing sources as may be obtained by Developer in accordance with the terms and conditions of this Agreement. Developer shall utilize all of such funding exclusively for development of the Project on the Site, and not for any other purpose. Developer shall notify the City in writing in the event of any change or modification to the sources of Developer's financing as set forth in this Section 2.1. 2.1.1 Funding of City Loan The City Loan shall be disbursed to the Developer through the Escrow pursuant to Section 2.2 below. Within five (5) business days after the Agreement Date the City shall deposit the full amount of the City Acquisition Assistance into the Escrow. 2.1.2 City Acquisition Assistance City shall provide Developer with financial assistance, in the maximum principal amount of One Million Nine Hundred Seventy Five Thousand and 00/100 Dollars ($1,975,000.00) to assist Developer with Developer's acquisition costs for the Site ("City Acquisition Assistance"). The City Acquisition Assistance shall be disbursed in accordance with the provisions of Section 2.2.1 below and the escrow instructions outlined in Section 2.2.2. Repayment of the City Acquisition Assistance shall be in accordance with the terms of the City Note. Developer acknowledges that the City Acquisition Assistance is an amount that in combination with the Acquisition Loan will cover the Developer's acquisition costs for the Site. 2.1.3 Other Developer Financing for the Project a. Application to CTCAC. Developer shall prepare and submit a complete application to CTCAC (California Tax Credit Allocation Committee) for an allocation of Nine Percent (9%) Tax Credits at the first opportunity following the Agreement Date. 882/036753-0123 2765748.6 a12/08/15 _10- Developer agrees to promptly submit to City all of the following documents at such time as the same are submitted by Developer to CTCAC or other applicable body or when such documents are received by Developer, as applicable (any documents submitted prior to the Agreement Date shall also have been submitted by Developer to City prior to the Agreement Date): i) A true and correct copy of the preliminary reservation letter from CTCAC. ii) A complete copy of the regulatory agreement between CTCAC and Developer. In addition to the foregoing sources of funding for the Project, Developer, in consultation with the City, shall diligently seek other sources of funding that are or may be available to help fund the Project. b. Failure to obtain Nine Percent (9%) Tax Credits. Developer and City acknowledge that the application process for Nine Percent (9%) Tax Credits is highly competitive and there is no guarantee that Developer shall receive an allocation of Tax Credits. Developer agrees to use best efforts to obtain an allocation of Nine Percent (9%) Tax Credits for so long as is commercially reasonable to do so but shall under any circumstances apply at the first two (2) opportunities following the Agreement Date (unless Developer successfully receives an allocation during its first opportunity following the Agreement Date and in such event shall have no reason to apply during the second opportunity). C. Alternative Financing. In the event that Developer is unsuccessful in obtaining an allocation of Nine Percent (9%) Tax Credits after submitting a minimum of two (2) applications, City agrees to work in good faith with Developer to identify and procure alternative financing to implement the Scope of Development, attached hereto as Attachment No. 3. The failure by the Developer to obtain an allocation of Nine Percent (9%) Tax Credits or alternative funding within the time periods described herein shall not be a default under this Agreement or any other document related hereto, but shall require the parties to renegotiate the terms of this Agreement within a reasonable time period mutually agreeable to the Parties, but in no event less than 90 days. If the Parties are unable to agree during such renegotiation to terms for amending this Agreement, Developer shall have a reasonable period of time to market and sell the Project and Developer shall pay to City from the proceeds of said sale the lesser of said proceeds or the amount of the City Acquisition Assistance then outstanding. Sale price to be agreed upon between City and Developer and based upon a real property appraisal. 2.1.4 Proiect Budget: Proiect Pro Forma The anticipated sources and uses of funds for the development of the Project are set forth in the Project Budget, which is attached hereto and incorporated by reference (Attachment No. 8). The financial projections for the Project are set forth in the Project Pro Forma, which is attached hereto and incorporated by reference (Attachment No. 9). Developer and City acknowledge that the Project Budget and Project Pro Forma are estimates as of the Agreement Date and are subject to change based on changes in costs, AMI, TCAC regulations 882/036753-0123 2765748.6 a12/08/15 -11- governing allocations of Nine Percent (9%) Tax Credits and other such matters related to the development of the Project. Developer shall submit updated Project Budget and Project Pro Forma upon request from City. 2.1.5 Developer Submittals Promptly upon Developer's receipt of a notification of an award of any of the financing described in the Project Budget, Developer shall notify the City Manager, or its designee, in writing. 2.2 City's Disbursement of City Acquisition Assistance and Escrow Instructions 2.2.1 City Acquisition Assistance Funding Conditions The City Acquisition Assistance shall be disbursed through the Escrow. Within five (5) business days after the Agreement Date, subject to City and Escrow Agent executing escrow instructions consistent with the requirements of Section 2.2.2, City shall deposit the City Acquisition Assistance into the Escrow. City's obligation to instruct the Escrow Agent to disburse to the Site Owner all or a portion of the City Acquisition Assistance shall be conditional and contingent upon the satisfaction, or waiver by the City in its reasonable discretion, of each and all of the following conditions (collectively, "City Acquisition Assistance Funding Conditions"): a. All conditions precedent to "Closing" under the Purchase Agreement (attached hereto as Attachment No. 11) shall have been satisfied, or waived by the appropriate Party, and on or before the Outside Site Closing Date, the Escrow shall have closed or be closing concurrently with disbursement of the City Acquisition Assistance; b. Developer shall have delivered to City or the Title Company the City Deed of Trust, and the City Regulatory Agreement and Declaration of Covenants and Restrictions, both duly executed and acknowledged by Developer for recordation by the Title Company and the Title Company shall have recorded, or shall record, concurrently with the disbursement of the City Acquisition Assistance, each of the same; C. Developer shall have executed and delivered to City the City Note; d. The Title Company shall be irrevocably committed to issue the City Title Policy on the date Escrow Agent disburses the City Acquisition Assistance; and Agreement. C. Developer is not in material default of any term or condition of this 2.2.2 Escrow Instructions a. Payment toward Purchase Price. Not later than five (5) business days following the opening of escrow, City shall deposit in Escrow in good funds, the sum of ONE HUNDRED THOUSAND DOLLARS 882/036753-0123 2765748.6 a12/08/15 -12- ($100,000.00) (the "Deposit"), which Deposit shall be applicable to the Purchase Price as defined in the Purchase Agreement upon the closing of escrow. "Good funds" shall mean a wire transfer of funds, cashier's or certified check drawn on or issued by the offices of a financial institution located in the State of California, or cash. In the event the Purchase Agreement is terminated by Site Owner on or before the expiration of the Due Diligence Period, (defined as commencing upon the Opening of Escrow and continuing thereafter for forty-five (45) days), or Developer disapproves of any of the items requiring approval of Developer hereunder on or before the expiration of the Due Diligence Period, the Deposit shall be promptly returned to City. Developer shall have the unqualified and unrestricted right to terminate its obligations under this Agreement on or before the expiration of the Due Diligence Period. i) On or before the Closing Date as defined in the Purchase Agreement, City shall deposit the balance of the City Acquisition Assistance, subject to any other credits or debits hereunder, with Escrow Holder in Good Funds. b. Opening of Escrow. Within five (5) business days after the execution of this Agreement by City, the parties shall open an escrow ("Escrow") with the Escrow Holder by causing an executed copy of this Agreement to be deposited with Escrow Holder. Escrow shall be deemed open on the date that City delivers this executed Agreement to Escrow Holder. C. Preliminary Title Report. Following execution of this Agreement but in no event later than five (5) days following opening of Escrow, Developer shall provide City a preliminary title report issued through Lawyer's Title Company (the "Title Company"), describing the state of title of the Property, (the "Preliminary Title Report") together with copies of all exceptions specified therein. City shall notify Developer in writing of any objections City may have to title exceptions or other matters ("Disapproved Exceptions") contained in the Preliminary Title Report within fifteen (15) business days after issuance of the Preliminary Title Report ("City's Objection Notice"). City shall not unreasonably withhold its approval of the Preliminary Title Report. If City fails to deliver City's Objection Notice within said fifteen (15) business day period, City shall be conclusively deemed to have approved the Preliminary Title Report and all matters shown thereon. In the event City delivers City's Objection Notice within said period, Developer shall have a period of ten (10) business days after receipt of City's Objection Notice in which to notify City of Developer's election to agree to attempt to remove the Disapproved Exceptions prior to the Close of Escrow ("Developer's Notice"). Developer shall only elect to decline to remove Disapproved Exceptions which Developer in good faith believes Developer's reasonable efforts would not result in removal or as to which removal would result in cost or expense to Developer other than nominal administrative expense incurred in the process of removal. Developer's failure to deliver Developer's Notice within said ten (10) business day period shall be deemed Developer's election to decline to remove the Disapproved Exceptions. If Developer notifies City of its election to decline to remove the Disapproved Exceptions, if Developer is deemed to have elected to decline to remove the Disapproved Exceptions, or if Developer is unable to remove the Disapproved Exceptions, City may elect either to terminate this Agreement and the Escrow or to accept title to the Property subject to the Disapproved Exception(s). City shall exercise such election by delivery of written notice to Developer and Escrow Holder within ten (10) business days following the earlier of (i) the date of written advise from Developer that such Disapproved Exception(s) cannot be removed; or (ii) 882/036753-0123 2765748.6 al2/08/15 -13- the date Developer declines or is deemed to have declined to remove such Disapproved Exception(s). If City fails to deliver said written notice of termination of this Agreement and the Escrow within said ten (10) business day period, City's disapproval of the Disapproved Exception(s) shall be deemed waived and City shall deemed to have agreed to accept a form of lender's title policy on the Property subject to the Disapproved Exception(s). It shall be a condition of the close of escrow, for the benefit of Developer, that Escrow Holder be irrevocably committed, at the close of escrow and, following recording of a deed, to provide the City, at Developer's cost, with a CLTA Standard Coverage Policy of Title Insurance in the amount of the City Acquisition Assistance, subject only to the exceptions approved by City pursuant to Section 2.2.2 (c), and the preprinted exceptions and stipulations in said policy (the "Title Policy"). d. Escrow. City and Developer agree to open an escrow in accordance with this Agreement at an escrow company of City's choice within five (5) days of execution of this Agreement by both parties. Section 2.2.2 constitutes the joint escrow instructions of the City and Developer, and Escrow Holder to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to perform all acts reasonably necessary to close this escrow if, as and when required hereby. City agrees to deposit the City Acquisition Assistance in sufficient time to permit the close of escrow to occur in a timely manner. City and Developer agree to deposit with Escrow Holder any additional instruments as may be reasonably necessary to complete this transaction. All funds received in this escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account; provided, however, that Escrow Holder shall make any disbursement to Site Owner in accordance with the following wire transfer instructions: Bank: Address: Attn: ABA/Routing No.: Benefiting Account Name: Beneficiary Account No.: For further credit or reference to: Sale of 6001 Coast Boulevard e. Escrow Holder is Authorized to and shall: i) Pay and deduct from the Purchase Price any amount necessary to satisfy any delinquent taxes together with penalties and interest thereon, and/or delinquent or nondelinquent assessments or bonds except those which title is to be taken subject to in accordance with the terms of this Agreement; ii) Pay and deduct from the Purchase Price set forth, up to and including the total amount of unpaid principal and interest on note(s) secured by mortgage(s) or deed(s) of trust, if any, and all other amounts due and payable in 882/036753-0123 2765748.6 a12/08/15 -14- accordance with terms and conditions of said trust deed(s) or mortgage(s) including late charges, if any except penalty (if any), for payment in full in advance of maturity, shall, upon demand(s) be made payable to the mortgagee(s) or beneficiary(ies) entitled there under; iii) Pay and charge Developer for all recording fees incurred in this transaction including payment of reconveyance fees and forwarding fees for partial or full reconveyances of deeds of trust or release or mortgage by Developer; iv) Pay and charge Developer for any escrow fees, charges, and costs payable under this Section 2.2.2 (e) of this Agreement; v) Prorate, as between Developer and Site Owner, real estate taxes through the close of escrow and rent under Residential Income Property Purchase Agreement dated June 30, 2015, and Joint Escrow Instructions, through the close of escrow, with Developer to be charged with and have the benefit of the day of the close of escrow; vi) Disburse funds in accordance with this Agreement, record the Deed and City Regulatory Agreement and Declaration of Covenants and Restrictions in the Official Records of the County Recorder of Orange County, California, and immediately following such recordation, and immediately provide recorded documents to City when conditions of this escrow have been fulfilled by Developer and Site Owner; vii) The term "close of escrow," if and where written in these instructions, shall mean the date necessary instruments of conveyance are recorded in the Official Records office of the County Recorder of Orange County, California, and all funds have been disbursed to Site Owner in accordance with this Agreement. Recordation of instruments delivered through this escrow is authorized if necessary or proper in the issuance of the Title Policy; viii) All time limits within which any matter herein specified is to be performed may be extended by mutual agreement of the parties hereto. Any amendment of, or supplement to, any instructions must be in writing. f. Close of Escrow. Time is of the essence in these instructions. Subject to satisfaction of the conditions in Section 2.2.1, Escrow is to close on or before December 31, 2015 ("Closing Date"), unless such date is extended by mutual written agreement by both Developer and City. g. Brokers. The Parties represent and warrant that no brokers were used in connection with this transaction under this Agreement. h. Closing Date. Escrow shall close on or before December 31, 2015, ("Closing Date"). The terms "the Close of Escrow", and/or the "Closing" are used herein to mean the time Site Owner's Grant Deed is filed for record by the Escrow Holder in the Office of the County Recorder of Orange County, California. City and Developer each specifically agrees to 882/036753-0123 2765748.6 al2/08J15 -15- strictly comply and perform its obligations herein in the time and manner specified and waives any and all rights to claim such compliance by mere substantial compliance with the terms of this Agreement. City and Developer shall have the right, but not the obligation, to extend the Closing Date by mutual written agreement. i. Distribution of Documents. Following Close of Escrow, Escrow Holder shall distribute the documents as follows: i) To Developer: (1) One certified conformed copy of the Grant Deed, the original to be mailed to Developer following recordation thereof; (2) One duplicate original of the Non -Foreign Affidavit; and (3) One certified copy, conformed if recorded, of any other document delivered to Escrow Holder by City or Developer pursuant to the terms hereof. ii) To City: (1) One certified conformed copy of the Grant Deed, the original to be mailed to Developer following recordation thereof; and (2) One certified copy, conformed if recorded, of any other document delivered to Escrow Holder by City or Developer pursuant to the terms hereof. j. Title Policy to be Issued by City. When Escrow Holder holds for City the Grant Deed in favor of Developer executed and acknowledged by Site Owner covering the Property, Escrow Holder shall cause to be issued and delivered to City and Buyer as of the Closing a ALTA standard coverage policy of title insurance ("Title Policy"), or, upon Developer's request therefore, an ALTA standard coverage policy of title insurance, issued by Title Company, with liability in the amount of the City Acquisition Assistance covering the Property and showing title vested in Developer free of encumbrances, except: i) All nondelinquent general and special real property taxes and assessments for the current fiscal year; ii) Easements, encumbrances, covenants, conditions, restrictions, reservations, rights-of-way and other matters of record, as approved or deemed approved by City pursuant to Section 2.2.2 (h) above; iii) The standard printed exceptions and exclusions contained in the ALTA form policy; and iv) Any exceptions created or consented to by City, including without limitation, any exceptions arising by reason of City's City Acquisition Assistance. 882/036753-0123 2765748.6 a12108/15 -16- k. Escrow Provisions. i) Escrow Instructions. This Agreement, when signed by City and Developer, shall also constitute escrow instructions to Escrow Holder. If required by Escrow Holder, City and Developer agree to execute Escrow Holder's standard escrow instructions, provided that the same are consistent with and do not conflict with the provisions of this Agreement. In the event of any such conflict, the provisions of this Agreement shall prevail. ii) General Escrow Provisions. Escrow Holder shall deliver the Title Policy to the Developer and instruct the Orange County Recorder to mail the Grant Deed to Developer at the address set forth in Section 1.3 after recordation. All funds received in this Escrow shall be deposited in one or more general escrow accounts of the Escrow Holder with any bank doing business in Orange County, California, and may be disbursed to any other general escrow account or accounts. All disbursements shall be made by Escrow Holder's check. This Agreement and any modifications, amendments, or supplements thereto may be executed in counterparts and shall be valid and binding as if all of the parties' signatures were on one document. iii) Payment of Costs. Developer shall be responsible for payment of all costs, including but not limited to: the Escrow fee, title insurance premiums for that portion of the Title Policy premium which would be incurred for a CLTA form policy, the charge for drawing the Grant Deed, charges for recording the Grant Deed, and that portion of the Title Policy premium which is attributable to the additional cost of obtaining any additional coverage requested by City, including the difference between CLTA and ALTA coverage. All other costs of Escrow not otherwise specifically allocated by this Agreement shall be paid by Developer. This transaction is exempt from payment of documentary transfer taxes. iv) Termination and Cancellation of Escrow. Time is of the essence of this Agreement. Unless otherwise agreed to as provided by Section 2.2.2 (h), if Escrow fails to close by June 30, 2016, as provided above, Escrow shall terminate automatically without further action by Escrow Holder or any party, and Escrow Holder is instructed to return all funds and documents then in Escrow to the respective depositor of the same with Escrow Holder. Cancellation of Escrow, as provided herein, shall be without prejudice to whatever legal rights City or Developer may have against each other arising from the Escrow or this Agreement. 2.2.3 Waiver City may at any time or times, at its election, waive any of the conditions set forth in Section 2.2.1 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by City and delivered to Developer. 2.2.4 Failure of Conditions Precedent: Termination In the event that by Outside Site Closing Date each of the conditions set forth in Section 2.2.1 is not fulfilled, or waived by City pursuant to Section 2.2.1, City may, at its option, 882/036753-0123 2765748.6 e12/08/15 —17- terminate this Agreement, thereby releasing the parties from further obligations hereunder. In the event this Agreement is terminated, all documents and funds delivered by Developer to City or the Title Company shall be returned immediately to Developer and all documents and funds delivered by City to Developer or the Title Company shall be returned immediately to City. Nothing in this Section 2.2.3 shall be construed as releasing any Party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement. 2.3 Title Insurance As one of the City Acquisition Assistance Funding Conditions, Developer shall obtain on City's behalf and at the Developer's expense from the Title Company an ALTA lender's policy of title insurance, together with such endorsements as may be reasonably requested by City with liability in the amount of the City Note, covering the Site, showing title vested in Developer, and insuring the validity and priority of, respectively, the City Deed of Trust and the City Regulatory Agreement, and subject only to those Schedule B Exceptions as set forth in the Preliminary Title Report issued by the Title company as its Order No. OSO 2.5,-1 16W (the "City Title Policy"). 2.4 Subordination The City agrees to subordinate the City Deed of Trust and City Regulatory Agreement to the deed of trust securing the Acquisition Loan before the close of escrow. City agrees to subordinate the City Deed of Trust and City Regulatory Agreement to the Construction Loan and Take Out Loan only upon Developer's receipt of approval of Nine Percent (9%) Tax Credits. Such subordination as contemplated in this Section 2.4 shall only take place pursuant to written subordination agreement(s) approved by City's legal counsel (the "Subordination Agreement"), and shall comport with the purpose of this Agreement. 3. DEVELOPMENT OF THE SITE 3.1 Scope of Development Developer agrees to rehabilitate the existing rental housing development containing twelve (12) apartment dwelling units as set forth in this Agreement and in the Scope of Development. The Developer shall commence and complete the applicable scope of work by the time established therefor in the Schedule of Performance. 3.2 Changes to Scope of Development If the Developer desires to make any changes in the Scope of Development the Developer shall notify the City in writing of such proposed changes. City's prior written consent shall be required for any material changes in the Scope of Development, which consent shall not be unreasonably withheld. If City has not issued a written response to any change to the Scope of Development requested pursuant to this Section 3.2 within fifteen (15) business days of its submission by Developer such change shall be deemed approved. 882/036753-0123 2765748.6 a12/08/15 ' 18' 3.3 Cost of Development With the exception of the City Loan, all costs for acquiring the Site, planning, designing, and rehabilitating the Project shall be borne exclusively by the Developer. The Developer shall also bear all costs related to discharging the duties of the Developer set forth in this Agreement. 3.4 Tenancy During Development and Relocation Costs Developer shall be responsible for and bear all costs of relocation of Affordable Housing Unit tenants, if necessary. Developer shall not increase the rent charged to any tenant of an Affordable Housing Unit until such time as the Release of Construction Covenants has been issued. 3.5 Construction Contract; Construction Schedule Prior to commencing rehabilitation of the Project, Developer shall provide to City a copy of a fee-based construction contract or guaranteed maximum price construction contract between Developer and its general contractor for all of the improvements required to be constructed by Developer hereunder, certified by Developer to be a true and correct copy thereof. The Developer shall obtain building permits, if applicable, and commence and complete rehabilitation of the Project by the respective times established therefor in the Schedule of Performance. 3.6 Indemnitv The Developer shall indemnify, defend, and hold harmless the Released/Indemnified Parties from and against any and all claims or suits for, and damages to, property and injuries to persons, including death resulting from defects, obstructions or from any cause arising from Developer's Work on the Project, or the Work of any subcontractor or supplier performing work on the Project, demands, obligations, damages, actions, causes of action, losses, judgments, fines, penalties, liabilities, costs and expenses (including expert witness fees, attorney's fees, disbursements, and costs), which may arise under this Agreement or in any manner relate (directly or indirectly) to the negligence, recklessness, or misconduct of the Developer or its principals, officers, agents, employees, volunteers, vendors, suppliers, subconsultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they maybe liable, or any or all of them. 3.7 City and Other Governmental Agency Permits Before commencement of rehabilitation of the Project the Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by the City or any other governmental agent affected by such rehabilitation. If required, Developer shall obtain a City business license during the term of this Agreement. 882/036753-0123 2765748.6 a12/08/15 -19- 3.8 Rights of Access For purposes of assuring compliance with this Agreement, representatives of the City shall have the right of access to the Site without charges or fees, upon twenty-four (24) hour notice to Developer during the period of this Agreement for the purposes of ensuring compliance with this Agreement, including, but not limited to, the inspection of the work being performed in rehabilitating the Project, so long as they comply with all safety rules. Such representatives of the City shall be those who are so identified in writing by the City Manager. Developer and Developer entities shall be responsible for any bodily injury or related damages and indemnify the City for all claims or suits for, and damages to, property and injuries to persons, including accidental death (including expert witness fees, attorney's fees, and costs) arising out of the activities of the City as referred to in this Section 3.8. 3.9 Local. State and Federal Laws Developer shall carry out the construction of the Project in conformity with all applicable laws, regulations, rules, statutes, ordinances, and requirements of the governmental agencies having jurisdiction, including without limitation the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the Newport Beach Municipal Code and City Charter, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., the Unruh Civil Rights Act, Civil Code Section 51, et seq., and the California Building Standards Code, Health and Safety Code Section 18900, et seq., and all federal, state, and local labor laws and regulations, including, without limitation, if applicable, the requirements to pay prevailing wages under federal law (the Davis Bacon Act, 40 U.S.C. Section 3141, et seq., and the regulations promulgated thereunder set forth at 29 CFR Part 1 (collectively, "Davis Bacon")) and California law (Labor Code Section 1720, et seq.). The Parties acknowledge that a financing structure utilizing certain federal and/or state funding sources and financing scenarios may trigger compliance with applicable state and federal prevailing wage laws and regulations. Developer shall be solely responsible, expressly or impliedly, and legally and financially, for determining and effectuating compliance with all applicable federal, state and local public works requirements, prevailing wage laws, and labor laws and standards, and City makes no representation, either legally and/or financially, as to the applicability or non -applicability of any federal, state and local laws to the Project, either onsite or offsite. Developer expressly, knowingly and voluntarily acknowledges and agrees that City has not previously represented to Developer or to any representative, agent or affiliate of Developer, or its contractor or any subcontractor(s) for the construction or development of the Project, in writing or otherwise, in a call for bids or otherwise, that the work and construction undertaken pursuant to this Agreement is (or is not) a "public work," as defined in Section 1720 of the Labor Code or under Davis Bacon. Developer knowingly and voluntarily agrees that Developer shall have the obligation to provide any and all disclosures or identifications as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or 882/036753-0123 2765748.6 a12/08/15 -20- regulation. hi addition to any other Developer indemnifications of City set forth in this Agreement, Developer shall indemnify, protect, pay for, defend (with legal counsel reasonably acceptable to City) and hold harmless the Released/Indemnified Parties from and against any and all loss, liability, damage, claim, cost, expense and/or "increased costs" (including reasonable attorney's fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction (as defined by applicable law) and/or operation of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (i) the noncompliance by Developer with any applicable local, state and/or federal law or regulation, including, without limitation, any applicable federal and/or state labor laws or regulations (including, without limitation, if applicable, the requirement to pay state and/or federal prevailing wages); (ii) the implementation of Section 1781 of the Labor Code and/or of Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation; and/or (iii) failure by Developer to provide any required disclosure or identification as required by Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, or any other similar law or regulation. It is agreed by the Parties that, in connection with the development and construction (as defined by applicable law or regulation) of the Project, including, without limitation, any and all public works (as defined by applicable law or regulation), Developer shall bear all risks of payment or non-payment of prevailing wages under applicable federal, state and local law or regulation and/or the implementation of Labor Code Section 1781 and/or by Davis Bacon, as the same may be amended from time to time, and/or any other similar law or regulation. "Increased costs," as used in this Section 3.9, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the construction and development of the Project by Developer. 3.10 Taxes and Assessments The Developer shall pay prior to delinquency all real estate taxes and assessments on the Site so long as the Developer retains any ownership interest therein. The Developer shall remove or have removed any levy or attachment made on the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to any sale or transfer of all or any portions thereof. Notwithstanding the above, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto, and nothing herein shall limit the remedies available to the Developer in respect thereto. 3.11 Right of the City to Satisfy Other Liens on the Site After Title Passes After the Developer has had written notice and has failed after a reasonable time to challenge, cure, or satisfy any liens or encumbrances on the Site which are not otherwise permitted under this Agreement, the City shall have the right but no obligation to satisfy any such liens or encumbrances, and City reserves the right to consider such failure a breach of this Agreement. In the event City elects to satisfy any such lien or encumbrance, Developer shall reimburse to City such costs as are reasonably incurred by City in satisfying such lien or encumbrance, including any late fees that may be accrued or assessed by the lien holder or the City. City's satisfaction of any such lien or encumbrance shall not be considered a waiver of 882/036753-0123 2765748.6 al2/08/15 -21- Developer's failure. Notwithstanding the above, the Developer shall have the right to contest the validity or amounts of any tax, assessment, or encumbrance available to the Developer in respect thereto. 3.12 Release of Construction Covenants Upon written request by Developer, and upon satisfactory completion of the construction of the Project, as evidenced by the City's issuance of a certificate of occupancy or other written documentation of successful completion of final inspection of the building (excluding any temporary certificate of occupancy issued by the City), City shall issue to Developer a Release of Construction Covenants as long as Developer is not in default under this Agreement or any documents related hereto. The Release of Construction Covenants shall be, and shall so state, a conclusive determination of satisfactory completion of construction of the Project. After the date Developer is entitled to issuance of the Release of Construction Covenants, and notwithstanding any other provision of this Agreement to the contrary, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of any such ownership, purchase, lease, or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by the covenants herein that survive the issuance of the Release of Construction Covenants and the covenants set forth in the City Regulatory Agreement. The Release of Construction Covenants is not a notice of completion as referred to in California Civil Code Section 3093. If City refuses or fails to furnish a Release of Construction Covenants after written request from Developer, City shall, within fifteen (15) days after the written request, provide the Developer a written statement of the reasons City refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the City's opinion of the action Developer must take to obtain a Release of Construction Covenants. If City refuses or fails to furnish the Release of Construction Covenants for the reason that specific minor non- life safety items or materials are not available or landscaping or other punch -list items are not complete and the cost thereof is less than two percent (2%) of the City Loan amount, as set forth in the Project Budget, City shall issue the Release of Construction Covenants upon the posting by Developer with City of a cash deposit, bond, or irrevocable letter of credit (in a form acceptable to City), at Developer' s option, in an amount representing one hundred percent (100%) of the fair value of the work not yet completed. Commencing on the date City issues a Release of Construction Covenants, and continuing throughout the term of the City Regulatory Agreement, Developer shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City Manager, the following types of insurance: i) "All Risks" property insurance on a replacement cost basis in an amount equal to full replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall contain no coinsurance provision and include coverage for earthquake to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for affordable housing developments in southern California. City shall be a loss payee under such policy or policies. 882/036753-0123 2765748.6.12/08/15 -22- ii) Business interruption, rental value, and extra expense insurance to protect Developer and City covering loss of revenues and/ or extra expense incurred by reason of the total or partial suspension or delay of, or interruption in, the operation of the Project caused by loss or damage to, or destruction of, any part of the insurable real property structures or equipment as a result of the perils insured against under the all risk physical damage insurance, covering a period of suspension, delay or interruption of at least twelve ( 12) months, in an amount not less than the amount required to cover such business interruption, rental value, and/ or extra expense loss during such period. iii) Boiler and machinery insurance in the aggregate amount of the full replacement value of the equipment typically covered by such insurance. 3.13 Limitation on Encumbrances Except as otherwise permitted by this Agreement Developer shall not mortgage the Site or any portion thereof or any interest therein, any other mortgages or conveyances for financing that encumber the Site or any portion thereof, without the prior written approval of the City Manager, which approval shall not be unreasonably withheld. 3.14 Holder Not Obligated to Construct improvements The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the Project or to guarantee such construction or completion, nor shall any covenant or any other provision in the City Regulatory Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon other than those uses or improvements provided for or authorized by the City General Plan, any applicable Specific Plan, and applicable zoning, as the same may be amended from time to time. 3.15 Notice of Default to Mortgage, Deed of Trust or Other Security Interest Holders: Right to Cure Whenever the City shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the Project, the City shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement who has previously made a written request to the City therefor. It is the duty of the entity making the request to provide the City with up to date contact information. Each such holder shall (insofar as the rights of the City are concerned) have the right, at its option, within sixty (60) calendar days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the security interest debt and the lien on its security interest. hi the event there is more than one such holder, the right to cure or remedy a breach or default of the Developer under this Section 3.15 shall be exercised by the holder first in priority or as the holders may otherwise agree among themselves, but there shall be only one (1) exercise of such right to cure and remedy a breach or default of the Developer under this Section 3.15. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or 882/03675M123 2765748.6 al2/08/15 -23- continue the construction or completion of the Project (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the City by written agreement satisfactory to the City. The holder in that event must agree to complete, in the manner provided in this Agreement, the construction to which the lien or title of such holder relates and submit evidence satisfactory to the City that it has the qualifications and financial responsibility necessary to perform such obligations. Any such holder properly completing such improvements shall be entitled, upon written request made to the City, to a Release of Construction Covenants from the City. 3.16 Failure of Holder to Complete Improvements In any case where, sixty (60) calendar days after an uncured default by the Developer in completion of rehabilitation under this Agreement, the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Site has not exercised the option to construct, or if it has exercised the option, has not proceeded diligently with construction, the City may purchase the mortgage, deed of trust or other security interest by payment to the holder of the amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the Site has vested in the holder, the City, if it so desires, shall be entitled to a conveyance of the Site from the holder to the City upon payment to the holder of an amount equal to the sum of the following: 1. The unpaid mortgage, deed of trust or other security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); 2. All expenses with respect to foreclosure, including reasonable attorneys' fees and trustee's fees; 3. The net expenses, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Site or part thereof; 4. The costs of any authorized improvements made by such holder; and 5. An amount equivalent to the interest that would have accrued on the aggregate of the amounts in Subparagraphs 1-4 had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the City. 3.17 Right of City to Cure Mortgage, Deed of Trust or Other Security Interest Default In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Site prior to the completion of the Project, and the holder has not exercised its option to complete the construction, the City may cure the default prior to completion of any foreclosure. In such event, the City shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the City in curing the default. The City shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be subject to mortgages, deeds of trust or other security interests executed for the sole purpose of obtaining funds to purchase and develop the Site as authorized herein. 882/036753-0123 2765748.6 al2/08/15 -24- 3.18 Hazardous Materials 3.18.1 Indemnitv The Developer agrees to defend, indemnify, protect and hold harmless the Released/Indemnified Parties from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, "Environmental Response Actions" (as defined in Section 3.18.2 below), claims, losses, damages, fines, penalties, expenses, "Environmental Response Costs" (as defined in Section 3.18.2 below) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees), occurring during and caused by Developer's use and occupancy of the Site, and resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials at, on, in, beneath or from the Site, unless caused by the negligence or willful misconduct of Indemnities. The Developer's defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Hazardous Materials, at the Developer's sole cost. Notwithstanding the foregoing or anything to the contrary contained herein, Developer's obligations pursuant to this Section 3.18.1 shall not extend to any Environmental Response Actions and/or Environmental Response Costs caused solely by the gross negligence or willful misconduct of the Released/Indemnified Parties. 3.18.2 Definitions a. As used in this Agreement, the term "Environmental Response Actions" means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, initiated or required in connection with any local, state or federal governmental or private party claims, including any claims by the Developer. b. As used in this Agreement, the term "Environmental Response Costs" means any and all costs associated with Environmental Response Actions including, without limitation, any and all fines, penalties and damages. C. As used in this Agreement, the term "Hazardous Materials" means any substance, material or waste which is (1) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," or "restricted hazardous waste" under any provision of California law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317); (7) defined as a "hazardous substance" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or its implementing regulations; (8) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601); or (9) 882/036753-0123 2765748.6 a12/08/15 -25- determined by a California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property. 3.19 Materiality The Developer acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of the Developer for the benefit of the City set forth in this Agreement are a material element of the consideration to the City for the performance of its obligations under this Agreement, and that the City would not have entered this Agreement unless the Developer's obligations were as provided for herein. 4. USE OF THE SITE 4.1 Affordable Housing Developer hereby covenants and agrees, for itself and its successors and assigns, to use and maintain the Site during the term of the City Regulatory Agreement only as a rental apartment housing project with twelve (12) Units, with each such Unit to be rented to and occupied by Eligible Tenants at an Affordable Rent, all as more fully described in the City Regulatory Agreement. 4.2 Uses In Accordance with City Regulatory Agreement The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof that the Developer and such successors and assignees, shall devote the Site to the uses specified in the City Regulatory Agreement, and this Agreement for the periods of time specified therein. The foregoing covenants shall run with the land. 4.3 Nondiscrimination Developer 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, rental, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof. The foregoing covenants shall run with the land. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and 882/036753-0123 2765748.6 a12/08/15 -26- paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. Notwithstanding the forgoing, with respect to familial status, the forgoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or venders in the premises herein leased. Notwithstanding the forgoing, with respect to familial status, the forgoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. 3. In contracts pertaining to the Site: "There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. Notwithstanding the forgoing, with respect to familial status, the forgoing shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. The foregoing covenants shall run with the land." The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City and City's successors and assigns, and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. 4.4 Effect of Violation of the Terms and Provisions of this Agreement The City is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting 882/036753-0123 2765748.6 al2/08/15 -27- the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. This Agreement and the covenants shall run in favor of the City, without regard to whether the City has been, remains or is an owner of any land or interest therein in the Site. The City shall have the right, if this Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other property proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. 4.5 Maintenance of the Site The Developer shall maintain the Project on the Site in conformity with the Newport Beach Municipal Code, City charter, county, state, and federal law, and the requirements of the City Regulatory Agreement, and shall keep the Site free from any accumulation of debris or waste materials. If, at any time, Developer fails to maintain the Site or any portion thereof, and said condition is not corrected within thirty (30) calendar days of receipt written notice from the City (or within sixty (60) calendar days of receipt of written notice from the City if such condition is not capable of correction within thirty (30) calendar days but Developer has commenced and is diligently pursuing such correction), the City may enter the Site or applicable portion thereof to perform the necessary maintenance thereon and Developer shall reimburse to City such costs as are reasonably incurred for such maintenance, including any late fees, penalties, interest, or other fees that may be accrued or assessed by the lien holder or the City. This covenant shall run with the land and shall remain in effect for the term of the City Regulatory Agreement. 5. DEFAULTS AND 5.1 Defaults -- General Subject to the extensions of time set forth in Section 6.3, failure or delay by either Party to perform any term or provision of this Agreement constitutes a default under this Agreement. If either Party defaults with regard to any of the provisions of this Agreement, the non -defaulting Party shall serve written notice of such default upon the defaulting Party. If the default is not cured by the defaulting Party within thirty (30) calendar days after service of the notice of default (or within such other period as is set forth herein), the non -defaulting Party shall be entitled to pursue whatever remedies to which such Party is entitled under this Agreement; provided however that if the default cannot reasonably be cured within such thirty (30) calendar day period, the defaulting Party shall have such additional time to cure as is reasonable under the circumstances, as long as the defaulting Party commences to cure within such thirty (30) calendar day period and diligently prosecutes such cure to completion. 5.2 Legal Actions 5.2.1 Specific Performance The non -defaulting Party, upon expiration of applicable notice and cure periods, shall be permitted, but not obligated, to commence an action for specific performance of the 882/036753-0123 2765748.6 a12/08/15 -28- terms of this Agreement, or to cure, correct or remedy any default hereunder or to obtain any other legal or equitable remedy consistent with the purpose of this Agreement. In this regard, Developer specifically acknowledges that City is entering into this Agreement for the purpose of assisting in the redevelopment of the Site and the provision of affordable housing and not for the purpose of enabling Developer to speculate in land. 5.2.2 Institution of Legal Actions; No Attorney's Fees Any legal actions must be instituted in the Superior Court of the County of Orange, State of California, or in the Federal District Court in the Southern District of California. In the event of any litigation between the parties hereto, the prevailing Party shall not be entitled to receive its attorney's fees and costs and such other costs incurred in investigating the action and prosecuting the same, including costs for expert witnesses, costs on appeal, and for discovery. 5.2.3 Applicable Law The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflict of law principles. 5.2.4 Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the City, service of process on the City shall be made by personal service upon the City Manager or in such other manner as may be provided by law. In the event that any legal action is commenced by the City against the Developer, service of process on the Developer shall be made by personal service upon any officer or director of the Developer and shall be valid whether made within or without the State of California or in such other manner as may be provided by law. 5.3 Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either Party of one (1) or more of 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 the other Party. 5.4 Inaction Not a Waiver of Default Any failures or delays by either Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 882/036753-0123 2765748.6 a12/08/15 -29- 5.5 Termination by the City In the event that prior to the City's provision to Developer of the City Acquisition Assistance: a. The Developer (or any successor in interest) assigns or attempts to assign this Agreement or any rights therein or in the Site in violation of Section 1.5 of this Agreement; or b. There is a change in the ownership of the Developer contrary to the provisions of Section 1.5 hereof, or C. The Developer is in material default hereof, and such default or failure is not be cured within thirty (30) calendar days, or for those defaults which cannot reasonably be cured within thirty (30) calendar days, commenced to be cured within said thirty (30) calendar day period and thereafter diligently prosecuted to completion, after the date of written demand therefor by the City; or d. The Developer fails to satisfy any or all of City Acquisition Financing Funding Conditions by the Outside Site Closing Date; then, at the option of the City, upon such written notice thereof to the Developer as may be set forth above, this Agreement shall be terminated, and thereafter neither Party shall have any further rights or liability against the other under this Agreement. In the event of termination under this section, the Developer shall refund to the City the full amount of the City Acquisition Assistance within ten (10) calendar days. 5.6 City's Option to Acquire Plans If this Agreement is terminated by the City, at the option of the City, which may be exercised in the City's sole and absolute discretion, the City shall have the right to purchase from Developer all materials, including without limitation, any and all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the rehabilitation of the Project on the Site ("Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site to date of the termination. City's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and City shall assume all risks in the use of the Plans. 6. GENERAL PROVISIONS 6.1 Notices, Demands and Communications Between Parties Written notices, demands and communications between the City and the Developer shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same-day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices 882/036753-0123 2765748.6 a12/08/15 -30- of the City and the Developer at the addresses specified in Section 1.3.1 and 1.3.2, respectively. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time to time designate by mail as provided in this Section 6.1. Any written notice, demand, or communication shall be deemed received immediately if delivered by hand or delivered by messenger in accordance with the preceding paragraph, and shall be deemed received on the third (3rd) day from the date it is postmarked if delivered by registered or certified mail in accordance with the preceding paragraph. 6.2 Conflicts of Interest No member, officer, official, or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 6.3 Enforced Delav: Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either Party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; tsunamis; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (except that the acts or failures to act of the City shall not excuse performance by the City); or any other causes beyond the control or without the default of the Party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, 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 fifteen (15) calendar days after the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Developer. The City Manager shall have the authority to administratively approve extensions of time on behalf of City. 6.4 Non -Liability of Officials and Employees of the City No member, official or employee of the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City, or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. 882/036753-0123 2765748.6 al2/08/15 -31- 6.5 Interpretation; Entire Agreement, Waivers; Attachments The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the City and the Developer, and all amendments hereto must be in writing by the appropriate authorities of the City and the Developer. Except as otherwise expressly provided, in any circumstance where under this Agreement either Party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. hereof. The exhibits and attachments to this Agreement are incorporated herein and made apart 6.6 Time of Essence Time is of the essence in the performance of this Agreement. 6.7 Maintenance of Books and Records Developer shall prepare and maintain all books, records, and reports necessary to substantiate Developer's compliance with the terms of this Agreement. 6.8 Right to Inspect City shall have the right, upon not less than twenty-four (24) hours' notice, at all reasonable times during business hours, to inspect the books and records of the Developer pertinent to the purposes of this Agreement. 6.9 Binding Effect of Agreement This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their legal representatives, successors, and assigns. This Agreement shall likewise be binding upon and obligate the Site and the successors in interest, owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Site. 6.10 Severability Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If, however, any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 882/036753-0123 2765748.6 a12/08/15 -32- 6.11 Counterparts This Agreement may be executed in one (1) or more counterparts, each of which, when this Agreement shall have been signed by all the parties hereto, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 6.12 Amendments to this Agreement The Developer and the City agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the Parties hereto, the Qualified Tax Credit Investor, or the Construction Lender, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The City Manager shall have the authority to approve, on behalf of the City, amendments to this Agreement. [End of Agreement — Signature page follows] 882/036753-0123 2765748.6 a12/08/15 —33— IN WITNESS WHEREOF, the City and the Developer have signed this Agreement on the respective dates set forth below. Dated: LCFZ 2 2015 Dated: Dated: Dated: /i 2015 2015 CITY is Mayor BEACH, a California and charter city ATTEST: � tl'1( Leilani I. Brown City Clerk APPROVED AS TO FORM: Aaron C. Harp ChM %z 16e1iZ- City Attorney COMMUNITY DEVELOPMENT PARTNERS, a California corporation Signed in Counterpart Eric A. Paine Chief Executive Officer 882/036753-0123 2765748,6 et2/08/15 -34- IN WITNESS WHEREOF, the City and the Developer have signed this Agreement on the respective dates set forth below. Dated: '2015 Dated: 2015 CITY OF NEWPORT BEACH, a California municipal corporation and charter city Edward D. Selich Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: Dated: 2015 Aaron C. Harp GAM City Attorney COMMUNITY DEVELOPMENT P:CA R RS a California corporation Dated: 12. - 09 2015 . Pame Chief Executive Officer 881036753-0123 2765748.6 a12.'0&95 -34- ATTACHMENT NO. 1 SITE MAP [SEE FOLLOWING PAGE] 882/036753-0123 2765748.6 x12/08/15 ' 1' 70S 279 226 2j8 2j� HP�p 274 oR 277 rryo RFs GR 2e �ry 7,79 23S 2,p7 22j 2'23 �g Newport 27S 220 Shores Park 660 SF4 sy ORP OR 600 2�6 2p6 �11QS? ftW . ty Weal Newport Park $930 / 5904 Newport 5 C 4sr e<r, 0 600 2�6 2p6 �11QS? ftW . ty Weal Newport Park $930 / 5904 Newport Beach Disclaimer: Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of Cid$0 Newport Beach and its employees and agents disclaim any and all responsibility from or relating to �E`�'eORr any results obtained in its use. 0 100 200 2 Imagery: 2009-2013 photos provided by Eagle r Feet Imaging w .eagleaerial.com r4(q:nndP � v�annx ATTACHMENT NO.2 LEGAL DESCRIPTION All that certain real property situated in the County of Orange, State of California, commonly known as 6001 Coast Boulevard and described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 a12/08/15 —1— ATTACHMENT NO.3 SCOPE OF DEVELOPMENT [SEE FOLLOWING DOCUMENT] 882/036753-0123 2765748.6 a12/08/15 ' 1- Request for Proposal No. 15-55 Affordable Housing Development NEWPORT SHORES 1. Cover Letter Cover Letter.................................7 2. Statement of Qualifications Developer or Service Provider Team ............10 Developer or Service Provider Experience....... 13 Financial Capacity ...........................24 References.................................26 3. Amount of Funds Requested Amount of Funds Requested .................. 31 4. Project Description Development Concept ...................... 34 Site and Property Information ................ 40 Location ................................... 40 Graphic Depiction of Proposed Project .........42 Eric Paine Chief Executive Officer epaine(@communitydevpartners.com Description of Management...................62 Evidence of Site Control ......................62 Community Outreach ........................66 5. Development Pro Forma Project Financing Summary...................72 Development Budget ......................... 73 Financing Sources and Uses...................74 Unit Mix and Income Analysis .................75 30 -Year Cash Flow ..........................76 6. Proposed Implementation Plan Proposed Implementation Plan ............... 83 7. Applicant Information Form Attachment A: Applicant Information Form .... 86 Kyle Paine President kpaine(a communitydevpartners.com D 1 CONINRINi I' PIA I;IORMI.n1 MRIMRS 3416 Via Oporto, Suite 301 I Newport Beach, CA 92663 949467.1344 I www.communitydevpartners.com 1. COVER LETTER RCDP CO MA9UNTI) D[MOPMPN"I PMH'INH6 November 11, 2015 Anthony Nguyen Purchasing Agent City of Newport Beach anguyen(@newportbeachca.gov Re: Request For Proposals No. 15-55 Dear Mr. Nguyen: Community Development Partners (CDP) and Mercy House are pleased to submit this response to the Request For Proposals No. 15-55. Newport Shores is the rehabilitation of a 12 -unit market rate apartment property into 12 units of affordable housing, 7 of which will be set aside for veterans. CDP is an experienced multifamily and mixed-use developer focused exclusively on creating and preserving vibrant affordable housing communities with a focus on California, Oregon, and Arizona. The company's principals have over 30 years of combined experience working with cities and public agencies to bring new investment into existing neighborhoods. The company was formed in 2011 by leaders in the field of residential housing development. With over $75 million in portfolio projects that have been awarded tax credits, a growing pipeline of future projects and a robust tax credit marketplace, CDP is an ideal partner for land sellers and public agencies. Being based in Newport Beach, we are particularly excited to lend our innovative placemaking expertise to the proposed Newport Shores project, as the opportunity to improve one's community is always a welcomed opportunity. Along with Mercy House, our non-profit general partner and service provider, we are confident that we would deliver a project that not only improves the lives of its residents, but also would be a welcomed enhancement for the local community. We are confident that we have met or exceeded the requirements of the RFP. As such: Site control: CDP has a binding commitment to acquire the property (document enclosed) Affordable for at least 30 years: Per the requirements of the project's tax credits, the property will remain affordable for a minimum of 55 years. Reasonable acquisition and construction costs, the ability to compete well in securing other/ competitive funding sources: As show in the included financials, CDP has underwritten realistic costs and the project project is well positioned to be very competitive for other funding sources. Leverage other financing sources: CDP has extensive relationships with best -in -class lenders and investors, and will utilize such for this project, including leveraging low income housing tax credit equity as well as: City -provided funds, VHHP funds, and Project Based Rental Assistance. Incorporate high quality design and amenities: As with all our projects, CDP is passionate about design and we employ high design and material standards, and Newport Shores will incorporate an award- winning design team. "Green" building practices and materials: At CDP's core we are committed to sustainability. The project will exceed local and state energy standards, and achieve certification through a recognized green rating program (such as LEED or Green Point Rated). Compatible with neighborhood settings: The structure will retain its existing massing and use, which fits well within its surrounding context. Appropriate community spaces, amenities, and services for the target population: We will incorporate appropriate community spaces/amenities and a robust services program through Mercy House including a community garden space and public art components created by local artists. Experience with successful affordable housing projects and the capacity to work cooperatively with the community: As discussed in detail throughout this document, CDP is highly experience and committed to developing affordable projects that benefits both residents and the community at large. Readiness of the proposed project to proceed: The project will not require any new entitlements and is currently ready for occupancy by target population. Management of affordable rental units: Buckingham Property Management, who currently manages 5,000+ units, will ensure on-going compliance and financial solvency throughout the affordability period. Consistent with the City's General Plan: The property is maintaining its existing legal use, which is compatible with the General Plan. Target extremely low-income, very low-income, or low-income households: As shown in the included unit/tenant mix, the project fully targets the appropriate income levels. Consider a range of households: As discussed, over 50% of the units will be set aside for veterans. The remaining units will be set for a range of income levels. Supportive services appropriate for the expected tenant population: Mercy House, a well-respected service provider, will ensure the needs of the resident population are met on an on-going basis. CDP hereby declares that the only person, persons, company, or parties interested in the proposal as principals are named herein; that the proposal is made without collusion with any other person, persons, company, or parties submitting a proposal; that it is in all respects fair and in good faith without collusion or fraud, and that the signer has full authority to bind the proposer. I can be reached at 949-554-3713, epaine(c)communitydevpartners.com, or at 3416 Via Oporto, Suite 301, Newport Beach, CA 92663. Sincerely, Eric Paine CEO 2. STATEMENT OF QUALIFICATIONS D P COMMUNIil D5P{IOPMLM P4R]NfIAN A. DEVELOPER OR SERVICE PROVIDER TEAM An oiaoccotionoI chart shotainq lilies of responsibdity as even as o list or team rnembei s and their dunes as Far[ crthe tecm. DEVELOPER: COMMUNITY DEVELOPMENT PARTNERS ERIC PAINE CEO Ownership: 85% SEAN ROBBINS KYLE PAINE Corporate Finance President Ownership: 5% Ownership: 10% Bruce Qu' ley, CPA Tire Winger Corporate Controller Asset Manager Lindsay Dutro Victoria Balentine Project Controller Administrative Eric Paine — Chief Executive Officer Mr. Paine is the CEO of CDP and focuses on corporate strategy and business development as well as overseeing the design and construction of all CDP projects. Eric also currently sits on the Board of Directors for two non -profits, The Ecology Center in San Juan Capistrano, CA and Alberta Main Street in Portland, OR. Prior to founding CDP, Mr. Paine co-founded Equity West Capital Partners, a Newport Beach real estate investment manager operating private equity funds targeting distressed assets with inherent value -add potential. Prior, Eric was Executive Vice President of Pacer Communities, a private residential developer based in Irvine, California where, in his five-year tenure, he was involved in developing and liquidating residential units accounting for over $115,000,000 in revenue. He directly 10 supervised the teams responsible for all stages of a project's development cycle — acquisitions, capitalization, design development, entitlements, and project management. Eric earned his BA in Economics with a minor in Accounting from the University of California, Los Angeles, a certificate in Light Construction Development Management from the University of California, Irvine, and is a licensed California Real Estate Broker and General Contractor. Kyle Paine — President Kyle Paine serves as President of Community Development Partners. Kyle manages the sourcing and underwriting for rehab and new construction projects for CDP, including managing each project through the cycle of due diligence, LIHTC application submittal, and the closing. Kyle also oversees the asset management of stabilized assets. Mr. Paine brings a dynamic background in real estate development to CDP's team. Prior tojoining CDP Kyle spent two years at Fairfield Residential, a national apartment developer, builder, and manager where he served as the Acquisition and Development Officer for the Pacific Northwest region and had comprehensive oversight of the sourcing of institutional grade market rate and affordable development sites. Kyle has his Bachelor of Arts in Psychology with a Minor in Business from the University of California at Berkeley. Kyle has worked in real estate brokerage of development projects since obtaining his California Real Estate Broker's License in 2005. Sean Robbins — Chief Financial Officer With over ten years of experience in real estate development finance and senior secured lending, Mr. Robbins focuses on financial product structuring, assets acquisition, and corporate finance. Sean's prior real estate experience includes co-founding Equity West Capital Partners, a Newport Beach real estate investment manager and founding Blackhawk Capital Group, a Newport Beach real estate advisory service and brokerage house. Sean also serves as a member of the board of directors of Eco Land Holdings, an international real estate development company. A Phi Beta Kappa graduate of the University of California, Los Angeles with a major in Business Economics and a minor in Accounting/Public Policy, Sean used his financial acumen to help Comerica Bank expand its commercial and real estate lending divisions. Sean laterjoined GMAC-Cerberus Capital, where he successfully helped fund over $100 million in development and construction financing for public and private companies. In addition to holding a Real Estate Broker's license, Sean is a CFA© Level I Candidate. Bruce Quigley — CPA Mr. Quigley is a Certified Public Accountant and the Controller for Community Development Partners. He is responsible for overall internal and external financial reporting and compliance, interfacing with outside CPAs on financial reporting and taxation related to affordable housing project requirements and regulations, and instituting, strengthening and monitoring related internal controls. After graduating with a Bachelor of Arts in Business Administration with a concentration in Accounting from California State University at Fullerton, he spent eleven years with the CPA firm Pannell Kerr Forster, managing audits of numerous companies in various industries, including non- profits, start-ups, and property management. Vacation Resorts International, a timeshare property management client hired him away to be their lead financial reporting executive. In his twenty year tenure there, the company became the largest independently owned international timeshare property management company in the nation. His responsibilities included oversight of all accounting and financial reporting for the company and 150 managed timeshare entities regionally, nationally, and internationally. His experience included working with the California Department of Real Estate on formulating start-up operating budgets, time share development and rehabilitation projects, ongoing property management financial reporting while working closely with owners and numerous Boards of Directors. SERVICE PROVIDER: MERCY HOUSE Reverend Jerome T. Karcher - Founder/Chairman Father Karcher was born and raised in Anaheim, California, as one of the twelve children of Carl and Margaret Karcher. He was baptized at Saint Boniface Church in Anaheim, California and attended the parish school for eight years. He then attended Mater Dei High School for one year and was graduated from Servite High School in Anaheim. Having attended the University of San Diego and Gonzaga University in Florence, Italy, he was graduated from Loyola University of Los Angeles, with a Bachelor of Arts degree in Psychology. He has also received a degree in Philosophy from the Dominican School of Philosophy and Theology at the Graduate Theological Union, Berkeley, California, where he also studied theology. Theological studies were completed at Saint John's Seminary in Camarillo, California, where a Master of Arts degree in Theology was granted. On February 12,1983 Father Karcher was ordained to the priesthood by Bishop William Johnson for the service of the Roman Catholic Diocese of Orange, California. He has served at St. Norbert Church in Orange, St. Anne Church in Santa Ana and St. Joachim Church in Costa Mesa, and is presently the pastor at St. Vincent de Paul Church in Huntington Beach, California since July 1, 1995. Fr. Jerome is the founder and Chairman of the Board of Mercy House Transitional Living Centers which serves and houses homeless men, women and children in Orange County at its various facilities. Organizational Chart RoardolDtrector Y Executive Director 'N 70IN Housing Dfreator Operations Development Director - - Director ... d D e lopm nt Program r DirectoProgram Director- ( ` Y—r.— Advocate O.C.ResideuHal O.C. Emergency Program Director Senlor Finenclal Graut Compliance Associate Development 18 Maam-- and Data Director Community Assoclate-Events rogra ogr \vJ our s Program Manage m[Door noting velopment Associate Coordinator rmoryand CM grecs Coach �HuiPm Resources Associate -G ants ommunity U^ utreac J Re ources nd Adm�Ass�fate a/nd�F�RP C //rdhv�a� �r \`a •,// • F SaMBernadllvo Ontario Access Center Staff Anaheim Checkl RaTtaveviceTec Center usingaud Ontario Housing and ♦ Te,e,,,,,. � Outreach Employment Navigator �y Ontario Outreach and 1♦ Engagement Staff Team Manager RSR1FIess Prevention San Bernardino Housing and and pid Rehs�suivg Employment Navigator San Bernardino Outreach Proeress.Coa<hes and Engagement Staff Team Manager '"MitslHonaland Perane�P nt opsing \`•r// progress Coaches Residential Coordinators Outreach Proeress.Coa<hes and Engagement Staff Team Manager '"MitslHonaland Perane�P nt opsing \`•r// progress Coaches Residential Coordinators S. DEVELOPER OR SERVICE PROVIDER EXPERIENCE A naaauve describmy regent affordable residentiol development and management expenence, with an emphos+s on experience gained in the lost f ve yeors on pnyects s,mi'o, to the one be,nq pioposed. Include project romp and type (_penal needs, -,Colo," Jorge fomiiy, etc.), pro!eet address, developer teom members, unit coum' and bcJfocm type, offordobility requirements, funding sources, cod project schedule ie your description. Iedude a descnpoon of how neighborhood input was solicited .Ind utilized in the development of these projects. GENERALPARTNER,DEVELOPER COMMUNM DPVEMPMERT PAR I M HS Sumary of Experience Housing Units Developed by Principals 3,690 Affordable Housing Units Owned or Under Development: 518 Key Representative / Contact Eric Paine, CEO and Founder 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 949.554.3713 epaine(@communitydevpartners.com Overview and Experience CDP is an experienced multifamily and mixed- use developer focused exclusively on creating and preserving vibrant affordable housing communities with a focus on California, Oregon, and Arizona. The company's principals have over 30 years of combined experience working with cities and public agencies to bring new investment into existing neighborhoods. The company was formed in 2011 by leaders in the field of residential housing development. With over $75 million in portfolio projects that have been awarded tax credits, a growing pipeline of future projects and a robust tax credit marketplace, CDP is an ideal partner for land sellers and public agencies. CDP is seeking opportunities to: Develop successful new multifamily affordable communities Renovate existing multifamily properties into affordable communities Partner with cities and other public agencies to evaluate development scenarios CDP is committed to improving the communities in which it works by not only providing quality affordable housing developments, but also ensuring that all CDP developments are sustainable and enhance the fabric of the overall community. Our infill communities are more thanjust housing. Our designs focus on creating centers of culture and education for the surrounding community in addition to fulfilling the basic housing needs of our low-income residents. CDP has a strong focus on the incorporation of the local arts community by integrated artwork and ongoing art programming into the supportive services. Since 2012, CDP has received tax credit allocations on 7 projects consisting of total project costs of over $75 million. In addition to those already owned by the company, CDP currently has a pipeline of 5 sites for future development. CDP currently owns or is planning projects in the California cities of Morgan Hill, Glendale, Santa Ana, Midway City, and Vacaville; Portland, Oregon; and Arizona cities of Mesa and Phoenix. CDP was founded and is based in Newport Beach, California. Z m F 9 0 ti x 0 N M 15 FEATURED PROJECT: THE LODGE 515 Barrett Ave., Morgan Hill, CA The Morgan Hill Retirement Residence project is a 138 unit senior housing community that has come to fruition after several years of dedicated teamwork. The project has evolved through many iterations of design improvements that began in 2010. At the core, the project's mission consisted of creating a life -enhancing community for seniors that reflected our values of intelligent design, integration of sustainable building principles, and a human -centered solution to affordable housing. The amenity enriched project encourages our residents to interact with one another, relax in an environment they can call home, and to thrive within a well amenitized community. The project consists of one and two bedroom units that provide for independent living. The common area spaces boast a common dining hall, commercial kitchen, beauty salon, theater, card room, and a reading room. Three meals are offered every day through a meal program managed by local non-profit Loaves & Fishes with a focus on locally sourced, sustainable, and healthy ingredients — all provided at no cost to the residents. Lease -up for this project finished July, 2014, well ahead of our partnership closing projections and the project has converted into permanent financing. For neighborhood outreach, we worked closely with local senior center and organizations involved in aging resources to develop an extensive amenity package that rivals any market rate senior living facility. Housing Solution: Senior Affordable Housing (55+) Government Contact: Leslie Little — Asst. City Manager — 408-778-6480 Number of Units: 138 units Lot Size: 5.3 Acres Unit Size: 546 —1,034 Square Feet Unit Mix: 1101 Bed/1 Bath, 28 2 Bed/2 Bath Parking Provided:1 Space Per Unit Affordability: 50%/60% AMI Current Status: Stabilized Financing: 4% LIHTC & Tax Exempt Bonds Sustainability: Green Point Rated Score: 108 Developer: CDP Architect: Anderson Architects Contractor: SBI Builders Property Management: Buckingham Property Management (BPM) Non -Profit Partner: Foundation For Affordable Housing (FFAH) Service Providers: LifeSteps and in-house Resident Services Coordinator Construction: November 2012 -January 2014 FEATURED PROJECT: CYPRESS SENIOR LIVING - 311 E. Cypress St., Glendale, CA Cypress Senior Living consists of the acquisition, rehabilitation and conversion of an existing two- story 18 -unit market rate apartment building in need of upgrading, into a fully rehabilitated affordable senior rental project. Upgrades that were incorporated into the building include all new unit interiors, a community garden, and art work from local artists including a community mural. Financing for the project came from the sale of 9% rehab and 4% acquisition Low Income Housing Tax Credits, which the project was awarded in June of 2013. The project consists of 13 studio units and 4 one bedroom units with an additional studio for the onsite manager. Rent restrictions include 62+ years of age and 6 units rented with Veteran preference. Property amenities include a community area with resident computer for internet and printing access, in addition to on-site social services offered to the residents and 10 surface parking spaces. Affordability levels will be at 30%, 35%,40%, 50%, and 60% AMI levels. The building is a 1920's brick building in the heart of Glendale with immediate access to public transportation, entertainment, and dining options. The Glendale Housing Authority supported the project by providing $1,447,523 in HOME funds for the rehab in addition to providing a below market permanent loan which eliminates the need for conventional permanent financing. The project achieved over a 25% energy efficiency improvement from the buildings original energy consumption. Cypress Senior was completed in May, 2014 and was leased up using a city sponsored lottery program which attracted 2,680 applicants (an average of over 150 per unit). For outreach, we collaborated with local artisans to provide a community created public mural, community garden (with regular monthly programming/planting/harvesting for residents led by local expert) designed and built by The Ecology Center, original artwork for common area spaces sourced by non-profit Art From The Ashes, and original custom furniture built by local resident and furniture designer. Housing Solution: Senior Affordable Housing (62+) Government Contact: Mike Fortney, Senior Housing Project Manager - 818-548-3723 Number of Units: 18 Units Lot Size: .25 Acres Square Foot Range: 344 - 672 Square Feet Unit Mix: 14 Studios, 41 Bed/1 Bath Parking Provided: 10 Spaces Affordability: 30%/35%/40%/50%/60% AMI Current Status: Stabilized Financing- 9% LI HTC, Housing Authority HOME Funds Developer: CDP Architect: Egan Simon Architects Contractor: ICON Builders Property Management: Buckingham Property Management (BPM) Non -Profit Partner: Integrity Service Provider: Central Valley Coalition For Affordable Housing Construction: November 2013 -March 2014 FEATURED PROJECT: EL RANCHO 719 E Main St., Mesa, AZ The EI Rancho project is an acquisition/demolition/ new construction project of a blighted motel turned apartments in Mesa, Arizona. CDP is constructing a community of 66 units in a 4 story structure that will serve to house families with children. The local community has a large artist contingent as the City of Mesa has invested heavily in pursuit of creating a local culture conducive to supporting the arts. We have been working closely with local artists as well as the City of Mesa's Art Center to create a product that will engage the community in arts and will allow for the installation of public art pieces. This will be the first project of its type in Arizona. All of the units are 2 bedroom and 3 bedroom floor plans and, in addition to the public art spaces, there is also a large communal gallery, a flexible studio space for children's after school programming, a media room, computer lab, an outdoor eating area, a community garden (in cooperation with Mesa Urban Garden), and a pool. The architecture of the building is a contemporary interpretation of a desert hacienda with clean lines,ground floor storefront, metal awnings, and embedded tiles on the facade in a depiction of rain drops. As water indicates an oasis in the desert so too will EI Rancho be an oasis for the residents who will call it home. Project completion and C of O were achieved in June, 2015. For outreach, this project involved collecting input via focus groups and working with local business leaders to develop a concept and design that would act as a catalyst to spur additional revitalization efforts in the downtown Mesa (AZ) neighborhood. We partnered with a local artist whose family has been in Mesa for generations and he created public and private art installations. His wife's non-profit, Cultural Coalition, is providing ongoing art classes for the the afterschool program hosted at the property for residents' children. Housing Solution: Permanent Rental Housing Government Contact: Jeff McVay, Manager of Downtown Transformation, 480-644-5332 Number of Units: 66 Units Lot Size: 1.4 Acres Unit Size: 842-1,072 Square Feet Unit Mix: 5 2 Bed/1 Bath, 36 2 Bed/2 Bath, 25 3 Bed/2 Bath Parking Provided: Structured parking, 69 spaces Affordability: 40%/50%/60% AMI Current Status: Under Construction Financing: 9% LIHTC, ADOH HOME/HTF, City of Mesa HOME Sustainability: ADOH Prescriptive Path Developer: CDP Architect: Perlman Architects Contractor: ICON Builders Property Management: Celtic Property Management Service Providers: A New Leaf, Cultural Coalition, Mesa Urban Garden Construction: May 2014 -June 2015 FEATURED PROJECT: BUTTERFIELD RETIREMENT 16505 Butterfield Blvd., Morgan Hill, CA The Butterfield Retirement project is a new construction project of a fallow plot of land that has not been utilized for decades. The roughly 4 acre parcel is adjacent to The Lodge community that CDP developed from 2012-2014. The site will be improved with a new, 114 unit senior congregate care apartment community. The amenity enriched project will encourage our residents to interact with one another, relax in an environment they can call home, and to thrive within a well amenitized community. The project will act as a complementary project to The Lodge and will be nicely appointed with finishes that are true to the architecture of the building. The project consists of one, two and three bedroom units that provide for independent living. The common area spaces boast a common dining hall, commercial kitchen, theater, card room, library, and craft room as well as an integral outdoor dining area. Three meals will be offered every day through a meal program managed by local non-profit Loaves & Fishes with minimal, if any, cost to residents. The project outdoor courtyards provide ample outdoor recreation opportunities and an abundance of community gardening areas. Groundbreaking is scheduled to take place Fall 2015. Housing Solution: Senior Affordable Housing (55+) Government Contact: Leslie Little — Asst. City Manager— 408-778-6480 Number of Units: 114 Units Lot Size: 4.0 Acres Unit Size: 550 —1,000 Square Feet Unit Mix: 601 Bed/1 Bath, 24 2 Bed/1 Bath, 12 2 Bed/2 Bath, 18 3 Bed/2 Bath Parking Provided:1 Space Per Unit Affordability: 50%/60% AMI Current Status: Planning Financing: 4% LIHTC &Tax Exempt Bonds Sustainability: Green Point Rated FEATURED PROJECT: ROCKY HILL Rocky Hill Rd., Vacaville, CA VCH-Rocky Hill is a proposed 92 -unit affordable scattered site development involving acquisition, rehabilitation and new construction. Community Development Partners (CDP) and Vacaville Community Housing (VCH) have formed Trower Housing Partners LP, which will acquire, construct and manage the proposed development. The partnership plans to acquire and rehab Meadows Court apartments, an existing affordable apartment community totaling 51 units currently controlled by Vacaville Community Housing. The property is made up of 2-bedr000m Townhome style units, currently rent restricted with AMI levels from 50% to 80% and carry existing soft debt made up of RDA and HOME funds. The scope of rehab will include unit interior and building systems upgrades to improve energy efficiency, enhance living conditions and ensure long term project viability. The new construction portion of the development will entail the acquisition of a 1.42 -acre City -owned vacant parcel for construction of 41 new apartment units targeting families and single Veterans. The site plan includes 11 one -bedrooms, 15 three-bedroom and 15 four-bedroom units with surface / tuck -under parking, common areas and onsite property manager. Both properties will be leased and managed by a third party property management company and will include supportive resident services. Housing Solution: Family & Supportive Housing, Veteran Government Contact: Emily Cantu, Housing & Redevelopment — 707-449-5675 Number of Units: 92 Units Size: 4 Acres Unit Size: 640 -1280 Square Feet Unit Mix: 21 Studio/1 Bed/1 Bath, 412 Bed/2 Bath, 15 3 Bed/2 Bath, 15 4 Bed/2 Bath Parking Provided: 1.5 Spaces Per Unit Affordability: 15%-60% AMI Current Status: Entitlements Financing: 4% LIHTC & Tax Exempt Bonds plus RDA and HOME funds, VHHP, Project Based Vouchers Sustainability: LEED Platinum FEATURED PROJECT: CASCADIAN TERRACE 5700 N. Kerby, Portland, OR Cascadian Terrace is an existing 103 -unit affordable apartment community that was purchased by Community Development Partners as part of a preservation strategy. The 4 -story property is made up of studio, 1 -bedroom and 2-bedr000m units, currently rent restricted with AMI levels at or below 60% based on LIHTC that were allocated to the property in 2002. The property operates under a Section 8 project - based HAP contract. The property is located in a rapidly gentrifying neighborhood of N E Portland and CDP has partnered with Portland Community Reinvestment Initiatives as the project Non -Profit sponsor. In 2018 CDP will apply for new 4% LIHTC and complete a full interior renovation while keeping the tenants and HAP contract in place to preserve long term affordability and minimize displacement. Housing Solution: Low Income Housing Number of Units: 103 Units Size: 1.14 Acres Unit Size: 332 - 997 Square Feet Unit Mix: 86 Studio/1 Bath, 161 Bed/1 Bath, 12 Bed/1 Bath Parking Provided: 19 Spaces Affordability: 60% AMI Current Status: Stabilized Financing: LISC Acquisition Loan, HAP Contract FEATURED PROJECT: IST STREET CARE HOME 2151 East 1st St., Santa Ana, CA 1st Street Care Home consists of the acquisition, rehabilitation and conversion of an existing two-story 77 - unit motel in need of upgrading, into a permanent supportive housing project. Upgrades to be incorporated into the building include all new unit interiors, adding community room, offices, common area kitchen, and laundry room. Financing for the project will come from the sale of 4% Low Income Housing Tax Credits along with Tax Exempt Bond Financing. The project will operate under the City of Santa Ana's Care Home definition and will not have kitchens but will have access to a shared kitchen as well as access to meals provided by a local non-profit. Property amenities include a community area with resident computer for internet and printing access, in addition to on-site social services offered to the residents, a pool, onsite laundry and 61 surface parking spaces. Location: 2151 East 1st St., Santa Ana, CA Housing Solution: Permanent Supportive Housing Number of Units: 72 Units Size: 1.30 Acres Unit Size: 640 Square Feet Average Parking Provided: 61 Spaces Affordability: 15% - 60% AMI Current Status: Entitlements Financing: 4% LIHTC & Tax Exempt Bonds Project Based Vouchers (through Mercy House partnership) Sustainability: LEED FEATURED PROJECT: POTTERS LANE 15171 Jackson St. Midway City, CA Potters Lane is a proposed 16 -unit permanent supportive housing development involving new construction utilizing repurposed shipping containers. Community Development Partners (CDP) is the Developer for American Family Housing (AFH) and will oversee the project through to stabilized operations after which time AFH will manage the ongoing operations. The underutilized property will be improved with 16 studio apartments restricted with AMI levels from 15% to 40% and 6 of the units will be set aside for Veterans. The property will be leased and managed by AFH and will include supportive resident services onsite and at the AFH headquarters next door. Housing Solution: Permanent Supportive Housing Number of Units: 16 Units Size: 0.41 Acres Unit Size: 425 Square Feet Unit Mix: 16 Studio/1 Bath, Parking Provided: 5 Spaces Affordability: 30%-60% AMI Current Status: Entitlements Financing: VHHP, HOME, AHP, AFH Equity Sustainability: LEED Platinum 32 23 FEATURED PROJECT: THE MARQUEE 620 N 2nd Ave., Phoenix, AZ The Marquee is a 1958 building which exhibits excellent mid-century desert modern architectural elements and was begging to be restored after several decades of neglect. CDP chose the neighborhood for the project based on the transit - oriented, vehicle independent, urban location in the heart of Roosevelt Row Arts District. The building was selected based on the capacity for transformation through an upcycle of an existing structure which would provide a high quality of life to income restricted seniors. The project also features a large mural, a resident herb garden and a rotating gallery of local artists work. Our residents are energized and empowered by the urban location, the sustainable measures incorporated, and the smart interior finishes. For neighborhood ourreach, we polled neighborhood groups and worked with organizations such as the Roosevelt Row Arts District to understand needs of community, create a project that would best accommodate local need from seniors yet be contextual. Housing Solution: Senior Affordable Housing (62+) Government Contact: Jeanne Redondo — ADOH Rental Programs Administrator — 602-771-1031 Number of Units: 34 Units Lot Size: .55 Acres Unit Size: 600 Square Feet Unit Mix: 341 Bed/1 Bath Parking Provided: 1 Space Per Unit Affordability: 40%/50%/60% AMI Current Status: Stabilized Financing: 9% LIHTC/State Housing Trust Fund Sustainability: ADOH Prescriptive Path Developer: CDP Architect: Anderson Architects Contractor: Adolfson Peterson Property Management: Biltmore Property Management Service Provider: La Frontera Construction: October 2012 -March 2013 SERVICE PROVIDER / NON-PROFIT CO -GENERAL PARTNER I`TF�Y HCV$E Affordable Housing Units Serviced 516 Contact Information Linda Wilson 807 N Garfield, Santa Ana, CA 92701 I i nd aw(c) m e rcyh ou se. n et 714.836.7188 Overview / History Mercy House's primary focus is providing quality permanent housing and services to additional populations that range from extremely low to moderate -income households. Father Jerome T. Karcher first began reflecting seriously on the plight of the homeless in 1987 while he was Associate Pastor at Saint Norbert's Church in Orange, California. His first efforts were to organize a small group of friends to assist the homeless. As Associate Pastor at Saint Anne Catholic Church in Santa Ana, he became more aware of the needs of both homeless and immigrant populations. One experience concerning the needs of an immigrant young man who was living on the streets in an abandoned garage particularly moved him to respond to the local situation of homelessness. This decision inspired him to found Mercy House as a not-for-profit charitable corporation. Housing Placement During the 2013-2014 fiscal year, Mercy House set a goal to prevent or end the homelessness of 500 people. They were able to secure and maintain stable housing for 566 individuals who came through their doors! Homeless Prevention Mercy House's Homeless Prevention Program rescued 64 families, including 153 men, women and children, from losing their homes, falling into homelessness and entering the shelter system. Emergency Shelters and Services This year, Mercy House served 4,353 homeless individuals; meeting immediate needs an providing connections to restore dignity and stability. This includes 2,010 people through their Emergency Shelter Programs, 535 through their Family Redirection Program, 1,384 at the Ontario Access Center, and 424 at the Anaheim Check in Center. Permanent Housing Mercy House's ongoing permanent housing programs were able to provide housing to 266 unduplicated individuals; including 177 people through Rapid Re -Housing, 22 through their Shelter Plus Care program, 34 in their Master Leasing Program, and 93 in their affordable housing programs. Transitional Shelter This year, Mercy House served 198 homeless men, women and children in their transitional shelters; of those 87% successfully transitioned into their own stable housing, or remain active in our programs. C. FINANCIAL CAPACITY Description of financuol strength and obdity to obtain prolect hnonang, ;:nd to provide suifficient equity {cr the su:_cesstul comp!et,on c1 the uroposed project_ CDP is well capitalized with over $70 million dollars in active projects under management in which CDP is the General Partner. The Company has no underperforming or overvalued projects that will distract management or tie-up capital. CDP has been in discussions with several potential lenders and is planning on closing the acquisition transaction using loan product such as the Golden State Acquisition Fund from CenturyHousing. Century is a leading Community Development Financial Institution (CDFI), whose lending activity has resulted in the development and preservation of more than 24,000 affordable homes and apartments in communities throughout the state. CDP has an approved term sheet from Century and has started or completed all of third party reports needed. Include a descnprioo oT current relationships with moio; lei ding rsr,tutions. The following financial partners have been involved in recent transactions with CDP and are provided as professional financial references. LISC (www.lisc.org) Role: Lender T TCI Affordable Housing Units Financed: 313,400 LISIC Key Representative: Celia Smoot, National Housing Director Email: Csmoot(o)lisc.org I Tel: 215.370.0919 Boston Financial (www.bfim.com) Bos,rON FINANCIAL Role: Tax Credit Investor Affordable Housing Units Invested In: 169,000 Tax Credit Investments Under Management: $9,200,000,000 Key Representative: Roy Faerber, Senior Vice President Email: Roy.faerberpbfim.com I Tel: 310.860.1321 Projects: Lodge (tax credit equity - syndicated via BF to Mass Mutual); Cypress (tax credit equity - syndicated into multi -investor fund) Citi (www.citi.com) Role: Construction Lender + TW `1b Total Loans Originated For Affordable Projects: $3,222,000,000 in 2014 (V' Key Representative: Mike Hemmens, Director Email: mike.hemmens(cDciti.com I Tel: 805.557.0933 Projects: Cypress (construction); , The Lodge & Butterfield (construction & permanent loans) Alliant Capital (www.newportpartners.com) Role: Tax Credit Investor Affordable Housing Units Invested In: 13,300 Key Representative: Ruby Dhillon, Vice President Email: rdhillon(o)newportpartners.com I Tel: 714.623.3196 Projects: EI Rancho (tax credit equity syndicated to JP Morgan) AJ&' ^ L- ` , A N T Chase (www.chase.com) Role: Construction Lender Total Loans Originated For Affordable Projects: $1,287,000,000 in 2014 Key Representative: Alice Carr, Western Regional Manager Email: alice.carrpchase.com Tel: 213.621.8396 Projects: EI Rancho (construction loan) CHAS E 7 L The developer v hich is selected fa- fecoinmeodotion to G:y Courcil, or if o partnership, the team members who will iltoirl on oi�Qersty interest in the orolect, will be required to submit complete f nonc�ol statements for he lost three yeors 8ecouse of the possibility of public retards requests, the City cannot quorontee thot these statements will remoin con f ,Jent.ol. Should CDP be selected for recommendation to City Council, CDP agrees to submit complete financial statements for the last three years. CDP understands that because of the possibility of public records requests, the City cannot guarantee that these statements will remain confidential. D. REFERENCES Inctuds a liscc 4 at 'cosi three ���rence f m pubs . 7ger,cy' hu es a"� ,Full nomes, contact mformcti -n, and identification j ih2 pri;.re ,sJ worker,' on FINANCIAL REFERENCES CDP is pleased to provide the following financial references. The financial references are able to detail their relationship, investments and experience working with CDP. Investor Entity Contact Phone Email/Web Address Projects Investor Entity Contact Phone Email Address Projects Lender Entity Contact Phone Email Address Projects Lender Entity Contact Phone Email Address Lender Entity Contact Phone Email Projects 24 27 Boston Financial Investment Management, LP Roy Faerber, Senior Vice President - Equity Production 617-488-3390 roy.faerber(@bfim.com I www.bfim.com 1801 Century Park East, 22nd Floor, Los Angeles, CA 90067 Lodge (tax credit equity); Cypress (tax credit equity - syndicated into multi -investor fund) Alliant Capital Ruby Dhillon, Vice President 818-668-2819 ruby.dhillon(a alliantcaptial.com 21600 Oxnard Street, 12th Floor, Marquee (tax credit equity) Woodland Hills, CA 91367 Citi Mike Hemmens, Director, Citi Community Capital 805-557-0933 mike.hemmens(@citi.com 325 E Hillcrest Dr., Suite 160, Thousand Oaks, CA 91360 Lodge (construction and perm) LISC Celia Smoot, National Director of Housing 804-358-2421, ext. 26 csmoot(@Iisc.org 413 Stuart Circle, Suite 300, Richmond, VA 23220 Chase Alice Carr, Western Regional Manager, Community Development Banking 213-621-8396 alice.carrpchase.com EI Rancho (construction loan) GOVERNMENT REFERENCES The references provided below will detail their time and experience currently working with CDP on public/ private partnerships as part of our affordable communities. City of Glendale Contact Mike Fortney, Housing Project Manager Email mfortney(@ci.glendale.ca.us Phone 818-548-3723 Address 141 N. Glendale Ave., Suite 202, Glendale CA 91206 Contact Peter Zovak, Deputy Director of Housing, Community Development Email pzovakPglendaleca.gov Phone 818-548-3111 Address 141 N. Glendale Avenue, Room 202, Glendale, CA 91206 Projects Cypress Senior Living City of Mesa Contact John Wesley, Planning Director Email john.wesley(@mesaaz.gov Phone 480-644-2181 Address 55 N. Center St., Mesa, AZ 85201 Projects EI Rancho City of Morgan Hill Contact Mayor Steve Tate Email steve.tate(@morganhill.ca.gov Phone 408-778-6480 Address 17555 Peak Avenue, Morgan Hill, CA 95037 Projects The Lodge; Butterfield Retirement 3. AMOUNT OF FUNDS M __w t 9'C D P (ONMUN I) MNHOPMevi MRINF$G 30 34 AMOUNT OF FUNDS REQUESTED CDP anticipates requesting $1.975 million of funds, as a residual receipts loan, to purchase and rehabilitate the 12 -unit subject property. The funding will be structured as a loan so that the funds can eventually be redeployed by the City A detailer Development Pro Forma is available in Section 5 of this document. 4. PROJECT DESCRIPTION RCDP (OMMU;vm owH,0P%HNl rwr[NfRa A. DEVELOPMENT CONCEPT Thr a-velopmen; Inr the site or e de_Crlrt,,, (with photographs) of the site, building, proposed building square footage, number and size of units' bedrooms, total parking spoces, proposed ingress and egres, proposed rents and tenant incomes, any special needs groups to be se!jeJ omen!ties to be provided to thy^ tenants, and resident monoge!'s unit. If there ',,ill not be o resident monagert�,)r o rentol P1liect, describe in detoi! hov, the project will be managed PROPERTY DESCRIPTION Constructed in 1963, this 12 -unit, Newport Beach property is one of very few buildings of this size in all of Newport Beach. This is one of the few buildings exceeding four units in the immediate West Newport Beach area including the peninsula. The Newport Shores apartments are located in the coastal and beach -adjacent area known as West Newport. All units are one-bedroom/one- bathroom, some with largebalconies. There are ten covered carports, and three units come with an enclosed garage. CDP will complete minimal repairs to the building until the tax credit financing is awarded at which time a substantial renovation of the interior units will take place as well . Our General Contractor has walked and inspected the property already. Given the small number of units and relative condition of the building, we have in-depth knowledge of the property's physical condition. PROPERTY SUMMARY Units 12 Year Built 1963 Total SF 4,825± Parcel Number 045-114-15 Buildings 2 -Story, Garden -Style Construction Type Frame & Stucco Roof Type Flat Built -Up 3 Parking 10 Carport Spaces, 3 Enclosed Garages Ingress/Egress Via PCH or 60th Street UNITAMENITIES Granite Countertops* New Kitchen Appliances' New Flooring* Balconies* * Select Units COMMON AREA AMENITIES • Three Enclosed Garages Ten Carports Laundry Room Private Swimming Pool Locatedjust OF Pacific Coast Highway Nearby Amenities Additionally, there will be offsite services provided by Mercy House (see Statement of Qualifications for detailed overview) SPECIAL NEEDS GROUPS SERVED Seven (7) units will be set aside for Veterans, six with project based rental assistance and one not eligible for the rental assistance. PROPERTY MANAGEMENT The project will be managed by Buckingham Property Management, who currently has 5,000+ units under management. The management company would handle day-to- day operations, including compliance, leasing and marketing, maintenance, rent collection and lease enforencement, as well as other customary management duties. Since 1974, its founder Paul Chubick managed a broad range of properties throughout California while developing a special knowledge of residential properties in cities both large and small of the central San Joaquin Valley. Buckingham currently manages over 5,000 units in a wide range of conventional and compliance apartment communities. Buckingham Property Management has extensive experience in working with clients to develop new sites and successfully complete the rent up process quickly. With over 30 years of experience with specialized housing programs such as Sec 42 Tax Credit, RD 514-515, HUD, HCD, AHP, Bond and CalHFA; Buckingham has the proven track record to handle the complexities of regulations and requirements that are an ever increasing burden in residential properties. Buckingham Property Management has extensive experience with the initial lease UNIT MIX AND TENANT INCOME up, rehabilitation, and ongoing operation of Conventional -Compliance apartment projects throughout California. Expertise in quickly achieving and then maintaining high occupancy at competitive rents combined with strong cost control and economy of operations has resulted in outstanding satisfaction by our clients. Services will be provided by Mercy House. PROPERTY PHOTOS On the following pages, please find photographs of the site and property in its current condition. 1 Bed -1 Bath - VASH 30% 6 $1,475 $42 $1,433 $8,598 $103,176 1 Bed -1 Bath 40% 2 $703 $42 $661 $1,322 $15,864 1 Bed -1 Bath 50% 3 $878 $42 $836 $2,508 $30,096 1 Bed -1 Bath - Non-VASH Vet 60% 1 $1,054 $42 $1,012 $1,012 $12,144 Totals 12 $13,440 $161,280 I .. - MINI I NIA lit �. �����\2 � � /�.1� : y� � \\� � � � � � / � E .� ~�� /yam � /\ y� . \\\2. \,»< «�« ��« }. .., ,. .?��s. � y- ` \�� �:& . � . � �. &»��.. �. � �y\\�,�����. y .�. �» \/`\ \�\:\\ � 2�`%}J� � °«\v°\\ »� « � r. -: B. SITE AND PROPERTY INFORMATION Rovide basic cite in,"ormoboo suds as property address, lot Oren, esisonu uses, current General Plan desigootion and zoning, consistency vrith zoning oris rezcnmq is required PROPERTYADDRESS 6001 Newport Shores Drive Newport Beach, CA 92663 (APN: 045-114-15) LOT AREA 7,044 square feet (0.16 acres) EXISTING USE(S) Multi -family Apartments CURRENT GENERAL PLAN DESIGNATION / ZONING CV: Visitor Serving Commercial Ns 6 :. T1 �v ^s CONSISTENCY WITH ZONING As the project is a rehab of an existing property and neither the use nor the unit count will change, the property is consistent with the current zoning and use. As such, no rezoning or change of use is required. 40 41 C. LOCATION Descnhe the Proper;,, location, neighhortioo transportotion options, loco) services, and crnenities ,vrrhin close Proximity to the s,te. LOCATION / NEIGHBORHOOD The Newport Shores Apartments are situated in the city of Newport Beach, located on the Pacific Coast of central Orange County, which boasts 176 miles of coastline and is renowned for its quality residential neighborhoods, beautiful coastal lands and harbor, excellent fishing, surfing, boating opportunities, shopping venues, ecological preserves, and festivals. Newport Beach has nearly reached build -out, which has resulted in very strict new development guidelines. Economic development efforts have been directed toward improving existing villages and commercial structures. Nearby colleges include the University of California at Irvine (UCI) (24,000 students), Concordia University, the University of Phoenix -Southern California Campus (18,075 students), Coastline Community College (2,940 students), and Orange Coast College (13,224 students). Major employers include Hoag Memorial Hospital (2,700 employees), Pacific Mutual (2,020 employees), and Rockwell International (1,700 employees). Fashion Island, a local shopping venue, attracts millions of visitors annually. Other retail, recreational and historic attractions include Balboa Island, Balboa Village, Cannery Village, McFadden Square, Corona del Mar, and Mariner's Mile. Local air travel is provided by The John Wayne Airport which serves as the hub to Newport Beach and Orange County, and is only a 15 -minute drive from the property. TRANSPORTATION OPTIONS (BUS STOPS) 8 M 0 A nn. w:en Y prv:xN Owemrurbx. y — 0 ti 't m n A 0 0:.. 0:25-MILES 0;50-MILES "-0:50-MILES--"' LOCAL SERVICES AND AMENITIES . • • AmM O • • • C -.1-MILE--` 2-MILE 3-AAILE ® 4-MILE C� i� t. 1. Banks Retail / Entertainment Grocery Stores/Supermarkets Restaurants Medical / Social Servicss Schools / Libraries 0 Parks D. GRAPHIC DEPICTION OF PROPOSED PROJECT Proved- opnc �.:_�ar `rhe i�rop F1 �� �iect -snn, el,�� ...e .,nd �IFvaoori. Please see updated architectural and design package on the following pages. 42 43 ASSESSOR MAP AtMREOIOP(wuY2 <Mwfv � "� 6ratl[6W � NwqutPt� Mri1Es �u(�Mesb AMM fM�N1� '� I i<d�irtL �IMtt�59uiw a 07 oe-an s- uaw mT.?jR/VER $ ORrvE L.--- L L—� �_—-- -o— NEM'POwT ,SHORES + e '$�'ASRORE le COLONY O� to u B-+sn f f I_ —icy F p la r �l e U: J e� COAST P � su .'+enr 'a P BWLEVAAO --. �0 NOT£ - ASEESSOR'9 SLO 8 ASSESSOR'S MAP MARCH /999 SEA9NOAE COLONY TR ADD NM T-25� R/VEA SEC"' MM 6-29 PAAON NIRCLES CWO Y PAGE // SNOiYN IN O(RLt£S LOUNTY OF ORARG£ L LO c\i 0 E E d C C U Q, N a) � D Q U 0 m a v c o c d— p Co d m � m c m Co U O 0 O E w ayo� o w o m U a o U C T U m w — 3 . a) E 'S m Y o m w V �- m o +' c r .Nco a> N dco is=c t m O c : CO U m X m m m a v L Q. N M C i = rn� m z m U i N ma N m e m U m N Q NCO O CO 0 a) CL m U U) c m s U m aY fB 0 CL N z c N X s O c O M m m E O U ;.F 14 C� O N m m a V N ro C 0O L L E E w n y N p N 0 O C O O N N 9 N (Vp OI 3 0 m. o m w 0 r c c0i N w D E o c o m d� omo G" N N C] N Ti N ,roil d T 0 T R1 O 0 O 3 c o C ro� l0 U= �0 D :C O v'S N L w I U N N O N� Y d t6 C1 U Do NcE mmo'¢D m m m c om as N n c D mdya� EEm3oom� 000 Lis c'- - "' ow ac 0 % .5' m -n'-' WN�OOC�V a ¢ N �_ Lro ro (6 ?m y._NL ro 3 m v Nci_ ro¢¢ .E w � o'� mm000�oo--- --- --- mW E tiEo o��-ao+c�a�m E m c o m m m m m w m¢ 4 4 Q Q m o M= o o O o 0 0 Bron E o. E E E E E E E o m m= m c m m m m m m m O m m O -- w c¢¢u.¢¢¢¢�s ¢¢rt N �?n> zap t- aOm LL � C a n ro +� d m ar ro O O _ U E A o _N N 3 E G G _� N N � N U 0 ro lz 0 .c. O _ r{nI m c c n p c m <6 5 0 I d N@ O t0 N E' y E y C C I N d C o m R EW. Q 'g n m E w x E w mro E wSD mLLuErn 0 ii 0 c c my 00�E02'o'w 'c n E E a. a =w wwmzwmmz 0 G > m N m m a V N ro C 0O L L E E w n y N p N 0 O C O O N N 9 N (Vp OI 3 0 m. o m w 0 r c c0i N w D E o c o m d� omo G" N N C] N Ti N ,roil d T 0 T R1 O 0 O 3 c o C ro� l0 U= �0 D :C O v'S N L w I U N N O N� Y d t6 C1 U Do NcE mmo'¢D m m m c om as N n c D mdya� EEm3oom� 000 Lis c'- - "' ow ac 0 % .5' m -n'-' WN�OOC�V a ¢ N �_ Lro ro (6 ?m y._NL ro 3 m v Nci_ ro¢¢ .E w � o'� mm000�oo--- --- --- mW E tiEo o��-ao+c�a�m E m c o m m m m m w m¢ 4 4 Q Q m o M= o o O o 0 0 Bron E o. E E E E E E E o m m= m c m m m m m m m O m m O -- w c¢¢u.¢¢¢¢�s ¢¢rt N �?n> zap t- aOm LL � C e O i C 67 B N O Q O O. 0 \ \C: \\ D :\f_ \ \ \ - § ± § @@ // /\ \\ k a LA Y� 1 v - R C Q7 C cc Q- 6 O U N N cu O) Lam' U N N a N M (A N C N Y C ld ;A N a, L X L Cc$ Q E O C O 0) co VO N 'S +� Y C O (6 _ Q p N N cuCL L N Q O co 'O O p U N X N 0 U 7 Q C Q7 C cc Q- 6 O U N N cu O) Lam' U N N a N M (A N C N Y C ld ;A N a, L X L Cc$ Q E O C O 0) co VO N 'S +� Y C O (6 _ Q p I Y CCD a Q Q � � "O C C O U) z O C Q 3= a c o m c v a a� c ro CL m c ro aD E c o +J U C U Q C NU) go CO 0 � 2 » 0 0 % 0 _ cu ) n I J \ / � � �� \\ \ \ � ^ { ?Z \\ \\\ % ƒ � f = � �� k j{ \\ \ \ / ?Z \\ \\\ % ƒ � f = \ � . 2 \ $�6f ft\/ k j{ \\ \ \ \\ \\\ k j{ U) 0 0 UD 0 C2 - Q) a) m c 0 ca .Q 0. RS ca R cV 0 O C cz N ro c cn .N U) 0 0 CL0 Q wr 14rr mm a.. w maw c 0 ca .Q 0. RS ca R cV 0 O C cz N ro c cn .N U) 0 0 CL0 Q co 0 E E 0 U cri C .0 v . c � " N U) U) C:0_ m a 0) 'Jill iiP� pop w A cu C: 0 E E 0 IR E E (D 0 Cf) A cu C: 0 E E 0 IR E E E. DESCRIPTION OF HOW THE PROJECT WILL BE MANAGED The project will be managed by Buckingham Property Management, who currently has 5,000+ units under management. The management company would handle day-to-day operations, including compliance, leasing and marketing, maintenance, rent collection and lease enforencement, as well as other customary management duties. Since 1974, its founder Paul Chubick managed a broad range of properties throughout California while developing a special knowledge of residential properties in cities both large and small of the central San Joaquin Valley. Buckingham currently manages over 5,000 units in a wide range of conventional and compliance apartment communities. Buckingham Property Management has extensive experience in working with clients to develop new sites and successfully complete the rent up process quickly. With over 30 years of experience with specialized housing programs such as Sec 42 Tax Credit, RD 514-515, HUD, HCD, ANP, Bond and CaIHFA; Buckingham has the proven track record to handle the complexities of regulations and requirements that are an ever increasing burden in residential properties. Buckingham Property Management has extensive experience with the initial lease up, rehabilitation, and ongoing operation of Conventional -Compliance apartment projects throughout California. Expertise in quickly achieving and then maintaining high occupancy at competitive rents combined with strong cost control and economy of operations has resulted in outstanding satisfaction by our clients. CDP has collaborated with Mercy House to provide supportive services designed to help residents be successful in their housing and promote continued self-sufficiency. These services are offered at no cost to residents. A Progress Coach or Services Coordinator will be available to provide on-site services that are tailored to the needs of each household. Individual supportive service meetings will be held monthly or more frequently, if requested. Group meetings and special events are also offered and are designed to foster a sense of community and positive resident relations. Topics that are addressed may include: Money Management Life Skills Problem Solving Community Resources Referrals Mercy House will facilitate the delivery of services for veteran residents and residents with special needs. Services for veteran clients are enhanced through strategic partnerships with veteran service agencies. Mercy House works closely with the VA Long Beach Health Care System to provide its clients with health related services including hospital services, mental health screenings, substance abuse counseling and TB testing. In addition, Mercy House will work with the Orange County Veterans Service agency to assist with assessing and processing VA eligible benefits. The tenants in the VASH voucher program will also have access to the VA Case Management services. F. EVIDENCE OF SITE CONTROL [blLl M I I r -on", or S,!e co C nusl „i i rrr n �-perty . or)J,red 64 65 11C L) P CUNIMLINMYDR 7ArJtiil:k'rPARTNIFICS June 29, 2015 Steven Brombal Broker Hendricks-Berkadia 5000 West Birch Street suite 4000 Newport Beach, CA 92660 Re: Letter of Intent for 12 unit apartment building located at 6001 Newport Shores Drive, Newport Beach, APN 045-114.15 Dear Mr, Brombal: The purpose of this letter is to set forth the terms and conditions under which Community Development Partners ("Buyer") will enter into an agreement with Paul Stepw Foley Trust ("Seller') for the purchase of the above referenced property, includirgthe land and all improvements, development rights, contracts, and fees paid pertaining thereto (collectively "Property"). 1. Purchase Price. The purchase price will be TFrree Million Four Hundred Ninety Five Thousand Dollars ($3,495,000). 2. Payment of Purchase Price, The purchase price for the Property will be paid as follows: (a) Buyer will deposit into escrow One Hundred Thousand Dollars ($100,000) ("Earnest Deposit") within one (1) day following the opening of escrow. Earnest Deposit shalt become non-refundable based on milestones below. All deposits are applicable to the Purchase Price, the balance of which w,I be paid in full at Close of Escrow. (b) Fifty Thousand Dollars ($50,000) of the Earnest Deposit to be non-refundable upon the approval of the Due Diligence Period, (c) Fifty Thousand Dollars ($50,000) of the Earnest Deposit to be non-refundable upon final approval received from Buyer's lender. 3. Title. Title to the Property will be conveyed to Buyer by grant deed on close of escrow. Title shall e conveyed subject to no monetary liens except for the payment of non -delinquent real property taxes, or ocher exceptions approved by Buyer. 4, Escrow. The "Opening of Escrow" shall be defined as the date on which escrow holder has received the fully executed Purchase and Sale Agreement from Buyer and Seller nerein. Escrow 34161fa Oporto, Ste 301, Newport Beach, CA 92663 T:949.467,1344 rYc 366,337.3243 www.communitydevpartners.com Tall /0 00 000"ta�thh',i 1 ek"MIL MW2M 0 holder is instructed to notify Buyer and Seiler 'n writing of the exact date of opening of Escrow. The escrow holde, and Title Company will be Lawyers Title—Joy Eaton of Newport Beach, CA. S. Contingencies. Buyer's intention to close escrow will be subject to Buyer conducting and approving of Buyers due diligence. Buyer will have 21 days from the opening of Escrow ("Physical Inspection Contingency") to conduct physical irspections and review Seller documents pertaining to the physical structure. Buyer will have 30 days from the Opening of Escrow ("Due Diligence Period") to conduct a full review and evaluation of the balance of this transaction, including but not limited to title, City of Newport Beach financing, environmental review, permits and approvals, utilities, and seller provided documents. Seller will accommodate Buyer's reasonable requests and cooperation with Buyer's due diligence including allowing access to Buyer and Buyer's 3'a party representatives as reasonably necessary w complete the due diligence. Due Diligence Period will be automatically extenced if the City of Newport Beach RFP funding commitment has not been received up to a maximum of 30 additional days. 6. Title insurance. Seller will provide an ALTA Owner's Policy of Tate Insurance (`Title Policy") in the amount of the purchase price. The title Insurance policy will be subject only to those matters of title approved by Buyer at Buyers reasonable discretion. 7. Closing. Escrow shall close on or before the date that is 30 days from the approval of the Due Diligence Period ("Close of Escrow"). Closing shall be contingent upon Buyer's approval of Due Diligence Period, including the City of Newport Beach RFP funding commitment. Buyer may extend the Close of Escrow by 30 days by releasing any remaining earnest money deposit to Seller. 8. Dosing Costs. Credits and Proration. Seller will pay the cost of the Title Policy. Seller will pay the cost of documentary transfer taxes and one-half of the escrow fees. All other costs will be allocated between Buyer and Seller in accordanca with customary practice of the County in which the Property is located. Real property taxes and any other matters to be prorated will be prorated as of the Close of Escrow. 9. Right of Entry. During escrow, Buyer and Buyer's V party consultants will have the right to erter the Property for reason of inspections pertaining to Buyers due diligence. Buyer must give Seiler reasonable notice of entry not less than 24 hours 10. Brokers Commission. Seller will pay brokerage commission pursuant to an outside agreement with broker representing Seller. Buyer is represented by Berkadia. 11. Nominee. Buyer shall have the right to assign the Purchase and Sale Agreement ("PSA") to a limited partnership where Buyer will be a General Partner. 3416 via Oporto, Ste 301, Newport Beach, CA 92663 T: 949.467.1344 F,t: 866.397,3243 www.cdmmumitydevpariners.com CDP_ (.Q1f.UUNM f)I\'IiLO(!14(1TPkiCI\IJCS 12. Preparation of Purchase Agreement. Within seven business (7) days of the signing of this letter by Sailer and the receipt thereof by Buyer, Buyer and Seller wig execute a mutually acceptable PSA that shall serve as lawfully binding escrow instructions to escrow holder, 13. Exclusive Right to Negotiate. In consideration of the effort and expense to be expended by the Buyer from the point at which the parties execute this "Letter of Intent', Seiler agrees NOT to consider or solicit offers to purchase the Property from any other source during the time that the parties are negotiating in good faith the PSA. if our proposal is acceptable, please execute the enclosed copy of this letter in the space provided and return to us on or before 5:00 p.m. on June 29"', 2015. Sincerely, Eric Paine CEO �p7p�PROVED AND ACCEPTED BY SELLER THIS / DAY OF-SJ✓e 2015 By (Seller): /� ,�l�" i Nam2, /rye 2 3416 Via Oporto, Ste 301, Newport Beach, CA 92663 T: 949.467.1344 FX: 866.337.3243 www.communitydevpartners.corn G. COMMUNITY OUTREACH Pi ornde a otar or conducting community outreach to the neighbors o,f the proposed prolect and community groups. The outreach plan should describe how the proposer intends to bwld support for the prosect and address community con_erns. File outreach plop should aha discuss ony antrctpored community cone=,ms and how they will be hordled. Community Development Partners (CDP) understands the importance of strong communication with the residents of West Newport on the 6001 Newport Shores affordable housing project. This project is unique to the City of Newport Beach and CDP is excited to share with the residents, business and stakeholders the many reasons why this project will support a goal and need in the City with a reputable and responsible project. CDP retained Hart Community Initiatives to manage the community relations effort, message development and grassroots coalition organization for the Newport Shores project. The principal for the company, Michelle Hart, is a Newport Shores local having grown-up in the Shores and returning to live there in her adult years. She has a deep commitment and intensity to preserving the unique elements of what binds the Newport Shores community and to see the evolution of a strong family environment continue to prosper for the community. To date one-on-one meetings, phone calls and emails with residents, HOA board members and the local business within the Newport Shores community have occurred, headed by Michelle Hart. During the time period of September to November the following communication took place: Conversations including follow-up phone and email communication with various members of the board of directors of the homeowners association which lead to a member of the board discussing the project under board comments at the September and November HOA meetings. Additionally conversations with individual 68 69 Shores residents and spoke to the chairman of the Newport Beach Chamber of Commerce a Newport Shores resident. Door to door outreach to the 9 current residents (2 apartments are vacant) at the property with a letter being supplied on the project. There were three residents that followed-up with phone calls on the timeline and qualification requirements on the project which were responded too. Conversations with David Dukes who recently purchased Cappy's. Provided him renderings of the future project. David agreed to allow community coffee and early evening community meetings to occur at Cappy's so Newport Shores residents not familiar with the 6001 property could see it directly. The first community meeting occurred November 12th at 730am. Responded to a resident via phone calls and emails who had contacted the City of Newport Beach directly. As the project progresses and certain milestones are met, additional outreach to the Newport Shores community will occur. Such outreach efforts may include, but not be limited to, the following: A series of community meetings to be held in November for Newport Shores, West Newport and Newport Crest communities to further introduce the details of the project to the residents, including having the residents meet with CDP to ask questions. Key goals of these meetings will include: Inform residents on the process, timing and milestones for the project. - Highlight the need for affordable housing and housing for Veterans. Highlight the property improvements to which will improve the aesthetic of the building and enhance the community as a whole. Highlight coordination and support of the VA, the list of services to be offered by VA and Mercy House. Provide images of post -rehab building and examples of previous CDP projects completed. Additional outreach to the businesses directly adjacent to the property will include setting up meetings with the John Wayne Foundation, Eat Chow, The Frog House, Cappy's Cafe, The Army Surplus Store and the Best Western. Project updates will be communicated with the Newport Shores HOA to post on the HOA website as well as to establish additional resident meetings as needed. Posting on the Next Door website, on online community social media site which includes 344 of the 440 residents in Newport Shores. This serves as a vehicle for neighbors to communicate with neighbors on a variety of issues including events, police activity, items for sale and services. Community Development Partners along with Mercy House and Hart Community Initiatives is committed to communicating and involving the residents of Newport Shores and West Newport on the proposed project. The project team welcomes all questions and urges residents and businesses to attend community meetings or reach out to us with questions, comments or concerns. 5. DEVELOPMENT PROFORMA R CDP UAMUNIf!" DIVIAONIFNI P1,R) GRS PROJECT FINANCING SUMMARY City Council Project Selection Nov -15 Property Acquisition / Bridge Loan Closing Dec -15 V H H P Application Dec -15 V H H P Award Feb -16 LI HTC 9% Application Mar -16 LIHTC9% Award Jun -16 Construction Commence/LP Closing Sep -16 Anticipated Construction Completion Jan -17 Stabilization (Lease -up Complete) Mar -17 Perm Loan Closing (Conversion) Jul -17 8609s Aug -17 Tax Credit Equity 2,156,244 1st Mortgage Permanent Debt City of NB Note VHHP � 1,975,000 600,000 Deferred Developer Fee 56,125 TOTAL 5,947,369 III LIHTC Equity Pricing 1.05 Acquisition 3,538,320 Direct Construction Costs 1,109,760 Construction Contingency 110,976 Indirect and Soft Costs 259,211 Developer Fee 386,483 Financing Costs 277,012 Project Reserves 265,607 TOTAL 5,947,369 Tax Credit Equity 2,156,244 1st Mortgage Permanent Debt City of NB Note VHHP � 1,975,000 600,000 Deferred Developer Fee 56,125 TOTAL 5,947,369 III LIHTC Equity Pricing 1.05 LIHTC Credits to Investor 2,053,566 Construction/Bridge Loan 2,838,658 LI HTC App Tie -Breaker 76.46% TOTAL Units 12 n 73 z s v PROJECT DEVELOPMENT COSTS 0 M 0 ACQUISITION N Land Costs $ 2,796,000 $ 699,000 $ 3,495,000 $ 291,250 Acquisition Loan Interest - 43,320 43,320 3,610 m Total 2,796,000 742,320 3,538,320 294,860 DIRECT CONSTRUCTION Direct construction/Hard Costs 960,000 - 960,000 80,000 Contractor Overhead 19,200 - 19,200 1,600 General Conditions 57,600 - 57,600 4,800 Contractor Profit/Fee 57,600 - 57,600 4,800 P&P Bond 8,160 - 8,160 680 INDIRECT CONSTRUCTION - - 48,000 217,607 48,000 217,607 Engineering 5,000 - 5,000 417 Architectural Design 50,000 - 50,000 4,167 Permits 10,000 - 10,000 833 FF& E (Furniture) 6,000 - 6,000 500 Environmental Remediation 30,000 - 30,000 2,500 Total 101,000 101,000 8,417 SOFT COSTS - - 48,000 217,607 48,000 217,607 4,000 18,134 Developers Fee Acquisition 139,800 - 139,800 11,650 Developers Fee Construction 246,683 - 246,683 20,557 Property Liability Insurance 4,199 1,400 5,599 467 Real Estate Taxes/Assessments 1,983 5,000 6,983 582 Audit/Accounting 25,000 7,500 32,500 2,708 Misc. Soft Costs 10,000 5,729 15,729 1,311 Marketing - 2,400 2,400 200 Relocation 95,000 - 95,000 7,917 Total 522,665 22,029 544,694 45,391 RESERVES/RENT-UP COSTS Operating Reserve Requirements _Capitalized Services Reserve - - 48,000 217,607 48,000 217,607 4,000 18,134 Total - 265,607 265,607 22,134 FINANCING COSTS Construction Loan Interest Reserve 20,000 20,000 40,000 3,333 Construction Loan Origination Fees 20,000 - 20,000 1,667 Construction Lender UW Costs 6,637 - 6,637 553 Const Lender Monthly Inspct 2,000 - 2,000 167 Perm Loan Origination Fee - 10,150 10,150 846 Lender Attorney Const/Perm 30,000 10,000 40,000 3,333 Title/Escrow/Closing (Constr/Perm) 10,000 5,000 15,000 1,250 Syndication Fee - 10,000 10,000 833 Legal Counsel Fees (Borrower&MGP) 65,000 15,000 80,000 6,667 Land Survey 4,500 1,500 6,000 500 Market Study 5,500 - 5,500 458 Appraisal (App and Lender) 10,000 - 10,000 833.33 Environmental Reports (Phi, Phil/LBP/ACM) 4,000 - 4,000 333 Cap Needs Assmnt(CDP&Lender)/Energy Audit 6,500 - 6,500 542 Relocation Study 2,500 - 2,500 208 TC/VHHPApplication Fee - 6,000 6,000 500 TCAC Allocation/Reservation Fee - 8,215 8,215 685 Compliance Monitoring Fee - 4,510 4,510 376 FINANCING SOURCES & USES Uses Property Acquisition $3,495,000 Total Uses $3,495,000 Uses Acquisition Costs $3,538,320 Direct Construction Costs $1109,760 Construction Contingency $110,976 1 ndirect and Soft Costs $259,211 Developer Fee $386,483 Financing Costs $277,012 Project Reserves $265,607 Total Uses $5,947,369 Uses Acquisition Costs $3,538,320 Direct Construction Costs $1,109,760 Construction Contingency $110,976 Indirect and Soft Costs $259,211 Developer Fee $386,483 Financing Costs $277,012 Project Reserves $265,607 Total Uses $5,947,369 74 75 Sources Century Acquisition Loan $1,520,000 City of Newport Beach Funds $1,975,000 Total Sources $3,495,000 Sources Tax Credit Equity $539,061 Construction Loan $2,838,658 City of NB Note $1,975,000 Deferred Costs $594,651 Total Sources $5,947,369 Sources Tax Credit Equity $2,156,244 1st Mortgage Permanent Debt $1,160,000 City ofNB Note $1,975,000 VH H P $600,000 Deferred Developer Fee $56,125 Total Sources $5,947,369 UNIT MIX AN D I N COME ANALYS IS Unit Monthly Annual Unit Unit AMI 'Gross Utility Net Monthly Annual Type 13,560 Syft Count Level Rent Allowance Rent Rent Rent 1 Bed -1 Bath - VASH 400 6 30% 1475 42 1433 8,598 103,176 1 Bed -1 Bath 400 2 40% 703 42 661 1,322 15,864 1 Bed - 1 Bath 400 3 50% 878 42 836 2,508 30,096 1 Bed - 1 Bath - Non-VASH 400 1 60% 1,054 42 1,012 1,012 12,144 Totals 11,559 1,083 12 13,440 161,280 PERMANENT LOAN SIZING Monthly Annual Per Unit RENTAL INCOME 13,440 161,280 13,440 Total Other Income 1,440 120 Total Rental & Other Income 162,720 13,560 Vacancies 5.00% (8,136) (678) TOTAL INCOME 154,584 12,882 EXPENSES Operating Expenses 7,729 644 Administrative 7,076 590 Payroll 9,564 797 Maintenance 11,015 918 Utilities 8,604 717 Insurance C& taxes if any) 8,811 734 Service Amenities 11,700 975 Replacement Reserves 3,600 300 Service Amenities Reserve C11,700) (975) TOTAL EXPENSES 56,400 4,700 CASH FOR DEBT SERVICE 98,184 8,182 PERM LOAN DEBT 84,105 7,009 VHHPMIN PAYMENT 2,520 210 NET CASH FLOW 11,559 1,083 PERMANENT LOAN SIZING AmortizanonYears 30 DCR 1.17 Interest Rate 5.70% Total Financing $1,160,000 'NOTE. OCHA Staff confirmed Newport Beach is considered a'high rent area' and therefore rents are above the published Orange County FMRs of $1,283. 30 -YEAR CASH FLOW 1 Bed -1 Bath - VASH 6 1,433 2.00% 103,176 105,240 107,344 109,491 111,681 113,915 1 Bed -1 Bath 2 661 2.00% 15,864 16,181 16,505 16,835 17,172 17,515 1 Bed -1 Bath 3 836 3.00% 30,096 30,698 31,312 31,938 32,577 33,228 1 Bed - 1 Bath - Non-VASH Vet 1 1,012 2.00% 12,144 12,387 12,635 12,887 13,145 13,408 TOTAL RENTAL INCOME 12 5.57% 3.00% 161,280 164,506 167,796 171,152 174,575 178,066 Other Income $ 10.00 2.00% 1,440 1,469 1,498 1,528 1,559 1,590 TOTAL POTENTIAL INCOME 162,720 165,974 169,294 172,680 176,133 179,656 Less Vacancy Allowance 5.00% (8,136) (8,299) (8,465) (8,634) (8,807) (8,983) GROSS INCOME 154,584 157,676 160,829 164,046 167,327 170,673 Management Fees (Per Mo) $ 644.10 5.00% 2.00% 7,729 7,884 8,041 8,202 8,366 8,534 Administration $ 589.68 4.58% 3.00% 7,076 7,288 7,507 7,732 7,964 8,203 Payroll $ 797.00 6.19% 3.00% 9,564 9,851 10,146 10,451 10,764 11,087 Maintenance $ 91794 7.13% 3.00% 11,015 11,346 11,686 12,037 12,398 12,770 Utilities $ 717.00 5.57% 3.00% 8,604 8,862 9,128 9,402 9,684 9,974 Insurance/Taxes $ 734.28 5.70% 3.00% 8,811 9,076 9,348 9,628 9,917 10,215 Service Amenities $ 975.00 7.57% 3.00% 11,700 12,051 12,413 12,785 13,168 13,564 Services Reserve / CF Reserve $ (975.00) -7.57% 3.00% (11,700) (12,051) (12,413) (12,785) (13,168) (13,564) TOTAL OPER. EXPENSES $4,400 52,800 54,307 55,857 57,452 59,094 60,783 N ET OPERATING INCOME 101,784 103,369 104,972 106,593 108,233 109,890 REPLACEMENT RESERVES $300 3.00% 3,600 3,708 3,819 3,934 4,052 4,173 CASH FLOW FOR DSC 98,184 99,661 101,153 102,660 104,181 105,717 DEBTSERVICE Amount Rate DCR Incr/yr Permanent Loan Hard Debt $1,160,000 5.70% 1.17 84,105 84,105 84,105 84,105 84,105 84,105 VH HP Min Payment $600,000 042% N/A 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 3,377 11,559 13,035 14,527 16,034 17,555 19,091 MANAGEMENT FEES Amount Incr/yr LP Asst Mgmt Fee $3,000 3,00% 3,000 3,090 3,183 3,278 3,377 3,478 MGPMgmt Fee $3,000 3.00% 3,000 3,090 3,183 3,278 3,377 3,478 CASH FLOW AFTER FEES 5,559 6,855. 8,162 9,478 10,802 12,136 DEFERRED FEE &AGP FEE Amount Incr/yr Deferred Fee Payment $56,125 5,559 6,855 8,162 9,478 10,802 12,136 AGP (De,) Incentive Fee $3,000 3.00% - - - - - 3,478 CASH FLOW AFTER DDF - - - - - (3,478) CITY OF N8 NOTE Amount Rate Year -1 Year -2 Year -3 Year -4 Year -5 Year -6 Surplus Cash Flow Payments $1,975,000 0.0% - - - - - - NETCASHFLOW - - - - - (3,478) 76 77 30 -YEAR CASH FLOW 1 Bed -1 Bath -VASH 1Red -1Bath 1 Bed -1 Bath 1 Bed - 1 Bath - Nan-VASH Vot 116,193 17,865 33,893 13,676 118,517 18,223 34,571 13,950 120,887 18,587 35,262 14,229 123,305 18,959 35,968 14,513 125,771 19,338 36,687 14,803 128,286 19,725 37,421 15,100 130,852 20,119 38,169 15,402 133,469 20,522 38,932 15,710 136,139 20,932 39,711 16,024 TOTAL RENTAL INCOME 181,627 185,260 188,965 192,745 196,599 200,531 204,542 208,633 212,806 Other Income 1,622 1,654 1,687 1,721 1,755 1,790 1,826 1,863 1,900 TOTAL POTENTIAL INCOME 183,249 186,914 190,652 194,465 198,355 202,322 206,368 210,496 214,706 Less Vacancy Allowance (9,162) (9,346) (9,533) (9,723) (9,918) (10,116) (10318) (10,525) (10,735) GROSS INCOME 174,087 177,568 181,120 184,742 188,437 192,206 196,050 199,971 203,970 Management Fees (Per Mo) Administration Payroll Maintenance Utilities Insurance/Taxes Service Amenities Services Reserve / CF Reserve 8,704 8,449 11,420 13,153 10,274 10,521 13,970 (13,970) 8,878 8,703 11,763 13,547 10,582 10,837 14,390 (14,390) 9,056 8,964 12,115 13,954 10,899 11,162 14,821 (14,821) 9,237 9,233 12,479 14,372 11,226 11,497 15,266 (15,266) 9,422 9,510 12,853 14,804 11,563 11,842 15,724 (15,724) 9,610 9,795 13,239 15,248 11,910 12,197 16,196 (16,196) 9,802 10,089 13,636 15,705 12,267 12,563 16,681 (16,681) 9,999 10,392 14,045 16,176 12,635 12,940 17,182 (17,182) 10,199 10,703 14,466 16,662 13,014 13,328 17,697 (17,697) TOTAL OPER. EXPENSES 62,521 64,310 66,150 68,044 69,993 71,999 74,063 76,187 78,372 22,206 23,784 25,375 26,980 28,598 30,229 31,872 33,527 17,547 18,917 20,293 21,674 23,061 24,452 NET OPERATING INCOME 111,565 113,259 114,969 116,698 118,444 120,207 121,987 123,784 125,598 REPLACEMENT RESERVES 4,299 4,428 4,560 4,697 4,838 4,983 5,133 5,287 5,445 CASH FLOW FOR DSC 107,267 1089831 110,409 112,001 113,606 115,224 116,854 118,498 120,153 DEBT SERVICE Year -7 Year -8 Year -9 Year -10 Year -11 Permanent Loan Hard Debt 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 VHHP Min Payment 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 20,641 22,206 23,784 25,375 26,980 28,598 30,229 31,872 33,527 MANAGEMENT FEES Year -7 Year -8 Year -9 Year -10 Year -11 Year -12 Year -13 LP Asst Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 MGP MgmtFee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER FEES 13,477 14,826 16,183 17,547 18,917 20,293 21,674 23,061 24,452 DEFERRED FEE & AGP FEE Deferred Fee Payment 3,133 - - - - - - - AGP (Dev) Incentive Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER DDF 6,761 11,137 12,383 13,632 14,885 16,140 17,397 18,655 19,914 CITY OF NB NOTE Year -7 Year -8 Year -9 Year -10 Year -11 Year -12 Year -13 Year -14 Year -15 Surplus Cash Flow Payments - - - - - - - - - NET CASH FLOW 6,761 11,137 12,383 13,632 14,885 16,140 17,397 18,655 19,914 30 -YEAR CASH FLOW 1 Bed -1 Bath - VASH 6 1,433 2.00% 138,861 141,639 144,471 147,361 150,308 153,314 1 Bed - 1 Bath 2 661 2.00% 21,351 21,778 22,213 22,658 23,111 23,573 1 Bed -1 Bath 3 836 2.00% 40,505 41,315 42,142 42,984 43,844 44,721 1 Bed -1 Bath - Non-VASH Vet 1 1,012 2.00% 16,344 16,671 17,005 17,345 17,692 18,045 TOTAL RENTAL INCOME 12 217,062 221,403 225,831 230,348 234,955 239,654 Other Income $ 10.00 2.00% 1,938 1,977 2,016 2,057 2,098 2,140 TOTAL POTENTIAL INCOME 219,000 223,380 227,847 232,404 237,052 241,793 Less Vacancy Allowance 5.00% (10,950) (11,169) (11,392) (11,620) (11,853) 012,090) GROSSINCOME 208,050 212,211 216,455 220,784 225,200 229,704 Management Fees CPer Mo) Administration Payroll Maintenance Utilities Insurance/Taxes Service Amenities Services Reserve / CF Reserve $ 644.10 $ 589.68 $ 797.00 $ 917.94 $ 717.00 $ 734.28 $ 975.00 $ (975.00) 5.00% 4,58% 619% 7.13% 5.57% 5.70% 7.57% -7.57% 2.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 10,402 11,024 14,900 17,161 13,405 13,728 18,228 - 10,611 11,355 15,347 17,676 13,807 14,140 18,775 - 10,823 11,696 15,808 18,207 14,221 14,564 19,338 - 11,039 12,047 16,282 18,753 14,648 15,001 19,918 - 11,260 12,408 16,771 19,315 15,087 15,451 20,516 - 11,485 12,780 17,274 19,895 15,540 15,914 21,132 - TOTAL OPER. EXPENSES $4,400 2,520 2,520 98,850 101,711 104,656 107,688 110,808 114,020 21,743 22,862 23,974 25,077 NET OPERATING INCOME 109,200 110,500 111,799 113,096 114,392 115,684 REPLACEMENT RESERVES $300 3.00% 5,609 5,777 5,950 6,129 6,313 6,502 CASH FLOW FOR DSC 103,591 104,723 105,848 106,968 108,079 109,182 DEBT SERVICE Amount Rate DCR Permanent Loan Hard Debt $1,160,000 5.70% 1.17 84,105 84,105 84,105 84,105 84,105 84,105 VHHP Min Payment $600,000 0.42% N/A 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 19,486 20,617 21,743 22,862 23,974 25,077 MANAGEMENTFEES Amount Incr/yr LP Asst Mgmt Fee $3,000 3.00% 4,674 4,814 4,959 5,107 5,261 5,418 MGPMgmt Fee $3,000 3.00% 4,674 4,814 4,959 5,107 5,261 5;418 CASH FLOW AFTER FEES 10,138 10,989 11,826 12,647 13,453 14,240 DEFERRED FEE &AGP FEE Amount Incr/yr Deferred Fee Payment $56,125 - - - - - - AGP (Dev) Incentive Fee $3,000 3,00% 4,674 4,814 4,959 5,107 5,261 5,418 CASH FLOW AFTER DDF 5,464 6,175 6,867 7,540 8,192 8,822 CITY OF NB NOTE Amount Rate Year -16 Year -17 Year -18 Year -19 Year -20 Year -21 Surplus Cash Flow Payments $1,975,000 0.0% ',366 1,544 1,717 1,885 2,048 2,205 NET CASH FLOW 4,098 4,631 5,151 5,655 6,144 6,616 78 ]o 30 -YEAR CASH FLOW 1 Bed -1 Bath - VASH 156,380 159,508 162,698 165,952 169,271 172,657 176,110 179,632 183,225 1 Bed -1 Bath 24,045 24,525 25,016 25,516 26,027 26,547 27,078 27,620 28,172 1 Bed -1 Bath 45,615 46,528 47,458 48,408 49,376 50,363 51,370 52,398 53,446 1 Bed - 1 Bath - Nan-VASH Vet 18,406 18,774 19,150 19,533 19,924 20,322 20,728 21,143 21,566 TOTAL RENTAL INCOME 244,447 249,336 254,322 259,409 264,597 269,889 275,287 280,792 286,408 Other Income 2,183 2,226 2,271 2,316 2,362 2,410 2,458 2,507 2,557 TOTAL POTENTIAL INCOME 246,629 251,562 256,593 261,725 266,959 272,299 277,745 283,299 288,965 Less Vacancy Allowance (12,331) (12,578) (12,830) (13,086) (13,348) (13,615) (13,887) (14,165) (14,448) GROSS INCOME 234,298 238,984 243,763 248,639 253,611 258,684 263,857 269,134 274,517 •- 84,105 84,105 84;105 84,105 B4,105 84,105 84,105 84,105 84,105 Management Fees (Per Mo) 11,715 11,949 12,188 12,432 12,681 12,934 13,193 13,457 13,726 Administration 13,164 13,559 13,965 14,384 14,816 15,260 15,718 16,190 16,675 Payroll 17,792 18,326 18,875 19,442 20,025 20,626 21,244 21,882 22,538 Maintenance 20,492 21,106 21,740 22,392 23,064 23,756 24,468 25,202 25,958 Utilities 16,006 16,486 16,981 17,490 18,015 18,555 19,112 19,685 20,276 Insurance/Taxes 16,392 16,883 17,390 17,912 18,449 19,002 19,573 20,160 20,765 Service Amenities 21,765 22,418 23,091 23,784 24,497 25,232 25,989 26,769 27,572 Services Reserve / CF Reserve - - - - - - - - - TOTAL OPER. EXPENSES 117,325 120,728 124,230 117,835 131,546 135,366 139,297 143,344 147,510 NET OPERATING INCOME 116,972 118,256 119,533 120,803 122,065 123,318 124,560 125,790 127,007 REPLACEMENT RESERVES 6,697 6,898 7,105 7,318 7,538 7,764 7,997 8,237 8,484 CASH FLOW FOR DSC 110,275 111,358 112,428 113,485 114,528 115,554 116,563 117,554 118,524 DEBT SERVICE Permanent Loan Hard Debt 84,105 84,105 84;105 84,105 B4,105 84,105 84,105 84,105 84,105 VHHP Min Payment 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 26,170 27,252 28,323 29,380 30,422 31,449 32,458 33,448 34,418 MANAGEMENT FEES LP Asst Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 MGP Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 CASH FLOW AFTER FEES 15,008 15,756 16,481 17,183 17,860 18,509 19,130 19,721 20,279 DEFERRED FEE &AGP FEE Deferred Fee Payment - - - - - - - - - AGP (Dev) Incentive Fee 5,581 5,748 5,921 6,098 6,281 6,470 6;664 6,864 7,070 CASH FLOW AFTER DDF 9,427 10,007 10,560 11,085 11,578 12,040 12,466 12,857 13,209 CITY OF NB NOTE Year -22 Year -23 Year -24 Year -25 Year -26 Year -27 Year -28 Year -29 Year -30 Surplus Cash Flow Payments 2,357 2,502 2,640 2,771 2,895 3,010 3,117 3,214 3,302 NET CASH FLOW 7,070 7,506 7,920 8,314 8,684 9,030 9,350 9,643 9,907 6. PROPOSED IMPLEMENTATION PLAN CIDP C0�1_A1UA'lil DU'N.UPMENI P3RlRFRti 82 83 Z m F a PROPOSED IMPLEMENTATION PLAN $ 1 _N Toling es a stating point City Council opprovol a f use of the funds, provide o prone >-- m or implcmenmt:ion plan. For development projecbs, include rhe follar.rng milestones "L'o Tonal a fund;og from all other funding sources, zoning change approvals , f necessary p-epc ,). , _ s appro,,d of o a construction plans, start' of construction, completion of construction, and lease ue. o N City Council Project Selection November 2015 Property Acquisition / Bridge Loan Closing December 2015 VH H P Application December 2015 VHH P Award February 2016 Ll HTC 9% Application March 2016 Ll HTC 9% Award June 2016 Construction Commence/LP Closing September 2016 Anticipated Construction Completion January 2017 Stabilization (Lease -up Complete) March 2017 Perm Loan Closing (Conversion) July 2017 8609s August 2017 Perm Loan Closing (Conversion) July 2017 8609s August 2017 84 85 7. APPLICANT N FO RMATI O N FORM @,:CDP lI1.b5Nl7NII7 DIT EI �IPPIIVII'4H'IwFR9 ATTACHMENT A: APPLICANT INFORMATION FORM Instructions: Complete the form below and remit as part of your Proposal as `Attachment A." APPLICANT INFORMATION APPLICANT/COMPANY NAME: Community Development Partners ADDRESS FOR NOTICES: 3416 Via Oporto Suite 301 Newport Beach, CA 92663 MAIN CONTACT (NAME AND TITLE): Eric Paine, CEO CONTACT NUMBERS: TELEPHONE: 949-554-3713 FAX: E-MAILADDRESS: epaine@communitydevpartners.com APPLICANT SIGNATURE AUTHORIZATION AND CERTIFICATION Per the California Corporate Code, Business and Professions Code, the Applicant's Bylaws/Operating Agreement and/or the attached Board Resolution (if applicable), I/we hereby verify that I/we am/are Ian) authorized signatory(ies) for the aforementioned Applicant and as such am/are authorized to sign and bind the Applicant in contract with the City of Newport Beach. 1. APPLICANT AUTHORIZED SIGNATORY(IES): Eric Paine CEO 6/30/15 SIGNATURE PRINT NAME TITLE DATE SIGNATURE PRINT NAME TITLE DATE 2. SIGNATURE AUTHORIZATION IS PROVIDED IN ACCORDANCE WITH: ❑ Applicant's Bylaws/ Operating Agreement Section _ ❑ Copy Attached © Board Resolution X❑ Copy Attached ❑ Corporate or Business and Professions Code** **If Consultant is a corporation, two (2) authorized signatories will be required on all documents submitted, unless specified in the organization's Bylaws or corporate resolution. IMPORTANT NOTE: If the signature authorization status of any individual changes during the term of the contract, it is the responsibility of the Applicant to contact the RFP Administrator for the Applicant regarding the change and to complete and submit anew Signature Authorization Form. Incorrect information on file may delay the processing of any of the documents submitted. 86 87 CERTIFICATE OF CORPORATE RESOLUTION OF SPECIAL MEETING OF THE BOARD OF DIRECTORS OF COMMUNITY DEVELOPMENT PARTNERS The undersigned, being the Secretary of Community Development Partners, a California Corporation (herein the "Company"), does hereby certify: 1. That a meeting of the Board of Directors of the Company, duly called, convened and held on June 29, 2015 at which meeting a quorum was present and voted throughout, the following resolutions were duly adopted by the Board of Directors and such resolutions have not been amended, altered or repealed and remain in full force and effect on the date hereof: WHEREAS, the Company is wishing to authorize a signatory in conjunction with the submission of a response to the City of Newport Beach Request For Proposals 15-55; NOW THEREFORE, BE IT RESOLVED, that the Company authorizes the CEO in his sole and absolute discretion to sign any such documents as may be required to bind, authorize, or otherwise commit the Company to the Request For Proposals 15-55 response and application. 2. That he has executed this certificate as of the date stated herein. 44 /Da44a, C6fnmunity Development Partners By: Kyle Paine Its: Secretary Guzzetta, Suzanne From: McDonald, Cristal Sent: Friday, June 17, 2016 10:59 AM To: Guzzetta, Suzanne Subject: FW: Affordable Housing Agreement - Community Development Partners From: Mullinax, Carrera Sent: Wednesday, May 25, 2016 3:52 PM To: Wooding, Lauren Cc: McDonald, Cristal; Gordon, Melissa Subject: RE: Affordable Housing Agreement - Community Development Partners Hi Lauren: I just checked the Word version; it is a typo that there is a number "2" at the bottom of Attachment No. 4 — no cover page is missing. Thanks for asking! Sincerely, Carrera Mullinax, Certified Paralegal City Attorney's Office City of Newport Beach 100 Civic Center Drive P.O. Box: 1768 Newport Beach, California 92660 Phone: (949) 644-3134 Fax: (949) 644-3139 Email: cmullinax@newoortbeachca.aov CONFIDENTIALITY NOTICE: The information in this e-mail message is intended for the confidential use of the addressees only. The information is subject to the attorney-client privilege and/or may be attorney work -product. Recipients should not file copies of this e-mail with publicly accessible records. If you are not an addressee or an authorized agent responsible for delivering this e-mail to a designated addressee, you have received this e-mail in error, and any further review, dissemination distribution, copying or forwarding of this e-mail is strictly prohibited. Moreover, such inadvertent disclosure shall not compromise or waive the attorney-client privilege as to this communication. If you received this e-mail in error, immediately notify the sender. Thank you. From: Wooding, Lauren Sent: Wednesday, May 25, 2016 3:47 PM To: Mullinax, Carrera Cc: McDonald, Cristal; Gordon, Melissa Subject: Affordable Housing Agreement - Community Development Partners Hi Carrera, Cristal is filing this contract and had a question regarding Attachment No. 4 to the Affordable Housing Agreement... The attachment seems to start on page 2, rather than page 1— see attached. I'm wondering if there was a cover page, similar to page 1 of Attachment No. 5 that somehow got misplaced? Can you check the Word version for me? ATTACHMENT NO.4 SCHEDULE OF PERFORMANCE 882/036753-0123 2765748.6 a12/08/15 -2- ACTIVITY TIME FRAME 1. Developer executes and delivers to City or Not less than five (5) calendar days prior to Escrow Agent, City Regulatory Agreement, the Site Closing Date. City Deed of Trust, and Notice of Affordability Restrictions. (Section 2.2.1(b) 2. Developer executes and delivers to City the Not less than five (5) calendar days prior to CityNote. (Section 2.2.1(c)) Site Closing Date. 3. City deposits City Acquisition Assistance Within five (5) business days after into Escrow. (Section 2.2.1) Developer has satisfied all of the City Acquisition Assistance Funding Conditions. 4. Escrow Agent disburses City Acquisition Upon satisfaction of conditional and Assistance. (Section 2.2.1) contingent requirements, and City instruction to disburse on the Site Closing Date. 5. Developer submits applications for First Opportunity following Site Closing allocation of Nine Percent (9%) Tax Credits Date, expected to be March, 2016 Section 2.1.3 6. Developer closes on all of the construction On or before the Outside Funding Closing funding set forth in the Project Budget, Date. including the Construction Loan and Tax Credits. 7. Developer obtains building permits (if Within thirty (30) calendar days after necessary) and commences rehabilitation of Funding Closing Date. the Project. (Section 3.7) 8. Developer completes rehabilitation of the Within twelve (12) months after Developer Project, records a notice of completion and commences construction. obtains a certificate of occupancy from City or its equivalent, if applicable (Section 3.12 9. Developer submits annual report pursuant Not later than 60 days after the end of each 882/036753-0123 2765748.6 a12/08/15 -2- ACTIVITY TIME FRAME to the requirements of Section 3.7 of the fiscal year. the September 1 following the Regulatory Agreement and Declarations June 30 end of each fiscal year for term of and Covenants to Health and Safety Code the City Regulatory Agreement. Section 33418 to City. It is understood that the foregoing Schedule is subject to all of the terms and conditions of the text of the Agreement including, without limitation, Section 6.3. The summary of items of performance in the Schedule is not intended to supersede or modify any more complete description in the text; in the event of any conflict or inconsistency between this Schedule and text of the Agreement, the text of the Agreement shall govern. 882/036753-0123 2765748.6 ai2/08/15 -3- ATTACHMENT NO.5 CITY NOTE [SEE FOLLOWING DOCUMENT] 882/036753-0123 2765748.6 a12/08/15 PROMISSORY NOTE Loan Amount: $1,975,000.00 D(,CNA)2.1 1 � 2015 Newport Beach, California FOR VALUE RECEIVED, NEWPORT VETERANS HOUSING, LP, a California limited partnership (`Borrower") promises to pay to the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), the principal sum of One Million Nine Hundred Seventy Five Thousand Dollars ($1,975,000.00), or so much of such principal as may be disbursed pursuant hereto and in accordance with that certain Affordable Housing Agreement between the City and Borrower dated for identification purposes only as of -S:X \4 2015 ("Agreement'), plus interest on the outstanding principal balance, in accordance with the terms and conditions set forth herein. This Note evidences the obligation of Borrower to City for the repayment of certain funds ("City Loan") loaned to Borrower by City pursuant to the Agreement, in connection with the acquisition of real property located at 6001 Coast Boulevard, in the City of Newport Beach ("Property"). All capitalized terms unless otherwise defined herein shall have the same meaning as set forth in the Agreement, which is incorporated herein by this reference. Reference is also made to the following additional agreements and documents, of even date herewith, involving City and Borrower and/or pertaining to the Property: (i) Deed of Trust with Assignment of Rents by and between Borrower as Trustor, City as beneficiary, and wwrIr,, k Title Insurance Company as Trustee, and recorded in the Office of the Orange County Recorder ("City Deed of Trust'). The City Deed of Trust secures repayment of this Note and performance under the Agreement and City Regulatory Agreement. (ii) Regulatory Agreement by and between Borrower and City, for the benefit of City, and recorded in the Office of the Orange County Recorder ("City Regulatory Agreement'). 1. Definitions. "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Borrower which, if Borrower is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control" as used in the immediately preceding sentence means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. "Annual Financial Statement" shall mean the financial statements prepared by Borrower for each calendar year beginning in the first year for which payment is due under this Note until 882/036753-0123 2765748.6 a12/16/15 ' 1' the Maturity Date, including a balance sheet, income statement, statement of retained earnings, statement of cash flows, and footnotes thereto, prepared in accordance with generally accepted accounting principles consistently applied, as audited by an independent certified public accountant. "Applicable Percentage" shall mean twenty-five percent (25%). "Assignment" shall mean any voluntary or involuntary conveyance, disposition, assignment, encumbrance (other than a Refinancing as defined below or the creation of the Senior Loan or any other financing permitted by the Agreement), sublease, sale or transfer of the Property, including, without limitation, any transfer by Borrower of all or any portion of its rights under or interest in the Property, any unpermitted change of ownership or control of Borrower, any foreclosure of Borrower's interest in the Property, whether by judicial proceedings, or by virtue of any power contained in a deed of trust, indenture or other instrument creating a lien against the Property, or any assignment of Borrower's estate in the Property through, or in lieu of, foreclosure or other appropriate and bona fide proceedings in the nature thereof; provided, however, that the term "Assignment" as used herein shall not include any permitted transfer as set forth in Section 8 hereof or in Section 1.5 of the Agreement. "Capital Improvements" shall mean all work and improvements with respect to the Property for which costs and expenses may be capitalized in accordance with GAAP. "City Manager" shall mean the individual duly appointed to the position of the City Manager of the City of Newport Beach, or his or her authorized designee. "Debt Service" shall mean scheduled debt service (including impounds; expenses, and other amounts payable) on the Senior Loan. "Developer Fee" shall mean the fee to be paid to the Developer for rehabilitating the Property. A portion of the Developer Fee may be deferred (the "Deferred Developer Fee"). "Fiscal Year" shall mean the fiscal year of Borrower, which is the calendar year. "GAAP" shall mean generally accepted accounting principles as in effect from time to time, consistently applied. "Maturity Date" shall mean the date the Term expires. "Net Operating Income " shall mean, for the applicable period of time, (i) the amount, if any, by which Operating Income for such period exceeds Operating Expenses paid by Borrower during such period; and, provided there is such an excess, less (ii) the Developer Fee, until such fee is paid in full,. "Operating Expenses" shall mean, for the applicable period of time, all costs and expenses reasonably incurred by Borrower in the ordinary course of the management, ownership, and/or operation of the Property by Borrower, including, without limitation, the payment of Debt Service, the funding of reasonable reserves, and the payment of the following fees paid annually: (a) asset management fees paid to the general partners of the Property owner and the Qualified 882/036753-0123 2765748.6 al2/16/15 -2- Tax Credit Investor; (b) a fee to cover the cost of coordinating any social services required by CTCAC; (c) a property management fee. Operating Expenses shall not include any expenses for Capital Improvements, except for Capital Improvements allowed in the Approved Budget, approved by any lender providing a Senior Loan, or approved, with such approval not to be unreasonably withheld or delayed, by the City Manager. Operating Expenses shall be calculated on a cash basis. "Operating Income" shall mean, for the applicable period of time, all proceeds received by Borrower from the operation of the Property and from any and all sources resulting from or attributable to the operation of the Property, including, without limitation, all rentals, parking receipts, laundry income received by Borrower, forfeited security deposits, and all expense reimbursements paid to Borrower by tenants of the Property. Operating Income shall be calculated on a cash basis. Operating Income excludes insurance proceeds and/or condemnation proceeds. "Senior Loan" shall mean the Acquisition Loan, Construction Loan ,Take -Out Loan and any loans made to Developer by its principals in compliance with its organizational documents. "Senior Loan Documents" shall mean any and all agreements and documents related to a Senior Loan. "City Loan Documents" shall mean, collectively, the Agreement, this Note, the City Regulatory Agreement, and the City Deed of Trust. "Term" shall mean the period commencing on the execution hereof, and terminating on the fifty-fifth (551h) anniversary hereof unless Developer is successful in obtaining an allocation of 9% Tax Credits in which case termination shall be on the 551h Anniversary of the recording of a Notice of Completion for the rehabilitation described in the Scope of Work. 2. Interest and Repayment. 2.1 Basic Interest Rate. Except as provided in section 2.5 below, the disbursed and unpaid principal balance of the City Loan shall bear interest at the simple rate of zero percent (0%) per year (the "Basic Interest Rate"). As used herein, the term "disbursed" shall mean and refer to the time when the City has disbursed such funds to Borrower, pursuant to the Agreement. 2.2 Payment Dates and Amounts. (a) Principal and Interest Payments. Interest and principal payments on this Note shall be payable annually on April i of each year during the Term beginning with the 15`h year following execution hereof or, if Developer successfully obtains an allocation of Nine Percent (9%) Tax Credits, the first year following the expiration of the fifteen (15) year tax credit compliance period. Payments shall be in an amount equal to the Applicable Percentage multiplied by the Net Operating Income minus GP or LP partnership management fees for the calendar year immediately preceding such annual payment date. For any year in which no payment is due or there is no Net Operating Income available for payment of principal and interest, then interest shall continue to accrue on the City Loan during such year. On or before each April 1 during the Term on which a payment is due, regardless as to whether any payment 882/036753-0123 2765748.6 al2/16/15 -3- of principal and interest is remitted, Borrower shall provide City with an accounting documenting the calculation of Net Operating Income for the previous calendar year. (c) Interest First. All payments shall be applied first to accrued interest and thereafter to principal. 2.3 Financial Statements. On each April 1 on which a payment is due pursuant to Section 2.2(a), Borrower shall submit to City its Annual Financial Statement for the preceding year. Net Operating Income shall be calculated by Borrower for each year for which payment is due pursuant to Section 2.2(a) (and certified by an authorized officer of Borrower) and reported by Borrower to City annually for each calendar year no later than April 1st of the following calendar year. All calculations and records shall be based upon Borrower's Annual Financial Statement and shall be subject to audit by City. In connection with any audit, Borrower shall provide to City for inspection and copying any records, receipts, account books, ledgers, checks, or other documents or other evidence reasonably requested by City for the purpose of verifying Borrower's calculation of Net Operating Income, and shall promptly pay to City any further amount due but not paid as a result of any miscalculation by Borrower. City shall promptly pay Borrower any overpayments made by Borrower as shown by such audit. 2.4 Maturity Date. The outstanding principal balance together with any outstanding interest due thereon and any other sums payable under this Note shall be due and payable in full on the date the Term terminates (the "Maturity Date"). 2.5 Default Rate. Any amounts (including but not limited to amounts of principal and interest on the City Loan) which Borrower does not pay when otherwise due under the terms of this Note, shall bear interest at the rate of the lesser of ten percent (10%) per annum or the maximum rate allowed per law per annum ("Default Rate"), simple interest, from the date which is ten (10) days after such amount would otherwise be due until the date paid. 3. Prepayment; Application of Payments. At any time after the disbursement of the City Loan proceeds, Borrower may prepay all or a portion of the unpaid principal amount of the City Loan and accrued interest and any other sums outstanding without penalty. All payments, including any prepayments or funds received upon acceleration pursuant to Section 9.2(a) below, shall be applied first toward any outstanding costs of collection or other amounts (excluding City Loan principal or interest thereon) due under this Note or the Agreement, then toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest accrued at the Basic Interest Rate, if any, and finally toward the remaining principal balance under the Note. 4. Security and Source of Payment. Borrower's obligations under this Note, the Agreement and the City Regulatory Agreement shall be secured by the City Deed of Trust. The City Loan shall constitute a nonrecourse obligation of Borrower, and neither Borrower nor any partner, member, or shareholder thereof shall have any personal liability for repayment. 882/036753-0123 2765748.6 a12/16/15 -4- The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on this Note; nothing contained herein is intended to relieve the Borrower and, if Borrower is a partnership, limited liability company, or corporation, any general partner, member, or shareholder of Borrower of liability for damages caused to City as a result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the real property described in the City Loan documents that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the retention of any rental income or other income arising with respect to the Property collected by Borrower after an Event of Default to the full extent of the rental income or other income retained and collected by Borrower after the giving of any such notice, and not used to pay Operating Expenses of the Property; (iv) the misapplication of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property; and (v) breach of any environmental covenant or representation made by the Borrower relating to the Property. 5. Obligation of Borrower Unconditional. The obligation of Borrower to repay the City Loan and all accrued interest thereon shall be absolute and unconditional, and until such time as all of the outstanding principal of and interest on this Note shall have been fully paid, Borrower agrees that it: (a) will use the funds solely for the purposes set forth herein and in the Agreement; and (b) will not terminate or suspend any payment or obligations under this Note, the Agreement, or any other document executed hereunder or in connection herewith for any cause, including without limitation, any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, or any duty, liability or obligation arising out of or in connection with this Note, the Agreement or any document executed hereunder or in connection herewith. 6. Purpose of City Loan. The City Loan proceeds shall be used by Borrower for acquisition of the Property in connection with the Project outlined in the Agreement. In no event shall Borrower use or otherwise invest the proceeds of the City Loan except as expressly provided in this Note and in the Agreement. 7. Covenants of Borrower. As additional consideration for the making of the City Loan by City, Borrower covenants as follows: 7.1 Compliance with Agreement, City Regulatory Agreement, and City Deed of Trust. Borrower shall comply with all of its obligations under the Agreement, City Regulatory Agreement and the City Deed of Trust. Any amounts payable by Borrower under the Agreement, City Regulatory Agreement, or the City Deed of Trust (other than amounts also payable hereunder) shall be deemed added to the principal amount of the City Loan payable hereunder. 7.2 Other Loans. Borrower shall comply with all monetary and non -monetary covenants associated with any loan secured by an interest in the Property. Borrower shall provide 882/036753-0123 2765748.6 a12/16/15 —5— to City a copy of any notice of default within five (5) calendar days after receiving any notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly cure any such default and cooperate in permitting City, to the extent City in its sole discretion elects to do so, to cure or assist in curing the default. Any cost or expenditure incurred by City in providing or assisting in such a cure shall be deemed added to the outstanding principal amount of the City Loan. 7.3 Payment of Deferred Developer Fee and Partnership Management Fee. Borrower shall not pay the Deferred Developer Fee or make any payments of the Partnership Management Fee unless and until Operating Income exceeds Operating Expenses. 8. Assignment of this Note. This Note shall be assignable by Borrower in compliance with Section 1.5 of the Agreement. Notwithstanding anything which may be or appear to be herein to the contrary, no purported assignment of this Note and/or the City Loan shall be effective if such assignment would violate the terms, conditions and restrictions of any applicable ordinances, laws, or regulations. City's consent to such assignment shall be expressly conditioned upon (a) the assignee's execution of such documents as required by City including, without limitation, any and all documents deemed necessary by City to provide for said assignee's assumption of all of the obligations of Borrower hereunder, under the City Regulatory Agreement, under the City Deed of Trust, and under the City Loan Documents, and (b) City's approval of the financial and credit worthiness of such proposed assignee. 9. Events of Default and Remedies. 9.1 Borrower Events of Default. The occurrence of any of the following shall, after the giving of any notice and expiration of any applicable cure period as described therein, constitute an event of default by Borrower hereunder ("Event of Default"): (a) The failure of Borrower to pay or perform any monetary covenant or obligation under the terms of this Note without curing such failure within ten (10) calendar days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower); (b) The failure of Borrower to perform any non -monetary covenant or obligation under this Note without curing such failure within thirty (30) calendar days after receipt of written notice of such default from City (or from any party authorized by City to deliver such notice as identified by City in writing to Borrower) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency. Provided, however, that if any default with respect to a non -monetary obligation is such that it cannot be cured within a 30 -day period, it shall be deemed cured if Borrower commences the cure within said 30 -day period and diligently prosecutes such cure to completion thereafter. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections 9.1(e) or 9.1(f) below; 882/03675MI23 2765748.6 a12/16/15 -6- (c) The failure of Borrowers to perform any covenant or obligation under the Agreement, City Deed of Trust or City Regulatory Agreement, unless the default is cured within the applicable cure period (if any). (d) The material falsity of any representation or breach of any representation or warranty made by Borrower under the terms of this Note, the Agreement, the City Regulatory Agreement or the City Deed of Trust; (e) Borrower or any constituent member or general partner, or majority shareholder, of Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated bankrupt or insolvent or (v) commence a voluntary petition that is not withdrawn within ten (10) calendar days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding; (f) If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower or any constituent member or general partner or majority shareholder of Borrower, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower's assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days; (g) Voluntary cessation of the operation of the Property for a continuous period of more than thirty (30) calendar days or the involuntary cessation of the operation of the Property for a continuous period of more than sixty (60) days; (h) A transfer in violation of Section 1.5 of the Agreement; or (i) Subject to the notice and cure provisions set forth in the Agreement, Borrower shall be in default under any of the terms of the Senior Loan, any other financing, or any other secured or unsecured obligation relating to the Property, unless the default is cured within the cure period, if any, applicable thereto under the terms and obligation which is in default. 9.2 City Remedies. Upon the occurrence and during the continuance of an Event of Default hereunder, City may, in its sole discretion, take any one or more of the following actions: (a) By notice to Borrower and the Qualified Tax Credit Investor, except in the case of a default by Borrower under Section 9.1(e) or Section 9.1(f) in which event no notice pursuant to this Note shall be required, declare the entire then unpaid principal balance of the City Loan immediately due and payable, and the same shall become due and payable without 882/036753-0123 2765748.6 a12/16/15 -7- further demand, protest or further notice of any kind, all of which are expressly waived. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the City Loan shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full; (b) Subject to the nonrecourse provisions of Section 4 above, take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion of City, to collect the amounts then due and thereafter to become due hereunder, to exercise its rights under the City Deed of Trust, and to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Note, the Agreement or under any other document executed in connection herewith; (c) Subject to the nonrecourse provision of Section 4 above, upon the occurrence of an Event of Default which is occasioned by Borrower's failure to pay money, City may, but shall not be obligated to, make such payment. If such payment is made by City, Borrower shall deposit with City, upon written demand therefor, such sum plus interest at the Default Rate. In either case, the Event of Default with respect to which any such payment has been made by City shall not be deemed cured until such repayment (as the case may be) has been made by Borrower. Until repaid, such amounts shall have the security afforded the amounts evidenced by this Note; or (d) Subject to the nonrecourse provisions of Section 4 above, upon the occurrence of an Event of Default described in Section 9.1(e) or 9.1(f) hereof, City shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the City Loan and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of City and its counsel to protect the interests of City and to collect and receive any monies or other property in satisfaction of its claim. 9.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Note or now existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as City may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient by City. In order to entitle City to exercise any right or remedy reserved to it under this Note, no notice shall be required except as expressly provided herein. 10. Agreement to Pay Attorneys' Fees and Expenses. In the event that City brings any action or files any proceeding in connection with the enforcement of its rights under this Note or the City Deed of Trust, as a consequence of any breach by Borrower of its obligations thereunder, the prevailing party in such action or proceeding shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures 882/036753-0123 2765748.6 a12/16/15 'g' paid by the losing party. The attorneys' fees so recovered shall include fees for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until the final judgment is satisfied in full. hi addition to the foregoing award of attorneys' fees, the prevailing party in any lawsuit on this Note or the City Deed of Trust shall also be entitled to its reasonable attorneys' fees incurred in any post judgment proceedings to collect or enforce the judgment. In addition to the foregoing, Borrower agrees to pay or reimburse City, upon demand by City, for all costs incurred by City in connection with enforcement of this Note or the City Deed of Trust, including without limitation, reasonable attorneys' fees and costs, if there shall be filed by or against Borrower any proceedings under any federal or state bankruptcy or insolvency laws, whether City is a creditor in such proceedings or otherwise. 11. Notices. All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under this Note shall be in writing and shall be given by personal delivery, first class mail certified or registered, return receipt requested, or reputable overnight delivery service that provides a receipt with the time and date of delivery and addressed as follows: City of Newport Beach To City 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager With a copy to: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: Community Development Director Newport Veterans Housing LP To Borrower: c/o Community Development Partners 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 Attn: Eric A. Paine With a copy to: Law Offices of Patrick R. Sabelhaus 1006 Fourth Street, Sixth Floor Sacramento, CA 95814 Attn: Stephen A. Strain, Esq. Any Notice shall be deemed received immediately if delivered by hand or by overnight courier, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 12. Severabilitv. The invalidity or unenforceability of any one or more provisions of this Note will in no way affect any other provisions. 882/036753-0123 2765748.6 a12/16/15 -9- 13. Intemretation. Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Note are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Note by Borrower. Borrower has been represented by counsel in the negotiation of this Note, and it shall not be interpreted in favor of or against any party on account of relative responsibilities in drafting. Notwithstanding any other provision of this Note, nothing herein or in this Note shall be deemed to require Borrower to pay interest in an amount in excess of any applicable usury law or other legal limitation on interest, and the terms of this Note shall be interpreted to require in each instance the lesser of (a) the amount stated in this Note, and (b) the maximum applicable legal limit. 14. No Waiver: Consents. Any waiver by City must be in writing and will not be construed as a continuing waiver. No waiver will be implied from any delay or failure by City to take action on account of any default of Borrower. Consent by City to any act or omission by Borrower will not be construed to be a consent to any other or subsequent act or omission or to waive the requirements for City's consent to be obtained in any future or other instance. 15. Governing Law. This Note shall be governed by the internal laws of the State of California without regard to conflict of law principles. 16. Representations and Warranties of Borrower. Borrower hereby warrants and represents to City that: 16.1 Organization and Standing. Borrower is a California legal entity as described in the Agreement, duly organized, qualified to operate in California and validly existing and in good standing under all applicable laws, and has all requisite power and authority to enter into and perforin its obligations under this Note, the Agreement, the City Deed of Trust, the City Regulatory Agreement and all other documents executed in connection herewith. 16.2 Enforceability. This Note and all other instruments to be executed by Borrower in connection with the City Loan constitute the legal, valid and binding obligation of Borrower, without joinder of any other party. 16.3 Authorization and Consents. The execution, delivery and performance of this Note and all other instruments to be executed in connection herewith is consistent with the operating agreement, partnership agreement and any articles and bylaws governing Borrower and have been duly authorized by all necessary action of Borrower's members, partners, directors, officers and shareholders. 882/036753-0123 2765748.6 at2/16/15 -10- 16.4 Due and Valid Execution. This Note and all other instruments to be executed in connection herewith, will, as of the date of their execution, have been duly and validly executed by Borrower. 16.5 Licenses. Borrower will obtain and maintain all material licenses, permits, consents and approvals required by all applicable governmental authorities to own and operate the Property. 16.6 Litigation and Compliance. To the best of Borrower's knowledge, there are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Borrower (other than those as have been previously disclosed in writing to City) which could materially impair its ability to perform its obligations under this Note, nor is Borrower in violation of any laws or ordinances which could materially impair Borrower's ability to perform its obligations under this Note. 16.7 Default. To Borrower's current actual knowledge, there are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an "Event of Default" hereunder, as described in Section 9. 16.8 No Violations. To the best of Borrower's knowledge, the execution and delivery of this Note, the Agreement and all other documents executed or given thereunder, and the performances hereunder and thereunder by Borrower, as applicable, will not constitute a breach of or default under any instrument or agreement to which Borrower may be a party nor, to the best of Borrower's knowledge, will the same constitute a breach of or violate any law or governmental regulation. 17. Approvals. Any review or approval of any matter by the City or any City official or employee under this Note shall be solely for the benefit of City, and neither Borrower nor any other person shall rely upon such review or approval as an indication of the wisdom, soundness, safety, appropriateness, or presence or absence of any matter. Without limiting the generality of the foregoing, Borrower and not City shall be solely responsible for assuring compliance with laws, the suitability of the Property for the Project, the adequacy of the plans, and the safety of the Project construction site, the completed Project, and the operation thereof. 18. Waiver. Subject to Section 4, Borrower agrees that it will still be liable for repayment of this Note, even if the holder hereof does not follow the procedures of presentment, protest, demand, diligence, notice of dishonor and of nonpayment, which requirements are hereby waived. Failure of City or other holder hereof to exercise any right or remedy hereunder shall not constitute a waiver of any future or other default. No acceptance of a past due installment or indulgence granted from time to time shall be construed to be a waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waiver or preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waive or preclude the exercise of any other rights which City may have. 982/036753-0123 2765748.6 a12/16/15 -1 1- [End — Signature Page Follows] 882/036753-0123 2765748.6 ew16n5 12- IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first above written. NEWPORT VETERANS HOUSING LP, a California limited partnership Dated: j2 l ij 12015 By: CDP Newport LLC, a California limited liability company Its: Administrative General Partner By: Community Development Partners, a California corporation Its: Sole Managing ember By: Eric Paine Its: CEO By: Mercy House Living Centers, a California nonprofit public benefit corporation Its: Managing General Partner By: qzzl — L aynes Its: Pr ident APPROV \ AS TO FORM: Dated: 1 z I , 2015 Aaron C. Harp UM 1t130K' City Attorney 882/036753-0123 2765748.6 a12/16/15 -13- ATTACHMENT NO. 6 CITY DEED OF TRUST [SEE FOLLOWING DOCUMENT] 887/036753-0123 2765748.6 a12/08/15 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager APN: [Free Recording Requested Government Code Sections 6103 and 27383] DEED OF TRUST WITH ASSIGNMENT OF RENTS This DEED OF TRUST, dated as of , 2015 for identification purposes only, is made by and among NEWPORT VETERANS HOUSING, LP, a California limited partnership ("Trustor'), , a ("Trustee"), and CITY OF NEWPORT BEACH, a California municipal corporation and charter city (`Beneficiary"). Trustor grants, transfers and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, and right of entry and possession, all of its title and interest in that real property (the "Property") in the City of Newport Beach, County of Orange, State of California, described in Exhibit A attached hereto and incorporated herein by this reference. Together with Trustor's interest in all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Property; and Together with the rents, issues and profits thereof; and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and Together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and Together with all plans, drawings, specifications, and articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the completion and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution 882/036753-0123 2765748.6.12/16/15 -2- therefor, whether or not the same are, or shall be attached to said building or buildings in any manner. To have and to hold the property hereinbefore described (including the Property and all appurtenances), all such property being referred to collectively herein as the "Property," to Trustee, its successors and assigns forever. FOR THE PURPOSE of securing (1) payment of indebtedness of Trustor to the Beneficiary in the principal sum of ONE MILLION NINE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($1,975,000) (the "City Loan"), evidenced by a promissory note dated 12 (f % 2015 between Trustor and Beneficiary (the "City Loan Note"), together with all sums due thereunder including interest and other charges; and (2) the performance of each agreement of Trustor in this Deed of Trust and the City Loan Note, including, without limitation, that certain Affordable Housing Agreement entered into by and between Trustor and Beneficiary on or about t'- 1 14 , 2015 (the "AHA"), and that certain Regulatory Agreement and Declaration of Covenants and Restrictions entered into by and between Trustor and Beneficiary on or about the same date hereof (collectively, the "City Loan Documents"). Said City Loan Note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances of the City Loan evidenced by any note reciting that it is secured hereby. AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: That it will pay the City Loan Note at the time and in the manner provided therein; 2. That it will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed, namely, as affordable rental housing; 3. That the City Loan Note is incorporated herein and made a part of this Deed of Trust. Upon default under the City Loan Note or this Deed of Trust, Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable; 4. That all rents, profits and income from the Property covered by this Deed of Trust are hereby assigned to Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder, to collect such rents, profits and income; 5. That upon default hereunder and the expiration of any applicable notice and cure periods, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Property described herein and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the improvements now existing or hereafter erected on the Property insured against loss by fire and such other hazards, casualties and contingencies as may be required in writing from time to time by Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies, in the amount of 882/036753-0123 2765748.6 a12/16/15 -3- the replacement value of the improvements. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary and certificates thereof together with copies of original policies shall be deposited with Beneficiary. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary subordinate to the rights and interest of the beneficiary of the deed of trust securing the Senior Loan, as described in paragraph 30, below) and certificates thereof together with copies of original policies shall be deposited with Beneficiary; 7. To pay, before delinquency, any taxes and assessments affecting said Property when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto, all costs, fees and expenses of this Trust unless exemption is obtained therefrom; 8. To keep said Property in good condition and repair, not to remove or demolish any buildings thereon, to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor (unless contested in good faith if Trustor provides security satisfactory to Beneficiary that any amounts found to be due will be paid and no sale of the Property or other impairment of the security hereunder will occur); to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said Property in violation of law and/or covenants, conditions and/or restrictions affecting said Property; not to permit or suffer any alteration of or addition to the buildings or improvements hereafter constructed in or upon said Property without the consent of Beneficiary; 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Beneficiary or Trustee, being authorized to enter upon said Property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay counsel's reasonable fees; 11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the City Loan Note; 882/036753-0123 2765748.6 al2/16/15 -4- 13. That the City Loan advanced hereunder is to be used for the acquisition of the Property; and upon the failure of Trustor to keep and perform such covenants, the principal sum and all arrears of interest, and other charges provided for in the City Loan Note shall, at the option of Beneficiary, become due and payable, anything contained herein to the contrary notwithstanding; 14. Trustor further covenants that it will not voluntarily create, suffer or permit to be created against the Property, subject to this Deed of Trust, any lien or liens (other than the lien of a deed of trust recorded prior in time and right to this Deed of Trust and/or the lien of a deed of trust to which Trustor has expressly agreed to subordinate the lien of this Deed of Trust, with City's written permission) except as authorized by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on the Property; 15. That any and all improvements made or about to be made upon the Property, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office. IT IS MUTUALLY AGREED THAT: 16. Subject to any cure rights under the AHA, if the construction of any improvements as herein referred to shall not be carried on with reasonable diligence, or shall be discontinued at any time for any reason other than events of Force Maieure pursuant to Paragraph 35 hereof, Beneficiary, after due notice to Trustor or any subsequent owner, is hereby invested with full and complete authority to enter upon the Property, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations wherever necessary, either in its own name or in the name of Trustor, and to pay and discharge all debts, obligations and liabilities incurred thereby. All such sums so advanced by Beneficiary (exclusive of advances of the principal of the indebtedness secured hereby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this Deed of Trust and shall be due and payable on demand; 17. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Trustor shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor subject to the prior right to any insurance proceeds or condemnation awards of the beneficiary of the deed of trust securing the Senior Loan, as described in paragraph 30; 18. Upon default by Trustor in making any payments provided for herein or in the City Loan Note secured hereby, and if such default is not made good within fifteen (15) calendar days after notice from Beneficiary, or if Trustor shall fail to perform any covenant or agreement in this Deed of Trust within thirty (30) calendar days after written demand therefor by Beneficiary (or, in the event that more than thirty (30) calendar days is reasonably required to cure such default, should Trustor fail to promptly commence such cure, and diligently prosecute 882/036753-0123 2765748.6 at2/16/15 -5- same to completion), Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the City Loan Note and all documents evidencing expenditures secured hereby; 19. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell Trustor's interest in said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said interest by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying Truster's interest in the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorneys' fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the City Loan Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto; 20. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which; when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee; 21. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 22. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the City Loan Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto"; 23. The trust created hereby is irrevocable by Trustor; 24. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, 882/036753-0123 2765748.6 a12/16/15 -6- their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall include not only the original Beneficiary hereunder but also any successor to Beneficiary's rights, powers, and responsibilities, and any future owner and holder including pledgees, of the City Loan Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of each Trustor hereunder are joint and several; 25. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law, Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee; 26. The undersigned Trustor requests that copies of any notice of default and of any notice of sale hereunder be mailed to it at: c/o Community Development Partners 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 Attention: Eric A. Paine Trustor agrees, at any time after receipt of a written request from Beneficiary, to furnish to Beneficiary a detailed statement in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the Property and their use as may be requested by Beneficiary. 27. In order to induce Beneficiary to make the loan evidenced hereby, Trustor agrees that in the event of any Transfer of the Property without the prior written consent of Beneficiary (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the deed of trust securing the Senior Loan), Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this paragraph 28, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor from any liability thereunder without the prior written consent of Beneficiary. (a) As used herein, "transfer" includes the sale, agreement to sell, transfer or conveyance of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. "Transfer" shall not include the leasing of individual residential units on the Property or any transaction that doesn't require approval by the Beneficiary pursuant to Section 1.5 of the AHA. (b) The term "sale" means any transfer, assignment, conveyance or lease 882/036753-0123 2765748.6 a12/16/15 -7- (other than to a tenant for occupancy) of the Property and/or the improvements thereon, or any portion thereof, or any interest therein by the Trustor, but excludes any purchase option agreement given to Trustor's general partner(s). Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development. Sale shall also not include any transaction that doesn't require approval by the Beneficiary pursuant to Section 1.5 of the AHA. Notwithstanding anything to the contrary contained in this Deed of Trust or in the City Loan Note, prior to declaring any default or taking any remedy permitted under this Deed of Trust, the City Loan Note or applicable law based upon an alleged default, the Qualified Tax Credit Investor (the "Investor"), if there is one, shall have a period of not less than thirty (30) calendar days to cure such alleged default; provided, however, if in order to cure such default the Investor reasonably believes that it must remove a general partner of Trustor, or all of them, pursuant to authority granted under the agreement that sets forth the terms of Trustor's limited partnership (the "Partnership Agreement"), and consistent with Section 1.5 of the AHA, the Investor shall so notify Beneficiary and so long as the Investor is reasonably and diligently attempting to remove the general partner or general partners, the Investor shall have until the date that is thirty (30) calendar days after the effective date of the removal of the general partner or general partners to cure such default. 28. Trustor shall permit Beneficiary and its agents or representatives to inspect the Property at any and all reasonable times, with twenty-four (24) hours advance notice. Inspections shall be conducted so as not to interfere with the tenants' use and enjoyment of the Property. 29. It is hereby expressly agreed and acknowledged by Trustor and Beneficiary that this Deed of Trust will be a subordinate deed of trust only to the deed of trust securing the Acquisition Loan before the close of escrow. Further, this Deed of Trust shall only be subordinate to the deeds of trust securing the Construction Loan and Take Out Loan upon receipt and approval of the Nine Percent (9%) Tax Credits by Developer, and that the City Loan secured hereby, and the City Loan Note will be subject and subordinate only to these deeds of trust as such are defined in the AHA (collectively referred to as the "Senior Loan"). 30. For purposes of this Deed of Trust, "Hazardous Materials" means any substance, material, or waste which is or becomes regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste", "acutely 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) 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 882/036753-0123 2765748.6 a12/16/15 -$- of Regulations, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., (xii) methyl -tertiary butyl ether, (xiii) perchlorate or (xiv) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any governmental requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to the environment. For purposes hereof, "Hazardous Materials" excludes materials and substances in quantities as are commonly used in the construction and operation of an apartment complex provided that such materials and substances are used in accordance with all applicable laws. 31. In addition to the general and specific representations, covenants and warranties set forth in this Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used (whether by Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials), caused by Trustor. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property (`Environmental Complaint") from any person or entity, including, without limitation, the United States Environmental Protection City ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. (d) Without limitation of Beneficiary's rights under this Deed of Trust, 882/036753-0123 2765748.6 al2/16/15 -9- Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the City Loan Note secured hereby. 32. The following shall be an "Event of Default:" (a) Failure of Trustor to pay, when due, principal and interest and any other sums or charges on the City Loan Note, in accordance with the provisions set forth in the City Loan Note and such failure is not cured within fifteen (15) calendar days after receipt of written notice from Beneficiary; or (b) A violation of the terms, conditions or covenants of the City Loan Note, this Deed of Trust, the AHA or City Regulatory Agreement after the expiration of any applicable cure period. 33. Subject to the extensions of time set forth in paragraph 35, and subject to the further provisions of this paragraph 34 and of paragraphs 36 and 37, failure or delay by the Trustor to perform any term or provision of this Deed of Trust constitutes a default under this Deed of Trust. The Trustor must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. (a) The Beneficiary shall give written notice of default to the Trustor with a copy to the limited partners of Trustor for which Beneficiary has been supplied with address for notice, specifying the default complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (b) The Trustor shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within thirty (30) calendar days after receipt of written notice (or such additional time as may be reasonably necessary to correct the cause). (c) Any failures or delays by the Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by the Beneficiary in asserting any of its rights and remedies shall not deprive the Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. 34. Notwithstanding specific provisions of this Deed of Trust, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; 882/036753-0123 2765748.6 a12/16/15 '10' governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier•, acts of the other party; acts or failure to act of the Beneficiary, or any other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not excuse performance by Beneficiary); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. 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 the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within fifteen (15) calendar days after the commencement of the cause. Times of performance under this Deed of Trust may also be extended in writing by the Beneficiary and Trustor. 35. If a monetary event of default occurs under the terms of the City Loan Note or this Deed of Trust, prior to exercising any remedies thereunder Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of fifteen (15) calendar days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under the City Loan Note and this Deed of Trust. 36. If a non -monetary event of default occurs under the terms of the City Loan Note or this Deed of Trust, prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty (30) calendar days, Trustor shall have such period to effect a cure prior to exercise of remedies by the Beneficiary under the City Loan Note and this Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) calendar days, and Trustor (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) calendar days after the first notice of default is given. 37. Beneficiary shall provide those limited partners of Trustor for which Beneficiary has been supplied with address for notice with a copy of any written notice provided to Trustor under the terms of the City Loan Documents. In the event of a monetary event of default, Trustor's limited partners shall have a period of fifteen (15) calendar days after receipt of such notice, or such longer period of time as may be set forth in the City Loan Documents, to cure the default prior to exercise of any remedy by Beneficiary. In the event a non -monetary event of default occurs under any City Loan Document, Trustor's limited partners shall have a period of thirty (30) calendar days after receipt of such notice, or such longer period of time as may be set forth in the City Loan Documents, to cure the default prior to exercise of any remedy by Beneficiary. Notwithstanding anything to the contrary contained in the City Loan Documents, Beneficiary hereby agrees that any cure of any default made or tendered by Trustor's limited partners shall be deemed to be a cure by Trustor and shall be accepted or rejected on the same basis as if such cure were made or tendered by Trustor. 38. Subject to paragraph 35, Trustor, upon the occurrence of an Event of Default as described in paragraph 33 that has not been cured with the applicable cure period set forth in paragraph 36 or 37, shall be obligated to repay the City Loan and, subject to the nonrecourse provision of the City Loan Note, Beneficiary may seek to enforce payment of any and all 882/036753-0123 2765748.6 al2/16/15 -11- amounts due by Trustor pursuant to the terms of the City Loan Note. 39. All expenses (including reasonable attorneys' fees and costs and allowances) incurred in connection with an action to foreclose, or the exercise of any other remedy provided by this Deed of Trust, including the curing of any Event of Default, shall be the responsibility of Trustor. 40. Except as provided in paragraph 30, each successor owner of an interest in the Property, other than through foreclosure, deed in lieu of foreclosure or an owner who takes an interest in the Property after a foreclosure has occurred, shall take its interest subject to this Deed of Trust. 41. Notwithstanding anything to the contrary herein, Beneficiary agrees that any extended low-income housing commitment (as such term is defined in Section 42(h)(6)(B) of the Internal Revenue Code) (the "Extended Use Agreement") shall be subordinate to this Deed of Trust and shall be recorded against the Property; provided that such Extended Use Agreement, by its terms, will terminate upon foreclosure or upon a transfer of the Property by instrument in lieu of foreclosure in accordance with said Section 42(h)(6)(B). [Signatures on Following Page] 882/036753-0123 2765748.6 a12/16/15 -12- "Trustor" NEWPORT VETERANS HOUSING LP, a California limited partnership Dated: C , 2015 By: CDP Newport LLC, a California limited liability company Its: Administrative General Partner By: Community Development Partners, a California corporation Its: Sole Managing ember By: ric cine Its: CEO By: Mercy House Living Centers, a California nonprofit public benefit corporation Its: Managing General Partner By: Larry4faynes Its: President 882/036753-0123 2765748.6 a12/16/15 -13- A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) )ss. COUNTY OF Oran1a. ) On 0 ece�.ber {�. 7.016 before me, Tito No}ory Public Notary Public, (here insert name and title of the officer) personally appeared Er;c- PA; ne; who proved to me on the basis of satisfactory evidence to be the person(d) whose name(e)o/are subscribed to the within instrument, and acknowled ed to me that@f /she/they executed the same in�er/their authorized capacity(yes), and that by ht /her/their signature(s) on the instrument the person(e, or the entity upon behalf of which the person(j6 acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS y and and official sea]. Signature.: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) )ss. COUNTY OF 0 rat n Com VIIIA n 02099074 Nota - cow" Cowry Comm. Expirn Fob 6 2019 OnUecerlDM IWiX013 beforeme,Tint Winotr INa1'ar4 PinbIic Notary Public, (here insert name�tle of the officer) personally appeared J rrrr4 Nrs5 who proved to me on the basis of satisfactory evidence to be the personfp) whose name(Sj ID/are subscribed to the within instrument, and acknowledged to me that�i /she/they executed the same in�/her/their authorized capacity(igg), and that by�i`�i /her/their signature(g) on the instrument the person(, or the entity upon behalf of which the personV acted, executed the instrument. I certify under PENALTY OF PERJURY under foregoing paragraph is true and correct. WITNESS my hand and official seal. 1 Signature_ 882/036753-0123 2765748.6 al2/16/15 -14- the laws of the State of California that the TIM WINGER Commutroo 0 2099071 `NOCKY ft nyomH (seal) Com fM 9 2019 ATTACHMENT NO. 7 CITY REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS [SEE FOLLOWING DOCUMENT] 882/036753-0123 2765748.6 x12/08/15 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 27383) REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this A �L day of ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City") and NEWPORT VETERANS HOUSING, LP, a California limited partnership ("Developer"). RECITALS: A. Developer is the owner of fee title to that certain real property more particularly described in Exhibit "A", attached hereto and incorporated by reference herein (the "Site"). B. Pursuant to an Affordable Housing Agreement entered into by and between Developer and City, dated �-XCkW ,'A/ 9 Z lrs (the "AHA"), City has agreed to provide financial assistance to Developer in an amount up to One Million Nine Hundred Seventy Five Thousand Dollars ($1,975,000.00) (the "City Loan") for the purpose of assisting Developer to acquire the Site of an affordable rental apartment complex consisting of twelve (12) units (the "Project"). The AHA requires Developer to enter into this Agreement, which provides, among other requirements, that twelve (12) of the apartment units within the Project be rented to and occupied by "Eligible Tenants" (as those terms are defined in Article 1.0 below). The AHA is incorporated herein by reference. C. Reference is also made to the following documents, of even date herewith: (i) Note, by Developer as `Borrower" in favor of the City as lender ("City Note"). The City Note evidences the City Loan. (ii) Deed of Trust with Assignment of Rents, by and between Developer as trustor and City as beneficiary, and recorded in the Official Records of the County of Orange ("City Deed of Trust"). The City Deed of Trust secures (a) repayment of the City Note, and (b) performance of Developer's obligations hereunder, and under the AHA. 882/036753-0123 2765748.6 a12/16/15 ' 1' The AHA, the City Note and the City Deed of Trust are referred to herein collectively as the "City Agreements." The City Agreements are incorporated herein as if fully set forth. D. To assist Developer with rehabilitating the Project, Developer intends to apply for an allocation of low income housing tax credits from the California Tax Credit Allocation Committee (the "CTCAC") pursuant to pursuant to the Tax Credit Program (as defined below). If Developer is awarded an allocation of Tax Credits Developer will be required to enter into a regulatory agreement with TCAC (the "Tax Credit Regulatory Agreement") that will be recorded in the Official Records of the County of Orange. E. Pursuant to the City Agreements, Developer has agreed to acquire the Site and thereafter maintain the Project with not fewer than twelve (12) units restricted to rental to and occupancy by Eligible Tenants. F. City and Developer now desire to place restrictions upon the use and operation of the Site, in order to ensure that the Site shall be operated continuously as an affordable rental apartment complex in accordance with the terms hereof until the expiration of the Term (as defined below). AGREEMENT: NOW, THEREFORE, the Developer and City declare, covenant and agree, by and for themselves, their heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that, commencing upon the Effective Date as follows: 1.0 1.1 Affiliate. As used in this Agreement, the term "Affiliate" shall mean any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer which, if Developer is a partnership or limited liability company, shall include each of the constituent members or general partners, respectively, thereof. The term "control" as used in the immediately preceding sentence means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. 1.2 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed the maximum allowable rent allowed under the CTCAC to be charged by Developer and paid by Eligible Tenants. 1.3 AMI. As used in this Agreement, the term "AMI" or "Area Median Income" shall mean the median family income (adjusted for family size) for the Orange County area established by the U.S. Department of Housing and Urban Development ("HUD"). 1.4 Capital Improvements. As used in this Agreement, the term "Capital Improvements" means all work and improvements with respect to the Site for which costs and 882/036753-0123 2765748.6 al2/16/15 —2— expenses may be capitalized in accordance with generally accepted accounting principles as in effect from time to time, consistently applied. 1.5 City. As used in this Agreement, the term "City" means the City of Newport Beach, a California municipal corporation and charter city. 1.6 City Manager. As used in this Agreement, the term "City Manager" shall mean the individual duly appointed to the position of City Manager of the City of Newport Beach, or his or her authorized designee. Whenever an administrative action is required by City to implement the terms of this Agreement, the City Manager, or his or her authorized designee, shall have authority to act on behalf of City. 1.7 CTCAC. As used in this Agreement, "CTCAC" shall mean the California Tax Credit Allocation Committee. 1.8 Eligible Tenant. As used in this Agreement, the term `Eligible Tenant" shall mean a "Senior Household" or "Veteran Household", both as defined herein, whose annual income does not exceed the thirty percent (30%), forty percent (40%) fifty percent (50%) or sixty percent (60%) of the AMI level designated for the Unit to be occupied. 1.9 Manager's Unit. As used in this Agreement, the term "Manager's Unit" shall mean a Unit occupied by an on-site property manager who is also an Eligible Tenant. 1.10 Operating Expenses. As used in this Agreement, the term "Operating Expenses" shall have the meaning ascribed in the City Note. 1.11 Operating Income. As used in this Agreement, the term "Operating Income" shall have the meaning ascribed in the City Note. 1.12 Qualified Tax Credit Investor. As used in this Agreement, the term "Qualified Tax Credit Investor" shall mean any entity or entities experienced in investing in projects financed with Tax Credits which acquires an interest in the owner of the Project and has the right to receive Tax Credits. 1.13 Restricted Unit Matrix. As used in this Agreement, the term "Restricted Unit Matrix" shall mean that certain matrix attached hereto and incorporated herein as Exhibit "C". This matrix requires the 12 one -bedroom Units at the project site to be the following: 6 Units at 30% AMI, 2 Units at 40% AMI, 3 Units at 50% AMI, and 1 Unit at 60%. This matrix additionally requires that seven (7) Units be occupied by Veteran Households and five (5) Units be occupied by Senior Households with a leasing preference for Veteran Senior Households.. 1.14 Senior Household. As used in this Agreement, the term "Senior Household" shall mean any household containing one or more persons who are 62 years of age or older and meeting applicable provisions of California Civil Code Section 51.3 and the federal Fair Housing Act. 1.15 Tax Credit Proms. As used in this Agreement, the term "Tax Credit Program" shall mean the low-income housing tax credit program authorized pursuant to Internal Revenue 882/036753-0123 2765748.6 al2/16/15 —3— Code Section 42, California Health and Safety Code Sections 50199.4-50199.22, California Revenue and Taxation Code Sections 12205, 12206, 17057.5, 17058, 23610.4, and 23610.5, and applicable federal and State regulations. 1.16 Tax Credit Regulatorygreement. As used in this Agreement, the term "Tax Credit Regulatory Agreement" shall have the meaning ascribed in Recital D of this Agreement. 1.17 Tax Credits. As used in this Agreement, the term "Tax Credits" shall mean the low income housing tax credits granted by TCAC for the Project pursuant to the Tax Credit Program. 1.18 Term. As used in this Agreement, the term "Term" shall mean the period commencing on the execution hereof, and terminating on the fifty-fifth (55`h) anniversary hereof unless Developer is successful in obtaining an allocation of Nine Percent (9%) Tax Credits in which case termination shall be on the fifty-fifth (55`h) anniversary of the recording of a Notice of Completion for the rehabilitation described in the Scope of Work. 1.19 Unit. As used in this Agreement, the term "Unit" or "unit" shall mean a rental apartment dwelling unit on the Site. 1.20 Veteran Household. As used in this Agreement, the term "Veteran Household" shall mean any household which includes one or more persons who served in the active military, naval, or air service of the United States, or as a member of the National Guard who was called to and released from active duty or active service, for a period of not less than 90 consecutive days or was discharged from the service due to a service connected disability within that 90 -day period. 2.0 RESIDENTIAL RENTAL PROPERTY. 2.1 Construction of the Project on the Site. Developer shall acquire and rehabilitate the Project on the Site in accordance with the City Agreements, including the Schedule of Performance set forth in the AHA, for the purpose of providing the Units described herein and in the City Agreements. The Project shall be owned, managed, and operated as a rental apartment project, with each of the Units rented to and occupied by Eligible Tenants, as provided in this Agreement. 2.2 Facilities. All of the Units in the Project shall contain facilities for living, sleeping, eating, cooking and sanitation in accordance with this Agreement, the AHA, the City Agreements, and all of the permits and approvals for the Project. 2.3 Residential Use. Without the City's prior written consent, which consent may be given or withheld in its sole and absolute discretion, none of the Units in the Project will at any time be utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the Units be used as a place of business except as may otherwise be allowed by applicable law. 882/036753-0123 2765748.6 x12/16/15 -4- 2.4 Services. Services will be provided by Mercy House A specific detailed services plan shall be put together based on the needs of the tenants who live at the property. The property shall commit to providing services as required and in compliance conditions of CTCAC. Services shall include at a minimum a Service Coordinator or Other Services Specialist, as further defined herein. Service Coordinator responsibilities shall include, but are not limited to: (a) providing tenants with information about available services in the community, (b) assisting tenants in accessing services through referral and advocacy, and (c) organizing community -building and/or other enrichment activities for tenants (such as holiday events, tenant council, etc.). Other Services Specialist shall provide individualized assistance, counseling and/or advocacy to tenants, such as to assist them in accessing education, securing employment, securing benefits, gaining skills or improving health and wellness. Additional services shall be provided by and in coordination with the United States Department of Veterans Affairs ("VA"). Specifically, residents participating in the Veterans Affairs Supportive Housing ("VASH") program shall receive case management services that are included as part of the program. 2.4 Conversion of Units. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Developer take any steps in connection with the conversion to such ownership or uses to condominiums, or to any other form of ownership, without the prior written approval of City which approval may be given or withheld in its sole and absolute discretion. 2.5 No Preference. Except as set forth in Section 3.4 below, all of the Units will be available for rental in accordance with the terms of this Agreement, and the Developer shall not give preference to any particular class or group of Eligible Tenants in renting the Units in the Project. 2.6 Liability of Developer. Developer and any manager it employs shall not incur any liability under this Agreement as a result of fraud or intentional misrepresentation by a tenant. 3.0 OCCUPANCY OF RESTRICTED UNITS BY ELIGIBLE TENANTS. Developer hereby represents, warrants, and covenants as follows: 3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of this Agreement, the Units shall be continuously occupied or held vacant and available for occupancy by Eligible Tenants in accordance with the Restricted Unit Matrix. 3.2 Occupancy By Eligible Tenant. A Unit occupied by an Eligible Tenant who qualified as an Eligible Tenant at the commencement of the occupancy shall be treated as occupied by an Eligible Tenant throughout their tenancy. A Unit previously occupied by an Eligible Tenant and then vacated shall be considered occupied by an Eligible Tenant until the Unit is reoccupied, provided Developer uses its best efforts to re -lease the vacant Unit to an Eligible Tenant in compliance with the Restricted Unit Matrix. Any vacated Unit shall be held vacant until re-leased to an Eligible Tenant. Developer shall take any or all of the following 882/036753-0123 2765748.6 al2/16/15 -5- actions, as necessary, to locate Eligible Tenants for the Project: (i) notification to the City of the available Unit; and (ii) advertisement of the available Unit in a newspaper of general circulation in the City. 3.3 Manager's Unit. At all times one (1) unit will be occupied by an on-site property manager who is also an Eligible Tenant. 3.4 Veteran Preference. In addition to the seven (7) Units restricted for Occupancy by Veteran Households Developer agrees to the maximum extent permitted by applicable law, to provide a preference in the leasing of all Units, throughout the Term, to Eligible Tenants that are also Veteran Households. 3.5 Income Computation and Certification. Immediately prior to an Eligible Tenant's occupancy of a Unit, Developer shall obtain an Income Computation and Certification Form and the required third party verification requested within the form required by CTCAC (the "CTCAC Income Certification Form") from each such Eligible Tenant dated no more than 90 days prior to the date of initial occupancy in the Project by such Eligible Tenant. Developer shall use good faith efforts to verify that the income provided by an applicant is accurate by complying with any rules or regulations promulgated by TCAC for doing so. Developer shall maintain in its records each Income Computation and Certification Form obtained pursuant to this section for a minimum of five (5) years. Developer shall provide a copy of the CTCAC Income Certification Form, third party source documentation of income and assets and a copy of the executed lease to City annually upon request. 3.6 Recertification. Within sixty (60) days prior to the first anniversary date of the occupancy of a Unit by an Eligible Tenant, and on each anniversary date thereafter, Developer shall recertify the income of such Eligible Tenant by obtaining a completed Income Recertification Form, in the form required by CTCAC. Developer shall provide a copy of the Income Recertification Form, third party source documentation of income and assets and a copy of the executed lease renewal to City annually upon request. If any completed Income Recertification Form indicates that an Eligible Tenant is no longer qualified for a unit at the rent level to which said Eligible Tenant's Unit is restricted such Unit shall still be deemed in compliance with this Agreement so long as the next available Unit is rented at the original rent level of said Eligible Tenant's Unit. Any such Unit shall continue to be in compliance with this Agreement until such time as the Eligible Tenant's income exceeds 140% of AMI at which time Developer shall take all legal action available to remove such tenant and rent the Unit to a new Eligible Tenant. 3.7 Annual Report. The Developer shall file with the City an annual report no later than sixty (60) days after the end of each fiscal year as established for the Project. The report shall contain a certification by the Borrower as to such information as the City may then require including, but not limited to, the following; a. The fiscal condition of the Project, including a financial statement for the previous fiscal year that includes a balance sheet and a profit and loss statement indicating any surplus or deficit in operating accounts; a detailed itemized listing of income and expenses; the amounts of any fiscal reserves and the total amount 882/036753-0123 2765748.6 al2/16/15 -6- of Residual Receipts received. b. The substantial physical defects in the Project, including a description of any major repair or maintenance work undertaken or needed in the previous and current fiscal years. Such statement shall describe what steps the Borrower has taken in order to maintain the Project in a safe and sanitary condition in accordance with applicable housing and building codes. C. The occupancy of the Project indicating: the verified income of each current household; and ii.. the current rents charged each household and whether these rents include utilities. d. General management performance, including tenant relations and other relevant information. e. A summary of the information received from the recertification of tenants' incomes. f. Evidence that the insurance required by Section 7 below has been maintained. 3.8 Annual Operating Budget. The fiscal year for the Project shall commence on January 1, and conclude on December 31. No later than sixty (60) days prior to the beginning of each subsequent fiscal year of the Project, the Developer shall submit to the City a proposed annual operating budget on a form provided by the City. The proposed annual operating budget shall set forth the Developer's estimate of the Project's income, operating expenses and debt service for the upcoming year, reserves, proposed rent adjustments, and a year-to-date operating statement. Developer shall operate the Project in accordance with the operating budget on file with the City. Such budget shall show all anticipated income, debt service and expenses for management, operations, reserves and maintenance for the first fiscal year or portion thereof following initial occupancy. 3.9 Determination of Affordable Rent. All Units shall be rented at an Affordable Rent in accordance with the Restricted Unit Matrix. 3.9.1 Adiustment of Rent. Rent may change as changes in the applicable gross rent amounts, the income adjustments, or the monthly allowance for utilities and services warrant. Any increase in rents is subject to the provisions of outstanding leases. Developer must provide households occupying the Units not less than thirty (30) days prior written notice before implementing any rent increase. 3.10 Maintenance of Records. Developer shall maintain complete and accurate records pertaining to the Units, and shall permit any duly authorized representative of the City, upon 882/036753-0123 2765748.6 a12/16/15 -7- twenty-four (24) hours prior notice and during business hours, to inspect the books and records of Developer pertaining to the Project including, but not limited to, those records pertaining to the occupancy of the Units. 3.11 Reliance on Tenant Representations. Each tenant lease shall contain a provision to the effect that Developer has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupancy of the Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease. Each such lease shall also include the lease rider attached hereto and incorporated herein as Exhibit "B" and shall state that occupation of the Unit is subject to the income restrictions described in this Agreement. 3.12 Remedy For Violation of Rental Requirements. 3.12.1 It shall constitute a default for Developer to charge or accept for any Unit rent amounts in excess of the amount provided for in Section 3.5 of this Agreement. In the event that Developer charges or receives such higher rental amounts, Developer shall be required to reimburse the tenant that occupied said Unit at the time the excess rent was received for the entire amount of such excess rent received, provided that such tenant can be found following reasonable inquiry. For purposes of this Section 3.12, "reasonable inquiry" shall include Developer's review of information provided by the tenant as part of the tenant's application and forwarding information provided by the tenant, and Participant's reasonable attempts to contact the tenant and any other persons listed in either of such documents. If, after such reasonable inquiry, Developer is unable to locate the tenant, Developer shall pay such sums to the City. 3.12.2 Except as otherwise provided in this Agreement, it shall constitute a default for Developer to knowingly (or without investigation as required herein) initially rent any Unit to a tenant who is not an Eligible Tenant. In the event Developer violates this Section, in addition to any other equitable remedy City shall have for such default, Developer, for each separate violation, shall be required to pay to City an amount equal to (i) the greater of (A) the total rent Developer received from such ineligible tenant, or (B) the total rent Developer was entitled to receive for renting that Unit, plus (ii) any relocation expenses incurred by City as a result of Developer having rented to such ineligible person. The terms of this Section shall not apply if Developer rents to an ineligible person as a result of such person's fraud or misrepresentation. THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN THIS SECTION 3.12 (THE "DAMAGE AMOUNTS") CONSTITUTE A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT CITY WOULD SUFFER DUE TO THE DEFAULTS BY DEVELOPER SET FORTH IN SECTIONS 3.12.1 THROUGH 3.12.2, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO CITY AND ACCOMPLISHMENT OF CITY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.8 SHALL BE THE 882/036753-0123 2765748.6 al2/16/15 —$' SOLE REMEDY FOR THE DEFAULTS SET FORTH IN THIS SECTION 3.12. IN PLACING ITS INITIALS AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. DEVELOPER'S INITIALS: CITY'S INITIALS: -(Y�- LD6 3.131 Tax Credit Regulatory Agreement. Notwithstanding anything contained in this Agreement to the contrary, if and when the Site is subject to the requirements of the Tax Credit Program and there is a conflict between the requirements of the Tax Credit Program and the provisions set forth in this Agreement, then the provisions of the Tax Credit Program shall prevail. That notwithstanding, the fact that this Agreement and the Tax Credit Program provide for greater, lesser or different obligations or requirements shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 3.14 Inapplicability until the commencement of the Term. Notwithstanding anything to the contrary contained herein, Developer shall not be bound by the requirements of this Section 3.0 until the commencement of the Term. 4.0 MAINTENANCE. 4.1 Maintenance Obligation. Developer agrees to and shall maintain all interior and exterior improvements, including landscaping, on the Site in a first class condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all of the permits and approvals for the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Developer shall make all repairs and replacements necessary to keep the improvements in good condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials. In the event that Developer breaches any of the covenants contained in this Section and Developer does not commence to cure such breach within thirty (30) calendar days after written notice from City, and after commencing the cure to diligently prosecute such cure to completion, then City, in addition to whatever other remedy it may have at law or in equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by City and/or costs of such cure which amount shall be promptly paid by Developer to City upon demand. 882/036753-0123 2765748.6 x12/16/15 -9- 4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty (30) calendar days after Developer's receipt of notice thereof, or if Developer fails to timely pay other sums required to be paid to City under this Agreement when due (after notice and an opportunity to cure, as set forth in Section 10 or Section 11 (as applicable)), the same shall be deemed delinquent. Any and all delinquent amounts, together with reasonable attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of Developer, and the rents, issues and profits of such property. City may bring an action at law against Developer to pay any such sums or foreclose the lien against Developer's property interests. Any such lien may be enforced by sale by the City following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et seg., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. No lien recorded by City pursuant to this Section 4.2 shall defeat or render invalid the lien of any senior mortgage or deed of trust. 5.0 MANAGEMENT 5.1 Gross Mismanagement: Requirement to Replace Property Manager. In the event of "Gross Mismanagement" (as that term is defined below) of the Project, City shall have the authority to require that such Gross Mismanagement cease immediately, and further to require the immediate replacement of the property manager. City shall provide written notice to Developer of the event(s) of Gross Mismanagement occurring and Developer shall have five (5) calendar days after receipt of such notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified in the City's notice and to notify the City Manager of the steps taken to effect such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a manner which materially violates the terms and/or intention of this Agreement to operate an affordable rental housing complex of the highest standard, and shall include, but is not limited to, the following: 5.1.1 During the Term, knowingly leasing a Unit to an ineligible tenant or tenants whose income exceeds the prescribed levels; 5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels of two (2) persons per bedroom without taking immediate steps to stop such overcrowding; 5.1.3 During the Term, knowingly allowing a tenant to sublease his or her Unit at a rent that exceeds an Affordable Rent; 5.1.4 Failing to timely maintain the Project and the Site in the manner required by this Agreement or failing to submit complete reports; 5.1.5 Failing to timely submit the reports as required by this Agreement; 5.1.6 Fraud in connection with any document or representation relating to this Agreement or embezzlement of Project monies; 882/036753-0123 2765748.6 a12/16/15 —10' 5.1.7 Failing to timely evict any tenant who has materially violated the terms of his or her lease or any other rules or regulations of the Property; and 5.1.9 Failing to fully cooperate with law enforcement in its attempts to maintain a crime -free environment on the Site. 5.2 Qualified Manager. For the extent of the entire Term of this agreement the Property shall be under management of a "Qualified Manager". For the purposes of this Agreement, the term "Qualified Manager" shall mean an experienced property management company with a reputation for honesty and integrity and who has not less than ten (10) years' experience in the operation and management of first-class quality residential properties, and has the financial ability to perform its obligations under a conventional management agreement. 5.3 Operation by the Qualified Manager. The Qualified Manager shall continuously (except for reasonable interruption during repairs, maintenance or renovations and during any delay caused by an event of Force Majeure) during the Term, diligently operate, or cause to be operated, the Project in a first-class manner and as otherwise required by this Agreement. Qualified Manager shall stock adequate working capital, operating equipment, and supplies. 5.4 Management. Developer agrees that at all times during the Term, the Property shall be managed and operated by Qualified Manager. It shall not be deemed a default by Developer under this Agreement if at any time during the Term is shall be determined that the then manager of the Property is not a Qualified Manager so long as the applicable management agreement or contract shall give the Developer the right to terminate said agreement and Developer shall promptly take all reasonable steps to terminate said agreement and secure a Qualified Manager. 5.5 Capital Replacement Reserve. Developer shall, or shall cause the Property Manager to, annually set aside an amount reasonably determined by Developer, or such increased amount required by CTCAC into a capital replacement reserve account (the "Capital Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used for Capital Improvements. As Capital Improvements become necessary, the Capital Replacement Reserve shall be the first source of payment therefor. The non-availability of funds in the Capital Replacement Reserve does not in any manner relieve Developer of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Site in the manner prescribed in this Agreement. 6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS. 6.1 Compliance With Laws. Developer shall comply with (i) all ordinances, regulations and standards of the City, any regional governmental entity, the State of California, and the federal government applicable to the Site; (ii) all rules and regulations of any assessment district of the City with jurisdiction over the Site; and (iii) all applicable labor standards of California law and federal law; and (iv) the requirements of California law and federal law with respect to the employment of undocumented workers or illegal aliens. 882/036753-0123 2765748.6 al2/16/15 -11- 6.2 Indemnity. Developer shall save, protect, defend, indemnify and hold harmless City and the City, in its own capacity, and all of the City's officers, officials, members, employees, agents, and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by any of the Indemnified Parties by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (i) Developer's placement on or under the Site of any Hazardous Materials or Hazardous Materials Contamination, (ii) the escape, seepage, leakage, spillage, discharge, emission or release from the Site occurring on or after the Effective Date of any Hazardous Materials or Hazardous Materials Contamination, or (iii) any Liabilities incurred under any Governmental Requirements relating to the acts described in the foregoing clauses (i) and (ii). For the purposes of this Agreement, unless the context otherwise specifies or requires, the following terns shall have the meanings herein specified: The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the City of Newport Beach, the County of Orange, the State of California, a 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 biphenyls, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. § 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903) or (xi) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seg. 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 emanating from the Site. 882/036753-0123 2765748.6 al 2/16/15 -12- 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 of California, the County of Orange, the City of Newport Beach, 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 the Site. 6.3 Duty to Prevent Hazardous Material Contamination. Developer shall take commercially reasonable action 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, Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Orange County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 6.4 Obligation of Developer to Remediate Premises. Notwithstanding the obligation of Developer to indemnify the Indemnified Parties pursuant to Section 6.2, Developer 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 to make full economic use of the Site for the purposes contemplated by this Agreement and the AHA, which requirements or necessity arise from the presence upon, about or beneath the Site of any Hazardous Materials or Hazardous Materials Contamination. 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. 6.5 Environmental Inquiries. Developer, when it has received any notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when Developer is required to report to any governmental agency any violation or potential violation of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials Contamination, shall concurrently notify the City Manager and provide to him/her a copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries relating to the Site, the 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 Developer shall report to the City Manager, as soon as possible after each incident, any unusual, potentially important incidents. In the event of a responsible release of any Hazardous Materials into the environment, Developer shall, as soon as possible after it becomes aware of the release, furnish to the City Manager a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of the City Manager, Developer shall furnish to the City Manager 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. 882/036753-0123 2765748.6 al2/16/15 -13- 7.0 INSURANCE. Developer, for the term of this Agreement, shall procure and keep in full force and effect or cause to be procured and kept in full force and effect for the mutual benefit of Developer and City, insurance policies reasonably determined by City and commensurate with industry standards for the area., that are attached hereto and incorporated herein by reference as Exhibit "D." 8.0 OBLIGATION TO REPAIR. 8.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. Subject to Section 8.3 below, if the Project shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Developer, Developer shall, subject to the rights of any senior lenders, 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 Project to substantially the same condition in which the Project is required to be maintained pursuant to this Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Developer shall complete the same as soon as possible thereafter so that the Project can continue to be operated and occupied as an affordable housing project in accordance with this Agreement. Subject to extensions of time for "Enforced Delay" events (as defined in Section 22 of this Agreement) occurring after the casualty event, in no event shall the repair, replacement, or restoration period exceed eighteen (18) months from the date Developer obtains insurance proceeds, unless the City Manager, in his reasonable discretion, approves a longer period of time. City shall cooperate with Developer, at no expense to City, in obtaining any governmental permits required for the repair, replacement, or restoration and, upon issuance of such permits City shall promptly release control of any insurance proceeds within City's control. If Developer fails to obtain insurance as required by this Agreement Developer shall be obligated to reconstruct and repair any partial or total damage to the Project and improvements located on the site in accordance with this Section 8.1. 8.2 Continued Operations. During any period of repair, Developer shall continue, or cause the continuation of, the operation of the apartment complex on the Site to the extent reasonably practicable from the standpoint of prudent business management. 8.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. Subject to the rights of any senior lender, if the improvements comprising the Project are completely destroyed or substantially damaged by a casualty for which Developer has not insured against, then Developer 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) calendar days after such substantial damage or destruction. In such event, (i) Developer shall remove all debris from the Site; (ii) this Agreement shall automatically terminate and City shall cooperate to remove it from title; and (iii) the City, at its option, may compel the Developer to sell the Project pursuant to the terms of the City Deed of Trust subject to the rights of any senior lien holders and recover any amounts provided under this Agreement. Alternatively, City may repair the improvements comprising the Project and recover the costs of said improvements from Developer. As used in this Section 8.3, 882/036753-0123 2765748.6 at 2/16/15 -14- "substantial damage" shall mean damage or destruction which is fifty percent (50%) or more of the replacement cost of the improvements comprising the Project. In the event Developer does not timely elect not to repair, replace, or restore the improvements as set forth in the first sentence of this Section 8.3, Developer shall be conclusively deemed to have waived its right not to repair, replace, or restore the improvements and thereafter Developer shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed improvements in accordance with Section 8.1 above and continue operation of the apartment complex during the period of repair (if practicable) in accordance with Section 8.2 above. 9.0 LIMITATION ON TRANSFERS. The qualifications and identity of the Developer are of particular interest to the City. It is because of these qualifications and identity that the City has entered into the AHA and this Agreement with the Developer. Consequently, no person, whether a voluntary or involuntary successor of Developer, shall acquire any rights or powers under this Agreement nor shall the Developer assign all or any part of this Agreement or the Site without the prior written approval of the City. A voluntary or involuntary sale or transfer of a controlling interest in the Developer or the Site during the term of this Agreement shall be deemed to constitute an assignment or transfer for the purposes of this Article 9.0, and the written approval of the City shall be required prior to effecting such an assignment or transfer. Furthermore, any transaction by which Developer undergoes a merger or other reorganization, including a sale of all or substantially all of its assets, wherein Developer is not the surviving corporation (or the stock holders of Developer immediately before the merger or reorganization do not retain control of the surviving corporation) shall be deemed, for purposes of the foregoing, a transfer of this Agreement. If Developer is or becomes a publicly traded entity, any sale or other transfer of any outstanding stock of, or limited partnership interests in. Developer shall not be deemed an assignment within the meaning of this Article 9.0 unless said sale or other transfer is made by a person or entity owning a controlling interest in Developer and results in a change in the person(s) or entity(ies) having control of Developer. Any purported transfer, voluntarily or by operation of law, except with the prior written consent of the City, shall be null and void. During the tern of this Agreement the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights or duties herein, nor make any total or partial sale, transfer, conveyance, or assignment of the whole or any part of the Site or any of the improvements thereon, without the prior written approval of the City. The consent by City to any transfer, conveyance, or assignment shall not constitute a waiver of the necessity for such consent to any subsequent transfer, conveyance, or assignment. This prohibition against assigning shall be construed to include a prohibition against any sale, hypothecation, transfer of possession, or any assignment or subleasing by operation of law or otherwise. City shall be deemed to be reasonable in not granting its consent if the proposed purchaser, transferee, or assignee fails to meet all of the following criteria: a. the proposed purchaser, transferee, or assignee, or, if the proposed purchaser, transferee, or assignee is a wholly owned subsidiary, its parent, or the constituent general partners of the proposed purchaser, transferee, or assignee shall have a net worth at least equal to the greater of (i) Ten Million Dollars ($10,000,000.00) (increased each five (5) years from the Commencement Date by the percentage of any increase over such period in the Consumer Price Index for All Urban Consumers, Los Angeles -Riverside -Orange County, CA, All Items, published by the Bureau of Labor Statistics, Department of Labor), or (ii) ten percent (10%) of 882/036753-0123 2765748.6 al2/16/15 -15- the fair market value of the Project. The successor or most nearly comparable index published by some other brand or department of the United States Government shall be used if said Bureau shall cease to publish the Consumer Price Index. For purposes of determining the fair market value of the Project, such value shall be conclusively determined by the purchase price to be paid by the proposed purchaser, transferee, or assignee; b. the proposed purchaser, transferee, or assignee shall either be a Qualified Manager or, if the proposed purchaser, transferee, or assignee is not a Qualified Manager, shall have entered into a binding agreement with a Qualified Manager, to manage the Project, it being acknowledged herein that continued management of the Project by a Qualified Manager is an affirmative obligation of Developer hereunder; and C. the proposed purchaser, transferee, or assignee (or, with respect to a transfer of a Controlling interest under Article 9.0, the person or entity acquiring such Controlling interest) shall have a reputation for honesty, integrity and sound business practices. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or transfer of the Site, or any interest therein, shall not be required in connection with: a. the conveyance or dedication of any portion of the Site to the City, or other appropriate governmental agency, including public utilities, where the granting of such conveyance or easement permits or facilitates the development of the Project on the Site; or b. any assignment of this Agreement or transfer of the Site, or any of the improvements located thereon, to an entity owned and controlled by Developer or the principals of Developer, including without limitation a limited partnership in which the Developer or an Affiliate of the Developer is a general partner; C. any assignment of the limited partner interests in Developer to an entity owned and controlled by Developer; d. any mortgage, deed of trust, sale and leaseback, or other form of conveyance required for any reasonable method of financing or refinancing the development of the Project on the Site that is contemplated in the Project Budget attached to the AHA or has otherwise been approved by the City Manager, including all direct and indirect costs related thereto; e. transfers resulting from the death or mental or physical incapacity of an individual; f. transfers in trust for the benefit of a spouse, children, grandchildren, or other family member, or for charitable purposes; g. transfers of less than a controlling interest of stock in a publicly -held corporation or of the beneficial interest in any publicly -held partnership or real estate investment trust; 882/036753-0123 2765748.6.12/16/15 -16- h. the admissions of the Qualified Tax Credit Investor to Developer or to a limited partnership in which the Developer or an Affiliate of the Developer is a general partner as a limited partner thereof; i. the transfer by the Qualified Tax Credit Investor to an entity that is an affiliate of the Qualified Tax Credit Investor; and j. the removal by the Qualified Tax Credit Investor of the general partner for a default under the partnership agreement, provided the replacement general partner is reasonably satisfactory to City. Notwithstanding anything in this Section 1.5 to the contrary, any transfer or assignment by Developer or any successor in interest to Developer not requiring the approval by City shall be effective when made but shall not be deemed to relieve Developer or any successor party from its obligations under this Agreement unless and until the transferor and transferee execute and deliver to City, and City acknowledges in writing, an assignment and assumption agreement. Any transfer or assignment by Developer or any successor in interest to Developer requiring the approval by City pursuant to this Section 1.5 shall be effective and shall be deemed to relieve Developer or any successor party from its obligations under this Agreement only upon execution and delivery to the City by the transferor and transferee of an assignment and assumption agreement in a form and with content reasonably acceptable to City. This Article 9.0 shall not be applicable to the leasing of individual Units to Eligible Tenants in accordance with this Agreement, and no assignment and assumption agreement shall be required in connection therewith. 10.0 EVENTS OF DEFAULT BY DEVELOPER. Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one or more of any of the following events shall constitute an "Event of Default' by Developer hereunder if Developer shall have not cured, corrected, or remedied such failure within, unless a shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty (30) calendar days following the service on Developer of a written notice from City specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) calendar day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Developer has commenced to cure within the same thirty (30) day period and has diligently prosecuted such cure to completion: 10.1 Developer shall abandon or surrender the Site; or 10.2 Developer is in default of the City Note and has not cured such default within the cure period applicable to such default as set forth in the City Note; or 10.3 Developer is in default of any of the covenants, terms or provisions of this Agreement or any of the City Agreements; or 882/036753-0123 2765748.6 al2/16/15 -17- 10.4 Developer voluntarily files or has involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same has not been dismissed within sixty (60) calendar days thereafter; or 10.5 Developer is adjudicated a bankrupt; or 10.6 Developer makes a general assignment for the benefit of creditors in violation of the terms of this Agreement or any of the City Agreements. 10.7 Developer is in default, beyond any applicable cure period, of any of the following: (i) any senior indebtedness encumbering the Site, (ii) the Tax Credit Regulatory Agreement, and the other party has not waived the default. 10.8 Developer has not maintained insurance as required by Section 7.0 hereof. 109 Developer fails to commence or complete the applicable Scope of Work within the time periods required by the AHA. Notwithstanding anything herein to the contrary, whenever the City shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer of the terms hereunder, the City shall at the same time deliver a copy of such notice or demand to the Qualified Tax Credit Investor, if there is one. The Qualified Tax Credit Investor (insofar as the rights of the City are concerned) shall have the right, at its option, within thirty (30) calendar days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default. Such cure period shall run concurrently with the Developer's cure period described in this Article 10.0. 11.0 REMEDIES OF CITY. In the event Developer defaults in the performance or observance of any covenant, agreement or obligation of Developer pursuant to this Agreement, and if such default remains uncured for a period of thirty (30) calendar days after written notice thereof shall have been given by City (or such lesser period as may apply under Section 4.1), or, in the event said default cannot be cured within said time period, Developer has failed to commence to cure such default within the applicable time period and diligently prosecute said cure to completion, then City may declare an "Event of Default" to have occurred hereunder, and, at its option, may take one or more of the following steps: 11.1 With respect to (i) the physical condition of the Site, or (ii) Developer's Gross Mismanagement of the Project, enter the Site and 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 Developer, which charge shall be due and payable within thirty (30) calendar days after presentation by City of a statement of all or part of said costs, and if such bill is not timely paid then to (A) place a lien on the Site for said amount due plus interest at the maximum legal rate, or (B) foreclose with respect to City's lien on the Site for said amount due plus interest at the maximum legal rate; 882:036753-0123 2765748.6 a12/16/15 '18' 11.2 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; 11.3 Exercise its right to maintain any and all actions or proceedings at law or suits in equity to compel Developer to correct or cause to be corrected said default, or to foreclose as a result thereof, including without limitation exercise of City's rights under the City Deed of Trust; 11.4 Have a receiver appointed to take possession of Developer's interest in the Site, with power in said receiver to administer Developer's interest in the Site, to collect all funds available to Developer in connection with its operation and maintenance of the Site, and to perform all other actions consistent with Developer's obligations under this Agreement as the court deems proper; 11.5 Terminate this Agreement by written notice to Developer and seek repayment of any remaining principal and accrued interest then owing on the City Note; 11.6 With respect to a default for which foreclosure would be an available remedy, exercise the right to foreclose, or, during the period which is five (5) calendar days prior to the foreclosure sale date, exercise the right to purchase the Project from Developer, for a purchase price equal to the appraised value of the Site less (i) the outstanding amount due under any senior indebtedness, (ii) the amount due under the City Note, (iii) any delinquent taxes and assessments owing on the Site, and (iv) any reasonable costs incurred by City to effect the curing of a default and purchase of the Project, including but not limited to escrow fees and attorney's fees. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of its 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 another party. 12.0 NONDISCRIMINATION. Developer 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Developer, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site, or any part thereof. The foregoing covenants shall run with the land. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 882/036753-0123 2765748.6 al2/16/15 -19- i) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." ii) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." iii) In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, its successors and assigns, the City and any successor in interest to the Site, together with any property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. 13.0 COVENANTS TO RUN WITH THE LAND. Developer hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement. City and Developer hereby declare their express intent that all such covenants, reservations, and restrictions shall be deemed covenants running with the land, and 882/036753-0123 2765748.6 a12/16/15 -20- shall pass to and be binding upon the Developer's successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall automatically expire. All covenants established in this Agreement shall, without regard to technical classification or designation, be binding for the benefit of the City, and such covenants shall run in favor of the City for the entire term of this Agreement, without regard to whether the City is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument. City and Developer hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Developer's legal interest in the Site is rendered less valuable thereby. City and Developer further hereby declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended beneficiaries of such covenants, reservations, and restrictions, and by furthering the public purposes for which the City was formed. Developer, in exchange for the City entering into the AHA, hereby agrees to hold, sell, and convey the Site subject to the terms of this Agreement. Developer also grants to the City the right and power to enforce the terms of this Agreement against the Developer and all persons having any right, title or interest in the Site or any part thereof, their heirs, successive owners and assigns. The covenants set forth in this Agreement shall remain in effect until the expiration of the Term. 14.0 INDEMNIFICATION. Developer agrees for itself and its successors and assigns to indemnify, defend, and hold harmless the Indemnified/Released Parties from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of any of the Indemnified/Released Party. 15.0 UTILITIES AND TAXES. Developer shall remain fully obligated for the payment of (i) real and personal property taxes and assessments in connection with the Site, and (ii) all charges for all utilities serving the Site for which the tenants of the Units are not responsible. 16.0 NO ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall not be entitled to recover from the other party its attorney's fees and costs, including expert witness 882/036753-0123 2765748.6 a12/16/15 -21- fees, any attorney's fees on any appeal, and all other costs for investigating such action, including the conducting of discovery. 17.0 AMENDMENTS. The Developer and the City agree to mutually consider reasonable requests for amendments to this Agreement which may be made by either of the parties hereto, or lending institutions, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. The City Manager shall have the authority to approve, on behalf of the City, amendments to this Agreement that would not substantially alter the basic business terms or substantially increase the risk or cost to the City. All other amendments shall require the action of the City Council. All amendments, including those authorized to be approved by the City Manager, shall be in writing and shall be signed by authorized representatives of City and Developer. 18.0 NOTICE. Formal notices, demands, and communications between City and Developer shall be sufficiently given if (i) personally delivered, (ii) delivered by a reputable same-day or overnight courier services that provides a receipt showing date and time of delivery, (iii) delivered by United States mail, registered or certified, postage prepaid, return receipt requested, or (iv) delivered by facsimile transmission, provided the original of the faxed communication is delivered within twenty-four (24) hours by one of methods described in clauses (i), (ii), or (iii) of the foregoing. Delivery shall be made to the following addresses: City of Newport Beach To City 100 Civic Center Drive Newport Beach, California 92660 Attn: City Manager With a copy to: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: Community Development Director Newport Veterans Housing LP To Borrower: c/o Community Development Partners 3416 Via Oporto, Suite 301 Newport Beach, CA 92663 Attn: Eric A. Paine With a copy to: Law Offices of Patrick R. Sabelhaus 1006 Fourth Street, Sixth Floor Sacramento, CA 95814 Attn: Stephen A. Strain, Esq. 882/036753-0123 2765748.6 a12/16/15 -22- Notices that are personally delivered, delivered by messenger/courier, or by fax (provided there is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt. Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the addressee thereof or the expiration of forty-eight (48) hours after depositing in the United States Postal System in the manner described in this Section. Such written notices, demands, and communications may be sent in the same manner to such other addresses as a party may from time to time designate by mail. 19.0 NONLIABILITY OF CITY OFFICIALS. No officer, official, member, employee, agent, or representative of the City shall be personally liable to Developer, or any successor in interest to Developer, in the event of any default or breach by City or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement or any of the City Agreements. 20.0 TRANSACTIONS WITH AFFILIATES. Developer shall have the right to enter into contracts with subsidiaries, affiliates and other related entities for the purpose of providing cleaning, maintenance and repair services, insurance policies and other purposes related to the operation of the Site, provided that all such costs and charges are competitive with the costs, charges, rent and other sums which would be paid by or to, as the case may be, an unrelated third party. City acknowledges and agrees that Developer may act as its own general contractor or may engage a third party licensed contractor for the construction of any improvements on the Site and that will be entitled in so doing to earn a commercially reasonable fee. 21.0 SEVERABILITY/WAIVER/INTEGRATION/INTERPRETATION: ENTIRE AGREEMENT. 21.1 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. 21.2 Waiver. All waivers of the provisions of this Agreement, unless specified otherwise herein, must be in writing and signed by the appropriate authorities of City or Developer, as applicable. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not invalidate this Agreement nor shall it be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 21.3 Integration. This Agreement contains the entire Agreement between the parties concerning the subject matter hereof and neither party relies on any warranty or representation not contained in this Agreement. 882/036753-0123 2765748.6 a12/16/15 -23- 21.4 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. 21.5. Entire Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors -in -interest with respect to all or any part of the subject matter hereof. 22.0 ENFORCED DELAY; EXTENSIONS OF TIME. Performance by a party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of City shall not excuse performance by City unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) calendar days after the sending party has knowledge, or should have obtained knowledge, of the commencement of the cause. Times of performance under this Agreement may also be extended by mutual written agreement by City and Developer. The City Manager shall also have the authority on behalf of City to administratively approve extensions of time. 23,0 GOVERNING LAW. This Agreement shall be governed by the internal laws of the State of California without regard to conflict of law principles. 24.0 NO MERGER. The covenants, terms, and provisions of this Agreement shall not merge with any grant deed or other instrument pertaining to the conveyance of any interest in real property. 25.0 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. [Signatures on Following Page] 882/036753-0123 2765748.6 a12/16/15 -24- IN WITNESS WHEREOF, the City and Developer have executed this Regulatory Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on the date first written hereinabove. Dated: 12015 Dated: ✓-a- le , 2015 Dated: 17� / f T "CITY" CITY OF NEWPORT BEACH, a California municipal corpor tion and arter city By: Edwar . Selich Mayor ATTEST: APPROVED TO FORM: 2015 By: ((.r) Aaron C. Harp 4AM M1wIK City Attorney 882/036753-0123 2765748.6 aIM 6/15 -25- "DEVELOPER" NEWPORT VETERANS HOUSING LP, a California limited partnership By: CDP Newport LLC, a California limited liability Dated: \ Z \ 12015 company Its: Administrative General Partner By: Community Development Partners, a California corporation Its: Sole Managing Member By: Eric Paine Its: CEO By: Mercy House Living Centers, a California nonprofit public benefit corporation Its: Managing General Partner By: \4/z L4KHaynes Its: President 882/036753-0123 2765748.6 a12/16/15 -26- A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or of that document. STATE OF CALIFORNIA ) )ss. COUNTY OF On Decal, bcr 1 xo IS , before me,£i4 c_Po�ia I rm W i ngtr Notary Public, (here insert name and title of theoffices er) personally appeared Eric PuinC who proved to me on the basis of satisfactory evidence to be the person(4 whose name(c)spare subscribed to the within instrument and acknowledged to me that(/she/they executed the same in i ✓her/their authorized capacity(i5A), and that by ti /her/their signatureVon the instrument the person(A, or the entity upon behalf of which the person(p�acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS nly hand and official seal. SignatureJ:� !Ye — A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or of that document. STATE OF CALIFORNIA ) )ss. COUNTY OF TIM INIRRER tiomnYaion i 2099074 Z mrn• Explm Feb9 2019 On Dr` c_ 11_, . 2 u 1 S before me, jC iV tV r r r2 1\Ivty Notary Public, (here insert name and title of the officer) personally appeared D. S E �- t c H who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/shG4h@5 executed the same in his/herAhcir authorized capacity(ies), and that by his/herAheil signature(s) on the instrument the person(s3, or the entity upon behalf of which the persons) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my han and official seal. Signature 882/03675M123 2765748.6 al2/16/15 -27- (seal) JENNIFER ANN MUWEY COmm15a10n # 2045022 Z "� Notary Public • California Orange County My Comm Expinut Oct 12 2017 1p ' ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or -validity of that document. State of California County of Orange On Oecaa ber 1$, 2,015 before me, Tim Winger, Notary Public (insert name and title of the officer) personally appeared 1mr-P q itagnC.S who proved to me on the ba§is of satisfactory evidence to be the person(.51 whose name(j( /are subscribed to the within instrument and acknowled ed to me that 'she/they executed the same in i&her/their authorized capacity(iA, and that by&her/their signature(4on the instrument the person(A, or the entity upon behalf of which the person(! j acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. TIM bn *20YYI# 20 WITNESS my hand and official seal. COIN 810 Y-CNMwma Qru p CW* Comm. lZral FM 6 2019 Signature (Seal) T EXHIBIT "A" LEGAL DESCRIPTION OF SITE All that certain real property situated in the County of Orange, State of California, commonly known as 6001 Coast Boulevard and described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 al2/08/15 -27- EXHIBIT `B" LEASE RIDER [See following page] 882/036753-0123 2765748.6 a12/08/15 -28- COMMUNITY DEVELOPMENT PARTNERS AFFORDABLE HOUSING PROJECT Lease Rider RESIDENT: (if there is more than one adult occupant, each person must sign the rider) LEASE DATE: UNIT NO.: The undersigned tenant(s) hereby certify and agree as follows: 1. Income Certification. The attached income certification is true, correct and complete. I/we agree to provide a similar certification annually upon request during the term of my occupancy. 2. Employer Verification. The landlord or property manager has my permission to verify my/our income from any sources of income Uwe receive. 3. False Statements. If the income certification and/or lease application submitted by me/us is false, or if Uwe fail to provide annual certifications, the landlord or property manager will have the right to terminate my/our lease and recover possession of my/our unit. Uwe understand that the landlord and property manager are relying on this income certification and the related third -party income and asset verifications in accepting me/us as a tenant, and the landlord or property manager will be seriously harmed if my/our income does not qualify the unit for the affordable housing program. 4. This rider shall be considered as part of my/our lease. Date: Tenant Tenant Tenant Tenant 882/036753-0123 2765748.6 al2/08/15 —1- TENANT INCOME CERTIFICATION ❑ Initial Certification ❑ Recertification ❑ Other Effective Date: Move -In Date: (mm-nn_vvvvi PART I- DEVELOPMENT DATA Property Name: County: TCAC# CA- BIN #: Address: Unit Number: # Bedrooms: Square Footage: PART II. HOUSEHOLD COMPOSITION Cl Vacant (Check if unit was vacant on December 31 of the Effective Date Year) HH Mbr # Last Name First Name Middle Initial Relationship to Head of Household Date of Birth (MM/DD/YYYY) F/T Student (Y or N) Last 4 digits of Social Security # 1 HEAD 2 3 4 5 6 7 PART III. GROSS ANNUAL INCOME (USE ANNUAL AMOUNTS) HH (A) Mbr # Employment or Wages (B) (C) Soc. Security/Pensions Public Assistance (D) Other Income TOTALS $ $ $ $ Add totals from (A) through (D), above TOTAL INCOME (E): $ PART W. INCOME FROM ASSETS HH (F) (G) (H) Mbr # Type of Asset C/I Cash Value of Asset (I) Annual Income from Asset TOTALS: $ Enter Column (H) Total Passbook Rate If over $5000 $ X 0.06% _ (J) Imputed Income Enter the greater of the total of column I, or J: imputed income TOTAL INCOME FROM ASSETS (I{) $ $ $ (L) Total Annual Household Income from all Sources [Add (E) + (K)] F HOUSEHOLD CERTIFICATION & SIGNATURES The information on this form will be used to determine maximum income eligibility. Vwe have provided for each person(s) set forth in Part 11 acceptable verification of current anticipated annual income. Vwe agree to notify the landlord immediately upon any member of the household moving out of the unit or any new member moving in. Vwe agree to notify the landlord immediately upon any member becoming a full time student. Under penalties of perjury, Vwe certify that the information presented in this Certification is true and accurate to the best of my/our knowledge and belief The undersigned further understands that providing false representations herein constitutes an act of fraud. False, misleading or incomplete information may result in the termination of the lease agreement. Signature (Date) Signature (Date) Signature (Date) (Date) TOTAL ANNUAL HOUSEHOLD INCOME FROM ALL SOURCES: From item (L) on page t $ Current Federal LIHTC Income Limit per Family Size: $ Household Income as of Move -in: $ OF INCOME ELIGIBILITY Unit Meets Federal Income Restriction at: ❑ 60% ❑ 50% Unit Meets Deeper Targeting Income Restriction at: ❑ Other % RECERTIFICATION ONLY: Current Federal LIHTC Income Limit x 140%: Household Income exceeds 140% at recertification: []Yes ❑No Household Size at Move -in: PART VIII. PROGRAM TYPE Mark the program(s) listed below (a. through e.) for which this household's unit will be counted toward the property's occupancy requirements. Under each program marked, indicate the household's income status as established by this certification/recertification. a. Tax Credit ❑ b. HOME ❑ c. Tax Exempt ❑ d. AHDP ❑ e. ❑ (Name ofPragram) See Part V above. Income Status Income Status Income Status ❑ 550%AMGI ❑ 50%AMGI ❑ 50%AMGI Income Status ❑ <_60%AMGI ❑ 60%AMGI ❑ 80%AMGI ❑ ❑ 580%AMGI ❑ 80%AMGI ❑ OI** ❑ OI** ❑ OI** ❑ OI** "Upon recertification, household was determined over -income Oq according to eligibility requirements of the program(s)) marked above. SIGNATURE OF OWNER/REPRESENTATIVE Based on the representations herein and upon the proof and documentation required to be submitted, the individuals) named in Part II of this Tenant Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction Agreement (if applicable), to live in a unit in this Project. SIGNATURE OF OWNER/REPRESENTATIVE DATE Tenant Income Certification (January 2015) PART VI. RENT Tenant Paid Monthly Rent: $ Federal Rent Assistance: $_ *Source: Monthly Utility Allowance: $ Non-Fedeml Rent Assistance: $ (*0-8) Other Monthly Non -optional charges: $ Total Monthly Rent Assistance: $ GROSS MONTHLY RENT FOR UNIT: *Source of Federal Assistance (Tenant paid rent plus Utility Allowance & 1 **HUD Multi -Family Project Based Rental Assistance (PBRA) other non -optional charges) S 2 Section 8 Moderate Rehabilitation 3 Public Housing Operating Subsidy Maximum Federal LIHTC Rent Limit for 4 HOME Rental Assistance this unit: $ 5 HUD Housing Choice Voucher (HCV), tenant -based 6 HUD Project -Based Voucher (PBV) Unit Meets Federal Rent Restriction at: 1160% ❑ 50% 7 USDA Section 521 Rental Assistance Program 8 Other Federal Rental Assistance 0 Missing Unit Meets Deeper Targeting Rent Restriction at: ❑ Other: % ** (PBRA) includes: Section 8 New Construction/Substantial Rehabilitation; Section 8 Loan Management; Section 8 Property Disposition; Section 202 Project Rental Assistance Contracts (PRAC) PART VII. STUDENT STATUS *Student Explanation: ARE ALL OCCUPANTS FULL TIME STUDENTS? If yes, Enter student explanation* 1 AFDC / TANF Assistance (also attach documentation) 2 Job Training Program ❑ yes ❑ no 3 Single Parent/Dependem Child 4 Married/Joint Return Enter 5 Former Foster Care 1-5 PART VIII. PROGRAM TYPE Mark the program(s) listed below (a. through e.) for which this household's unit will be counted toward the property's occupancy requirements. Under each program marked, indicate the household's income status as established by this certification/recertification. a. Tax Credit ❑ b. HOME ❑ c. Tax Exempt ❑ d. AHDP ❑ e. ❑ (Name ofPragram) See Part V above. Income Status Income Status Income Status ❑ 550%AMGI ❑ 50%AMGI ❑ 50%AMGI Income Status ❑ <_60%AMGI ❑ 60%AMGI ❑ 80%AMGI ❑ ❑ 580%AMGI ❑ 80%AMGI ❑ OI** ❑ OI** ❑ OI** ❑ OI** "Upon recertification, household was determined over -income Oq according to eligibility requirements of the program(s)) marked above. SIGNATURE OF OWNER/REPRESENTATIVE Based on the representations herein and upon the proof and documentation required to be submitted, the individuals) named in Part II of this Tenant Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction Agreement (if applicable), to live in a unit in this Project. SIGNATURE OF OWNER/REPRESENTATIVE DATE Tenant Income Certification (January 2015) PARTLY. SUPPLEMENTAL INFORMATION FORM The California Tax Credit Allocation Committee (CTCAC) requests the following information in order to comply with the Housing and Economic Recovery Act (HERA) of 2008, which requires all Low Income Housing Tax Credit (LIHTC) properties to collect and submit to the U.S. Department of Housing and Urban Development (HUD), certain demographic and economic information on tenants residing in LIHTC financed properties. Although the CTCAC would appreciate receiving this information, you may choose not to furnish it. You will not be discriminated against on the basis of this information, or on whether or not you choose to furnish it. If you do not wish to furnish this information, please check the box at the bottom of the page and initial. Enter both Ethnicity and Race codes for each household member (see below for codes). TENANT DEMOGRAPHIC PROFILE HH Mbr# Last Name First Name Middle Initial Race Ethnicity Disabled 1 2 3 4 5 6 7 The Following Race Codes should be used: I — White — A person having origins in any of the original people of Europe, the Middle East or North Africa. 2 — Black/African American —A person having origins in any of the black racial groups of Africa. Terms such as "Haitian" or "Negro" apply to this category. 3 — American Indian/Alaska Native — A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment. 4— Asian —A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam. 5—Native Hawaiian/Other Pacific Islander— A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands. 6 —Other 7 — Did not respond. (Please Initial below) Note: Multiple racial categories may be indicated as such: 31—American Indian/Alaska Native & White, 41 — Asian & White, etc The Following Ethnicity Codes should be used: 1— Hispanic — A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. Terms such as "Latino" or "Spanish Origin" apply to this category. 2 — Not Hispanic — A person not of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. 3 — Did not respond. (Please initial below) Disability Status: 1—Yes If any member of the household is disabled according to Fair Housing Act definition for handicap (disability): • A physical or mental impairment which substantially limits one or more major life activities; a record of such an impairment or being regarded as having such an impairment. For a definition of "physical or mental impainnent" and other terms used, please see 24 CFR 100.201, available at htt ://www.fairhousin .com/index.cfm?method— a e.dis la & a elD=465 . • "Handicap" does not include current, illegal use of or addiction to a controlled substance. • An individual shall not be considered to have a handicap solely because that individual is a transvestite. 2—No 3 — Did not respond (Please initial below) ❑ Resident/Applicant: I do not wish to furnish information regarding ethnicity, race and other household composition. (Initials) (HH#) 1. 2. 3. 4. 5. 6. 7. Tenant Income Certification (January 2015) INSTRUCTIONS FOR COMPLETING TENANT INCOME CERTIFICATION This form is to be completed by the owner or an authorized representative. Part I - Development Data Enter the type of tenant certification: Initial Certification (move -in), Recertification (annual recertification), or Other. If other, designate the purpose of the recertification (i.e., a unit transfer, a change in household composition, or other state -required recertification). Effective Date Enter the effective date of the certification. For move -in, this should be the move -in date. Spouse U Unborn Child/Anticipated For annual income recertification's, this effective date should be no later than one year 0 from the effective date of the previous (re)certification. Move -In Date Enter the most recent date the household tax credit qualified. This could be the move -in Foster child(ren)/adult(s) date or in an acquisition rehab property, this is not the date the tenant moved into the N unit, itis the most recent date the management company income qualified the unit for tax credit purposes. Property Name Enter the name of the development. County Enter the county (or equivalent) in which the building is located. TCAC# Enter the project number assigned to the property by TCAC. Please include hyphens between the state abbreviation, four digit allocating year, and project specific number. For example: CA -2010-123 BIN # Enter the building number assigned to the building (from IRS Form 8609). Address Enter the physical address of the building, including street number and name, city, state, and zip code. Unit Number Enter the unit number. # Bedrooms Enter the number of bedrooms in the unit. Square Footage Enter the square footage for the entire unit. Vacant Unit Check if unit was vacant on December 31 of requesting year. For example, for the collection of 2011 data, this would refer to December 31, 2011. Part II - Household Composition List all occupants of the unit. State each household member's relationship to the head of household by using one of the following definitions: H Head of Household S Spouse U Unborn Child/Anticipated A Adult Co -Tenant 0 Other Family Member Adoption or Foster C Child F Foster child(ren)/adult(s) L Live-in Caretaker N None of the above Date of Birth Enter each household member's date of birth. Student Status Enter "Yes" if the household member is a full-time student or "NO" if the household member is not a full-time student. Last Four Digits of Social Security For each tenant 15 years of age or older, enter the last four digits of the social security Number number or the last four digits of the alien registration number. If the last four digits of SSN or alien registration is missing, enter 0000. For tenants under age 15, social security number not required, although please enter 0000. If there are more than 7 occupants,use an additional sheet of paper to list the remaining household members and attach it to the certification. Tenant Income Certification (January 2015) Part IH - Annual Income See HUD Handbook 4350.3 for complete instructions on verifying and calculating income, including acceptable forms of verification. From the third party verification forms obtained from each income source, enter the gross amount anticipated to be received for the twelve months from the effective date of the (re)oertificafion. Complete a separate line for each income -earning member. List each respective household member number from Part II. Include anticipated income only if documentation exists verifying pending employment. If any adult states zero -income, please note "zero' in the columns of Part III. Column (A) Enter the annual amount of wages, salaries, tips, commissions, bonuses, and other income from employment; distributed profits and/or net income from a business. Column (B) Enter the annual amount of Social Security, Supplemental Security Income, pensions, military retirement, etc. Column (C) Enter the annual amount of income received from public assistance (i.e., TANF, general assistance, disability, etc.). Column (D) Enter the annual amount of alimony, child support, unemployment benefits, or any other income regularly received by the household. Row (E) Add the totals from columns (A) through (D), above. Enter this amount. Part IV - Income from Assets See HUD Handbook 4350-3 for complete instructions on verifying and calculating income from assets, including acceptable forms of verification. From the third party verification forms obtained from each asset source, list the gross amount anticipated to be received during the twelve months from the effective date of the certification. If individual household member income is provided, list the respective household member number from Part II and complete a separate line for each member. Column (F) List the type of asset (i.e., checking account, savings account, etc.) Column (0) Enter C (for current, if the family currently owns or holds the asset), or I (for imputed, if the family has disposed of the asset for less than fair market value within two years of the effective date of (re)certification). Column (H) Enter the cash value of the respective asset. Column (I) Eater the anticipated annual income from the asset (i.e, savings account balance multiplied by the annual interest rate). TOTALS Add the total of Column (H) and Column (I), respectively. If the total in Column (H) is greater than $5,000, you must do an imputed calculation of asset income. Enter the Total Cash Value, multiply by 0.06% and enter the amount in (J), Imputed Income. Row (K) Enter thegreater ojthe total in Column (I) or (J) Row (L) Total Annual Household Income From all Sources Add (E) and (K) and enter the total HOUSEHOLD CERTIFICATION AND SIGNATURES After all verifications of income and/or assets have been received and calculated, each household member age 18 or older must sign and date the Tenant Income Certification. For move -in, it is recommended that the Tenant Income Certification be signed no earlier than 5 days prior to the effective date of the certification. Part V — Determination of Income Eligibility Total Annual Household Income from Enter the number from item (L). all Sources Current LIHTC Income Limit per Enter the Current Move -in Income Limit for the household size — specifically, the max Family Size income limit for the federal 50% or 60% set aside. Household Income at Move -in For recertifrcations only. Enter the household income from the move -in certification Tenant Income Certification (January 2015) Household Size at Move -in Enter the number of household members from the move -in certification. Current Federal LIHTC Income Limit x For recertifications only. Multiply the current LIHTC Maximum Move -in Income Limit by 140% 140% and enter the total. 140% is based on the Federal Set -Aside of 20/50 or 40/60, as elected by the owner for the property, not deeper targeting elections of 30%, 40%, 45%, 50%, etc. Below, indicate whether the household income exceeds that total. If the Gross Annual Income at recertification is greater than 140% of the LIHTC Income Limit per Family Size at Move -in date (above), then the available unit rale must be followed. Unit Meets Federal Income Restriction Check the appropriate box for the income restriction that the household meets according to at what is required by the federal set-wide(s) for the project. Unit Meets Deeper Targeting Income If your agency requires an income restriction lower than the federal limit, enter the percent Restriction required. Part VI - Rent Tenant Paid Monthly Rent Enter the amount the tenant pays toward rent (not including rent assistance payments such as Section 8). Federal Rent Assistance Enter the meant of rent assistance received from a federal program, if any. Non -Federal Rent Assistance Enter the amount of non-federal rent assistance received, if any. Total Monthly Rent Assistance Enter the amount of total rent assistance received, if any. Source of Federal Rent Assistance If federal rent assistance is received, indicate the single program source. Monthly Utility Allowance Enter the utility allowance. If the owner pays all utilities, enter zero. Other Monthly Non -Optional Charges Enter the amount of non -optional charges, such as mandatory garage rent, storage lockers, charges for services provided by the development, etc. Gross Monthly Rent for Unit Enter the total of Tenant Paid Rent plus Utility Allowance and other non -optional charges. The total may NOT include amounts other than Tenant Paid Rent, Utility Allowances and other non -optional charges. In accordance with the definition of Gross Rent in IRC §42(g)(2)(B), it may not include any rent assistance amount. Maximum LIHTC. Rent Limit for this Enter the maximum allowable gross rent for the unit. This amount must be the maximum unit amount allowed by the Current Income Limit per Family Size — specifically, the max rent limit for the federal 50% or 60% set aside. Unit Meets Federal Rent Restriction at Indicate the appropriate rent restriction that the unit meets according to what is required by the federal set-aside(s) for the project. Unit Meets Deeper Targeting Rent If your agency requires a rent restriction lower than the federal limit, enter the percent Restriction at required. Part VII - Student Status If all household members are full time* students, check "yes". Full-time status is determined by the school the student attends. If at least one household member is not a full-time student, check "no." If"yes" is checked, the appropriate exemption must be listed in the box to the right. If none of the exemptions apply, the household is ineligible to rent the unit. Part VIII — Program Type Mark the program(s) for which this household's unit will be counted toward the property's occupancy requirements. Under each program marked, indicate the household's income status as established by this certification/recertification. If the property does not participate in the HOME, Tax - Exempt Bond, Affordable Housing Disposition, or other housing program, leave those sections blank. Tax Credit See Part V above. HOME If the property participates in the HOME program and the unit this household will occupy will count towards the HOME program set -asides, mark the appropriate box indicting the household's designation. Tax Exempt If the property participates in the Tax Exempt Bond program; mark the appropriate box indicating the household's designation. Tenant Income Certification (January 2015) AHDP If the property participates in the Affordable Housing Disposition Program (AHDP), and this household's unit will count towards. the set-aside requirements, select the appropriate box to indicate if the household is a VLI, LI or OI (at recertification) household. Other If the property participates in any other affordable housing program, complete the information as appropriate. SIGNATURE OF OWNER/REPRESENTATIVE It is the responsibility of the owner or the owner's representative to sign and date this document immediately following execution by the resident(s). The responsibility of documenting and determining eligibility (including completing and signing the Tenant Income Certification form) and ensuring such documentation is kept in the tenant file is extremely important and should be conducted by someone well trained in tax credit compliance. These instructions should not be considered a complete guide on tax credit compliance. The responsibility for compliance with federal program regulations lies with the owner of the building(s) for which the credit is allowable. PART IX. SUPPLEMENTAL INFORMATION Complete this portion of the form at move -in and at recertification's (only if household composition has changed from the previous year's cerufrcation). Tenant Demographic Profile Complete for each member of the household, including minors. Use codes listed on supplemental form for Race, Ethnicity, and Disability Status. Resident/Applicant Initials All tenants who wish not to famish supplemental information should initial this section. Pment/Gumdian may complete and initial for minor child(ren). Tenant Income Certification (January 2015) EXHIBIT "C" RESTRICTED UNIT MATRIX* Size No. of 30% AMI 40% AMI 50% AMI 60% AMI Units Veteran Senior Senior Veteran Household Household Household Household Unit Unit Unit Unit Onebedroom 12 6 2 3 1 *At all times one (1) unit shall be occupied by an on-site property manager that is also an Eligible Tenant. 882/036753-0123 2765748.6 a12/08/15 -1- EXHIBIT "D" 1. INSURANCE REQUIREMENTS 1.1 Provision of Insurance. Without limiting Developer's indemnification of City, and prior to commencement of Scope of Development under the AHA, Developer shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Developer agrees to provide insurance in accordance with requirements set forth here. If Developer uses existing coverage to comply and that coverage does not meet these requirements, Developer agrees to amend, supplement or endorse the existing coverage. 1.2 Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 1.3 Coverage Requirements. 1.3.1 General Liability Insurance. Developer shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Developer including materials, parts, or equipment fixrnished in connection with such work or operations and automobiles owned, leased, hired, or borrowed by or on behalf of the Developer. General liability coverage can be provided in the form of an endorsement to the Developer's insurance (at least as broad as ISO Form CG 20 10, CG 11 85 or both CG 20 10 and CG 20 37 forms if later revisions used). 1.3.2 Property Insurance. Developer shall maintain property insurance against "all risk" coverage for full replacement cost with no coinsurance penalty. Such coverage shall name the City as a loss payee as their interest may appear. 1.3.3 Builder's Risk Insurance. For contracts with property exposures during construction, Developer shall maintain Builders Risk insurance (Course of Construction) insurance utilizing an "all risk" (Special Perils) coverage form, with limits equal to the completed value of the project and no coinsurance penalty provisions. Developer may submit evidence of Builder's Risk insurance in the form of Course of Construction coverage. Such coverage shall name the City as a loss payee as their interest may appear. At the discretion of City, the requirement for such coverage may include additional protection for Earthquake and/or 882/036753-0123 2765748.6 x12/08115 ' 1' Flood. City shall be included as an insured on such policy, and Developer shall provide the City with a copy of the policy. 1.4 Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: 1.4.1 Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Developer or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Developer hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors. 1.4.2 Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, but not including professional liability (if required), shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. 1.4.3 Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self-insurance maintained by City. 1.4.4 Notice of Cancellation. All policies shall provide City with thirty (30) days' notice of cancellation (except for nonpayment for which ten (10) days' notice is required) or nonrenewal of coverage for each required coverage. 1.5 Additional Agreements Between the Parties. The parties hereby agree to the following: 1.5.1 Evidence of Insurance. Developer shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of development. Current certification of insurance shall be kept on file with City at all times during the term of this contract. City reserves the right to require complete, certified copies of all required insurance policies, at any time. 1.5.2 Enforcement of Contract Provisions. Developer acknowledges and agrees that any actual or alleged failure on the part of the City to inform Developer of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. 1.5.3 Requirements not Limitine. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given 882/036753-0123 2765748.6 al2/08/15 -2- issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. 1.5.4 Self-insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these requirements unless approved by City. 1.5.5 City Remedies for Non Compliance. If Developer or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this agreement, or to suspend Developer's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Developer or reimbursed by Developer upon demand. 1.5.6 Timely Notice of Claims. Developer shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Developer's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. 1.5.7 Maintenance of General Liability Coverage. Developer agrees to maintain commercial general liability coverage for a period of ten (10) years after completion of the project or to obtain coverage for completed operations liability for an equivalent period. 1.5.8 Developer's Insurance. Developer shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work under the Scope of Development as outlined in the AHA. 882/036753-0123 2765748.6 a12/08/15 -3- ATTACHMENT NO. 8 PROJECT BUDGET [SEE FOLLOWING PAGE] 882/036753-0123 2765748.6 a12/08/15 -1- PROJECT FINANCING SUMMARY Project Milestone Date City Council Project Selection Nov -15 Property Acquisition / Bridge Loan Closing 'Dec -15 VH HIP Application Dec -15 V H H P Award Feb -16 LIHTC 9% Application Mar -16 LIHTC9% Award Jun -16 Construction Commence/LP Closing Sep -16 Anticipated Construction Completion Jan -17 Stabilization (Lease -up Complete) Mar -17 Perm Loan Closing (Conversion) Jul -17 8609s Aug -17 Acquisition 3,538,320 Direct Construction Costs 1,109,760 Construction Contingency 110,976 Indirect and Soft Costs 259,211 Developer Fee 386,483 Financing Costs 277,012 Project Reserves 265,607 TOTAL 5,947,369 Tax Credit Equity 2,156,244 1st Mortgage Permanent Debt 1,160,000 City of NB Note 1,975,000 V H H P 600,000 Deferred Developer Fee 56,125 TOTAL 5,947,369 III LI HTC Equity Pricing 1.05 LIHTC Credits to Investor 2,053,566 Construction/Bridge Loan 2,838,658 LIHTC App Tie -Breaker 76.46% TOTAL Units 12 72 73 ATTACHMENT NO.9 PROJECT PRO FORMA [SEE FOLLOWING PAGE] 882/036753-0123 2765748.6 a12/08/15 ' 1' 30 -YEAR CASH FLOW 1 Bed -1 Bath - VASH 6 1,433 2.00% 103,176 105,240 107,344 109,491 111,681 113,915 1 Bed -1 Bath 2 661 2.00% 15,864 16,181 16,505 16,835 17,172 17,515 1 Bed -1 Bath 3 836 2.00% 30,096 30,698 31,312 31,938 32;577 33,228 1 Bed -1 Bath - Non-VASH Vet 1 1,012 2.00% 12,144 12,387 12,635 12,887 13,145 13,408 TOTAL RENTAL INCOME 12 5.57% 3.00% 161,280 164,506 167,796 171,152 174,575 178,066 Other Income 11 10.00 5.70% 2.00% 1,440 1,469 1,498 1,528 1,559 1,590 TOTAL POTENTIAL INCOME $ 975.00 7.57% 3.00% 162,720 165,974 169,294 172,680 176,133 179,656 Less Vacancy Allowance $ (975.00) -7.57% 5.00% (8,136) (8,299) (8,465) (8,634) (8,807) (8,983) GROSS INCOME $4,400 154,584 157,676 160,829 164,046 167,327 170,673 Management Fees (Per Mo) $ 644.10 5.00% 2.00% 7,729 7,884 8,041 8,202 8,366 8,534 Administration $ 589.68 4.58% 3.00% 7,076 7,288 7,507 7,732 7,964 8,203 Payroll $ 797.00 6.19% 3.00% 9,564 9,851 10,146 10,451 10,764 11,087 Maintenance $ 917.94 7.13% 3.00% 11,015 11,346 11,686 12,037 12,398 12,770 Utilities $ 717.00 5.57% 3.00% 8,604 8,862 9,128 9,402 9,684 9,974 Insurance/Tates $ 734.28 5.70% 3.00% 8,811 9,076 9,348 9,628 9,917 10,215 Service Amenities $ 975.00 7.57% 3.00% 11,700 12,051 12,413 12,785 13,168 13,564 Services Reserve / CF Reserve $ (975.00) -7.57% 3.00% (11,700) (12,051) (12,413) (12,785) (13,168) (13,564) TOTAL OPER. EXPENSES $4,400 52,800 54,307 55,857 57,452 59,094 60,783 NET OPERATING INCOME 101,784 103,369 104,972 106,593 108,233 109,890 REPLACEMENT RESERVES $300 3.00% 3,600 3,708 3,819 3,934 4,052 4,173 CASH FLOW FOR DSC 98,184 99,661 101,153 102,660 104,181 105,717 DEBT SERVICE Amount Rate DCR Permanent Loan Hard Debt $1,160,000 5.70% 1.17 84,105 54,105 64,105 84,105 84,105 84,105 VHHP Min Payment $600,000 0.42% N/A 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 11,559 13,035 14,527 16,034 17,555 19,091 MANAGEMENT FEES Amount Iner/yr LP Asst Mgmt Fee $3,000 3.00% 3,000 3,090 3,183 3,278 3,377 3,478 MGP Mgmt Fee $3;000 3.00% 3,000 3,090 3,183 3,278 3,377 3,478 CASH FLOW AFTER FEES 5,559 6,855 8,162 9,478 10,802 12,136 DEFERRED FEE &AGP FEE Amount Iner/yr Deferred Fee Payment $56,125 5,559 6,855 8,162 9,478 10,802 12,136 AGP (Dev) Incentive Fee $3,000 3.00% - - - - - 3,478 CASH FLOW AFTER DDF - - - - - (3,478) CITY OF NB NOTE Amount Rate Year -1 Year -2 Year -3 Year -4 Year -5 Year -6 Surplus Cash Flow Payments $1,975,000 0.0% - - - - - - NETCASHFLOW - - - - (3,478) 16 77 r,•r_T.r_Ta�rr�2lirya�j LP Asst Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 z MGP Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 30 -YEAR CASH FLOW 13,477 14,826 16,183 17,547 18,917 20,293 21,674 23,061 0 ti A RENTAL • 1 N O 1 Bed - 1 Bath - VASH 116,193 118,517 120,887 123,305 125,771 128,286 130,852 133,469 136,139 rn m 1 Bed -1 Bath 17,865 18,223 18,587 18,959 19,338 19,725 20,119 20,522 20,932 0 1 Bed -1 Bath 33,893 34,571 35,262 35,968 36,687 37,421 38,169 38,932 1 39,711 m 1 Bed -1 Bath - Non-VASH Vet 13,676 13,950 14,229 14,513 14,803 15,100 15,402 15,710 z 16,024 1 1 TOTAL RENTAL INCOME 181,627 185,260 188,965 192,745 196,599 200,531 204,542 208,633 212,806 O Other Income 1,622 1,654 1,687 1,721 1,755 1,790 1,826 1,863 T 1,900 A TOTAL POTENTIAL INCOME 183,249 186,914 190,652 194,465 198,355 202,322 206,368 210,496 214,706 3: n Less Vacancy Allowance (9,162) (9,346) (9,533) (9,723) (9,918) (10,116) (10,318) (10,525) (10,735) GROSS INCOME 174,087 177,568 181,120 184,742 188,437 192,206 196,050 199,971 203,970 OPERATING Management Fees (Per Mo) 8,704 8,878 9,056 9,237 9,422 9,610 9,802 9,999 10,199 Administration 8,449 8,703 8,964 9,233 9,510 9,795 10,089 10,392 10,703 Payroll 11,420 11,763 12,115 12,479 12,853 13,239 13,636 14,045 14,466 Maintenance 13,153 13,547 13,954 14,372 14,804 15,248 15,705 16,176 16,662 Utifties 10,274 10,582 10,899 11,226 11,563 11,910 12,267 12,635 13,014 Insurance/Taxes 10,521 10,837 11,162 11,497 11,842 12,197 12,563 12,940 13,328 Service Amenities 13,970 14,390 14,821 15,266 15,724 16,196 16,681 17,182 17,697 Services Reserve / CF Reserve (13,970) (14,390) (14,821) (15,266) (15,724) (16,196) (16,681) (17,182) (17,697) TOTAL OPER. EXPENSES 62,521 64,310 66,150 68,044 69,993 71,999 74,063 76,187 78,372 NET OPERATING INCOME 111,565 113,259 114,969 116,698 118,444 120,207 121,987 123,784 125,598 REPLACEMENT RESERVES 4,299 4,428 4,560 4,697 4,838 4,983 5,133 5,287 5,445 CASH FLOW FOR DSC 107,267 108,831 110,409 112,001 113,606 115,224 116,854 118,498 120,153 DEBT SERVICE Permanent Loan Hard Debt 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 VHHP Min Payment 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 20,641 22,206 23,784 25,375 26,980 28,598 30,229 31,872 33,527 r,•r_T.r_Ta�rr�2lirya�j LP Asst Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 MGP Mgmt Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER FEES 13,477 14,826 16,183 17,547 18,917 20,293 21,674 23,061 24,452 DEFERRED FEE & AGP FEE Deferred Fee Payment 3,133 - - - - - - - - AGP (Dev) Incentive Fee 3,582 3,690 3,800 3,914 4,032 4,153 4,277 4,406 4,538 CASH FLOW AFTER DDF 6,761 11,137 12,383 13,632 14,885 16,140 17,397 18,655 19,914 CITY OF NB NOTE Year -7 Year -8 Year -9 Year -10 Year -11 Year -12 Year -13 Year -14 Year -15 Surplus Cash Flow Payments - - - - - - - - - NETCASHFLOW 6,761 11,137 12,383 13,632 14,885 16,140 17,397 18,655 19,914 30 -YEAR CASH FLOW 1 Bed - i Bath - VASH 6 1,433 1 Bed - 1 Bath 2 661 1 Bed - 1 Bath 3 836 1 Bed - 1 Bath - Non-VASH Vet 1 1,012 2.00% 138,861 141,639 144,471 147,361 150,308 153,314 2.00% 21,351 21,778 22,213 22,658 23,111 23,573 2.00% 40,505 41,315 42,142 42,984 43,844 44,721 2.00% 16,344 16,671 17,005 17,345 17,692 18,045 TOTAL RENTAL INCOME 12 217,062 221,403 225,831 230,348 234,955 239,654 Other Income $ 10.00 2.00% 1,938 1,977 2,016 2,057 2,098 2,140 TOTAL POTENTIAL INCOME 219,000 223,380 227,847 232,404 237,052 241,793 Less Vacancy Allowance 5.00% (10,950) (11,169) (11,392) (11,620) (11,853) (12,090) GROSS INCOME 208,050 212,211 216,455 220,784 225,200 229,704 • • Amount Rate Year -16 Year -17 Year -18 Year -19 Year -20 Year -21 t $1,975,000 0.0% Management Fees (Per Mo) $ 64410 5.00% 2.00% 10,402 10,611 10,823 11,039 11,260 11,485 Administration $ 589.68 4.58% 3.00% 11,024 11,355 11,696 12,047 12,408 12,780 Payroll $ 797.00 6.19% 3.00% 14,900 15,347 15,808 16,282 16,771 17,274 Maintenance $ 917.94 7.13% 3.00% 17,161 17,676 18,207 18,753 19,315 19,895 Utilities $ 717.00 5.57% 3.00% 13,405 13,807 14,221 14,648 15,087 15,540 Insurance/Taxes $ 734.28 5.70% 3.00% 13,728 14,140 14,564 15,001 15,451 15,914 Service Amenities $ 975.00 7.57% 3.00% 18,228 18,775 19,338 19,918 20,516 21,132 Services Reserve / CF Reserve $ (975.00 -7.57% 3.00% - - - - - - TOTAL OPER. EXPENSES $4,400 98,850 101,711 104,656 107,688 110,808 114,020 NET OPERATING INCOME 109,200 110,500 111,799 113,096 114,392 115,684 REPLACEMENT RESERVES $300 3.00% 5,609 5,777 5,950 6,129 6,313 6,502 CASH FLOW FOR DSC 103,591 104,723 105,848 106,968 108,079 109,182 DEBT SERVICE Amount Rate DCR Permanent Loan Hard Debt $1,160,000 5.70% 1.17 84,105 84,105 84,105 84,105 84,105 84,105 VHHP Min Payment $600,000 0.42% N/A 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 19,486 20,617 21,743 22,862 23,974 25,077 MANAGEMENT FEES Amount Incr/yr LP Asst Mgmt Fee $3,000 3.00% 4,674 4,814 4,959 5,107 5,251 5,418 MGP Mgmt Fee $3,000 3.00% 4,674 4,814 4,959 5,107 5,261 5,418 CASH FLOW AFTER FEES 10,138 10,989 11,826 12,647 13,453 14,240 DEFERRED FEE&AGP FEE Amount Iner/yr Deferred Fee Payment $56,125 - - - - - - AGP (Dev) Incentive Fee $3,000 3.00%. 4,674 4,814 4,959 5,107 5,261 5,418 CASH FLOW AFTER DDF 5,464 6,175 6,867 7,540 8,192 8,822 CITY OF NB NOTE Amount Rate Year -16 Year -17 Year -18 Year -19 Year -20 Year -21 Surplus Cash Flow Payments $1,975,000 0.0% 1,366 1,544 1,717 1,885 2,048 2,205 NET CASH FLOW 4,098 4,631 5,151 5,655 6,144 6,616 78 79 30 -YEAR CASH FLOW 1 Bed -1 Bath - VASH 1 Bed -1 Bath 1 Bed -1 Bath 1 Bed - i Bath - Non-VASH Vet 156,380 24,045 45,615 18,406 159,508 24,525 46,528 18,774 162,698 25,016 47,458 19,150 165,952 25,516 48,408 19,533 169,271 26,027 49,376 19,924 172,657 26,547 50,363 20,322 176,110 27,078 51,370 20,728 179,632 27,620 52,398 21,143 183,225 28,172 53,446 21,566 TOTAL RENTAL INCOME 244,447 249,336 254,322 259,409 264,597 269,889 275,287 280,792 286,408 Other Income 2,183 2,226 2,271 2,316 2,362 2,410 2,458 2,507 2,557 TOTAL POTENTIAL INCOME 246,629 251,562 256,593 261,725 266,959 272,299 277,745 283,299 288,965 Less Vacancy Alloerance (12,331) (12,578) (12,830) (13,086) (13,348) (13,615) (13,887) (14,165) (14,448) GROSS INCOME 234,298 238,984 243,763 248,639 253,611 258,684 263,857 269,134 274,517 •• 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 r Management Fees (Per Mo) 11,715 11,949 12,188 12,432 12,681 12,934 13,193 13,457 13,726 Administration - 13,164 13,559 13,965 14,384 14,816 15;260 15,718 16,190 16,675 Payroll 17,792 18,326 18,875 19,442 20,025 20,626 21,244 21,882 22,538 Maintenance 20,492 21106 21,740 22,392 23,064 23,756 24,468 .25,202 25,958 Utilities 16,006 16,486 16,981 17,490 18,015 18,555 19,112 19,685 20,276 Insurance/Taxes 16,392 16,883 17,390 17,912 18,449 19,002 19,573 20,160 20,765 Service Amenities 21,765 22,418 23,091 23,784 24,497 25,232 25,989 26,769 27,572 Services Reserve / CF Reserve - - - - - - - - - TOTAL OPER. EXPENSES 117,325 120,728 124,230 127,835 131,546 135,366 139,297 143,344 147,510 NET OPERATING INCOME 116,972 118,256 119,533 120,803 122,065 123,318 124,560 125,790 127,007 REPLACEMENT RESERVES 6,697 6,898 7,105 7,318 7,538 7,764 7,997 8,237 8,484 CASH FLOW FOR DSC 110,275 111,358 112,428 113,485 114,528 115,554 116,563 117,554 118,524 DEBT SERVICE Permanent Loan Hard Debt 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 84,105 VH HP Min Payment 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 2,520 NET CASH FLOW 26,170 27,252 28,323 29,380 30,422 31,449 32,458 33,448 34,418 MANAGEMENTFEES LP Asst Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 MGP Mgmt Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 CASH FLOW AFTER FEES 15,008 15,756 16,481 17,183 17,860 18,509 19,130 19,721 20,279 DEFERRED FEE & AGP FEE Deferred Fee Payment - - - - - - - - - AGP (Dev) Incentive Fee 5,581 5,748 5,921 6,098 6,281 6,470 6,664 6,864 7,070 CASH FLOW AFTER DDF 9,427 10,007 10,560 11,085 11,578 12,040 12,466 12,857 13,209 CITY OF NB NOTE Year -22 Year -23 Year -24 Year -25 Year -26 Year -27 Year -28 Year -29 Year -30 Surplus Cash Flow Payments 2,357 2,502 2,640 2,771 2,895 3,010 3,117 3,214 3,302 NET CASH FLOW 7,070 7,506 7,920 8,314 8,684 9,030 9,350 9,643 9,907 ATTACHMENT NO. 10 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY [SEE FOLLOWING DOCUMENT] 882/036753-0129 2765748.6 a12/08/15 -1- RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: Citv Manaeer Exempt From Recording Fee Pursuant to Government Code § 27383 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY Important notice to owners, purchasers, tenants, lenders, brokers, escrow and title companies, and other persons, regarding affordable housing restrictions on the real property described in this Notice: Affordable housing restrictions have been recorded with respect to the property described below (referred to in this Notice as the "Property") which require that the Property be developed as an affordable rental development and that all of the units except one manager's unit be rented to and occupied by persons and households of limited income at affordable rents. Title of Document Containing Affordable Housing Restrictions: Regulatory Agreement and Declaration of Covenants and Restrictions ("Regulatory Agreement"). Parties to Regulatory Agreement: City of Newport Beach, a California municipal corporation and charter city ("City"), and Newport Veterans Housing, LP, a California limited partnership ("Owner"). The Regulatory Agreement is recorded concurrently with this Notice, in the official records of Orange County. Legal Description of Property: See Exhibit "A" attached hereto and incorporated herein by this reference. Location of Property: 6001 Coast Boulevard, in the City of Newport Beach, County of Orange, California 92663. Assessor's Parcel Number of Property: 045-114-15. 882/036753-0123 2765748.6 x12/16/15 Page 1 of 6 Summary of Regulatory Agreement: o The Regulatory Agreement restricts rental of twelve (12) units as described in Exhibit B hereto. o The term of the Regulatory Agreement is 55 years. This Notice does not contain a full description of the details of all of the terms and conditions of the Regulatory Agreement. You will need to obtain and read the Regulatory Agreement to fully understand the restrictions and requirements which apply to the Property. This Notice is being recorded and filed in compliance with Health and Safety Code Section 33334.3(f)(3) and (4), and shall be indexed against the City and the Owner of the Property. [Signatures on next page] 882/636753-0123 2765748.6 a12Q6/15 Page 2 of 8 Date:,hE c \6 , 7015 ATTEST: A4 i Leilani I. Brown City Clerk APRO TO FORM: m LSI Aaron C. Harp uM MWIIC City Attorney 882/036753-0123 2765748.6 al2/16/15 "City" CITY OF NE RT BEA a California municipal c do By: Edward D. Selich Mayor Page 3 of 8 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTY OF C 0.0 N Co C ) On 'DE c_ 18 2017, before me,JIIVPIF�Et�aaNf�lJLv�Y, Notary Public, personally appeared to" ow- o D• -Sk- %-C- p1 proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/aFe subscribed to the within instrument and acknowledged to me that he/shoAkoy executed the same in his/hff4"r authorized capacityoes), and that by his/her-/4heir signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary P1tbl c 882/036753-0123 2765748.6 ai2/16/15 Page 4 of 8 [SEAL] JENNIFER ANN MULVEY commission # 2045022 z d Notary Public . California i •4:` Orange County g My Comm. Expire Oct 12, 2017+ EXHIBIT G°A" LEGAL DESCRIPTION OF PROPERTY All that certain real property situated in the County of Orange, State of California, and is described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 al2/16/15 Page 5 of 8 EXHIBIT "B" RESTRICTED UNIT MATRIX* Size No. of 30% AMI 40% AMI 50% AMI 60% AMI Units Veteran Senior Senior Veteran Household Household Household Household Unit Unit Unit Unit One bedroom 12 6 2 3 1 *At all times one (1) unit shall be occupied by an on-site property manager that is also an Eligible Tenant. 882/036753-0123 2765748.6812/16/15 Page 6 of 8 CONSENT TO RECORDATION Newport Veterans Housing LP, a California limited partnership ("Owner"), owner of the fee interest in the real property legally described in Exhibit "A" hereto, hereby consents to the recordation of the foregoing Notice of Affordability Restrictions on Transfer of Property against said real property. Dated: U-1 I � 2015 Newport Veterans Housing LP, a California limited partnership By: CDP Newport LLC, a California limited liability company Its: Administrative General Partner By: Community Development Partners, a California corporation Its: Sole Managing Member By: Eric Paine Its: CEO By: Mercy House Living Centers, a California nonprofit public benefit corporation Its: Managing General Partner By: �14 / Laynes Its: President 8821036753-0123 2765748.6 a12116/15 Page 7 of 8 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTYOF Orangg ) On OP-Cefnher If dol$ , before me, Tm Winftr^ Notary Public, personally appeared Eric. Nine, proved to me on the basis of satisfactory evidence to be the person(re'J whose name(FT mare subscribed to the within instrument and acknowledged to me thatu&she/they executed the same in&/her/their authorized capacity(ie94, and that by ®i/her/their signature($) on the instrument the person(f or the entity upon behalf of which the person(?) acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notafy Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) ) ss. COUNTY OF Or4nge. ) -------------- On OCtember V3jl _, before me, Tim Winaer , Notary Public, personally appeared IFrr�ynes proved to me on the basis of satisfactory evidence to be the person(,whose narnO ®rare subscribed to the within instrument and acknowledged to me that @/she/they executed the same in 1®/her/their authorized capacity(io)-, and that by 0/her/their signatureA on the instrument the personkgS or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. �� V/>4� Notary Pubh - - 882/036753-0123 TIM tNNNiiE 2765748.6 a12/16/15 ribrrlrrlission * 2oggfte of 8 Notary PubliC • California Orange County M Comm. Expires Feb 201 ATTACHMENT NO. 11 REAL ESTATE PURCHASE AGREEMENT DATED JUNE 30, 2015 [SEE FOLLOWING PAGE] 882/036753-0123 2765748.6 a12/08/15 -1- C A L I F O R N I A DISCLOSURE REGARDING 14,S A S S O C I A T L O N REAL ESTATE AGENCY RELATIONSHIP OF R.E A L T O& S's (Selling Firm to Buyer) (As required by the Civil Code) (CAR. Form AD, Revised 1214) ❑ (If chedted) This form is being provided in connection with a transaction for a leasehold interest exceeding one year as per Civil Code section 2070.13(k) and (m), When you enter into a discussion with a real estate agent regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you with to have with the agent in the transaction. SELLER'S AGENT A Seger& agent under a Gating agreement with the Seger ads as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmative obligations: To the Seiler: A Fiduciary duty of utmost are, integrity, honesty and loyalty in dealings with the Sager. To the Buyer and the Seller. (a) Diligent exardse of reasonable sM1 and are in performance of the agents dudes. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all fads known to the agent materially affecting the value or desirability of the property that are not (mown to, or within the diligent attention and observadon of, the parties. An agent Is not obligated to reveal to either party any confidential Information obtained from the other party that does not Involve the affirmativs duties set forth above. BUYER'S AGENT A calling agent an, with a Buyer's consent, agree to ed ea agent for the Buyer only. In these situations, the agent Is not the Sellers agent, even if by agreement the agent may receive compensation for services rendered, either In full or in part from the Sager. An agent acting only for a Buyer has the following affirmative obligations: To the Buyer. A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer. To the Buyer and the Sager, (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not (mown to, or Within the dilgent ettertadn end observation of, the parties. An agent is not obligated to reveal be either party any confidential Information obtained from the other party that does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and axe Buyer, In a duel agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer. (a) A fiduciary duty of utmost are, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller end the Buyer as stated above in their respective sections. In representing both Seger and Buyer, the agent may not, without the express permission of the respective party, disclose to the other party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered, The above duties of the agent In a real estate transaction do not relieve a Seger or Buyer from the responsibility to protect his or her own interest& You should carefully read all agreements to assure that they adequately express your understanding of the transaction, A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transection you may receive more than one disclosure farts, depending upon the number of Write assisting In the transaction. The law requires each agent with whom you have more than a =coal relationship to present you with this disclosure forth. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction, This disclosure form includes ffte provisions or Sections 2972.17 to 2079.24, Inclusive, of the Civff Code set forth on page 2, Read it carefully. WIVE ACKNOWLEDGE M OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CL CODE PRMTE"N THEBACK (OR A SEPAPA A ). ALJ Seger' LMMOW❑Tenant Date 7/2/15 caaaxmar oewmp+vae,r rra.n ❑ &W 0 serer 0 Lsndiohd nTermht Date M Ely Agency Disclosure Compliance (Coil Cade §2071.14): . When the Haft brokerage company also represents Buyerffenant The Listing Agent shag have one AD form signed by SegedLandmrd and a different AD form signed by Buyer/renent . When Sellerfl."lord and BuyerfTenant are represented by dRenxit brokerage ownpaniew p) the Uding Ager shall have one AD form signed by SelleMandlord and (11) the Buyees?enanfs Agent shell have one AD Farm signed try Buyerrranant and ether that same or a different AD form lo Be A,;ee_10 jor signature prior to p,)psantallon „of the offer. If the same form is used. Seller may sign here: ratline or AD REVISED 12114 (PAGE 1 OF 2) Revlaesd by sale . — . CML CODE SECTIONS 2979.24 (2079.15 APPEARS ON THE FRONT) 2070.13 An Used M Sections 2079.14 to 2079.24, inclusive, the Wkrsitg tenna haus the Marring meanincs: (a)'PAera' means a person acting ueedar provieions of Tile 9 (oomnyrKing what Sedan 229M in a real property transactor; and Includes a person who is troensted as a nod ash oe dose Wier Chapter 3 (conomping with Sarson 1013M of Pam 1 of DMdon 4 of are Business and Pro4giena Code, and under whose gmse a fisting Is eaaa led or an ober ba purchase a obened. (b) 'Associate Roared means a poem "a is Ikensed as a mal asmle, broker or salaspeaon under Chapter 3 (CURITTI ndrg with Section 10130) U(Pat 1 of Division 4 of the Bushhass wed Protestants Code and vdV Is elna bmaaed oder a broker or has entered Into a written gm0act wdln a broker to ad as the bakers agent in Cwmection with ads requiring a real arises lowest ons to function under Aa brake's supervision in the capacity of an associate Iowan n The agent in the reel property commotion has responsibility for hie or her associate kor sees who paten, as aesrts of the agere. V*fm an assodeie 11censee owes a duty warty Principal. or to any buyer or se9erwho is not a principal, in a real property duty Is equivalent to the duty awed to that parry by the broker for whom on aM)CM CcNSM 1Iahctiore. (C)'Buyes' near e; a Ma ham In a teat property tmaa;Wo at0 nWgeaa person who axed an antato purchase real property ram e soler tnroup'h an agent a who seeks ter smAms of an agent in more than, a ramal, rwahaY, or pretimhwr7 manna. with are abject of adwIng itdo a red property hanswtian. 'Buyer includes Vold" or teases (d 'Commercial rest property' means as red property n to Nate, except Wtvieslamly ream reel POP", dwelhhg alts made subjeer at Chapter 2 (mmmancing with Sedan 1940) of role 5, mob lehanas, as defined In Soden 798 3, or reeaatlahal veMdas, as defined In Sedan 799.29. (e)'DuW eget' means an agent wing, ether directly, or trough an sesodste lowheen as agent for hath he segs and the buyer n a reel Property transaction. fl)'Liateh9 agreement' meshes contrast between an owner of Feel property and an agent, by which the agent has heart autho¢ed to ad the reel P006 W tO War OK* 0 buyer. (2)'tlatn9 a9W maws a person who has obtained a Is" of rel property to ad as on agent for ponhpa+satlat. (h)'usdng price' a the amouit wprassed In dollars spedled In the lakfp far %#kh the segs Is willing to sea that real pop" avouch the Ymting apart 0) *ORmig pnoe is the amount otpressed In dollars specified in an after to purchase for Wrdh the buyer Is wlArg to bury to real property. (D'Olfer W purchase" mets a written rnttrad wcoubd b y • buyer acdrg Armagh a sevirg agent tet becanee to mnasct far are deb des real propwty upon aceeprana by nro srw. (Id •Rpt pmpwly' msuren any estate sped/ed by subdivision (1) or (2) of Sedan 791 In property that eondlutes or is nepnnad with as to Mas dwelling units, any vara erciai real property, any boost* in teeae West of prtpeety mccaedrg one yea's duration. and mobikharttea, when olferh:tl for ask or sold through an agent Pursuant to Ona audhanty contained in Section 10131.6 of the Wlnass and Proaessiaas Code. (g'Red property hansatlia'rtheare a baranson for the eels of rel pq" In Wine as Wm Is er payed by ons or orae of the principals to ad in tat transaction, and includes a 1 arg or an ago In pudhaea Im)'Saa; 'axis' whoa# reams to a transaction for the transfer of red property Mom the solo to the buyer, end includes exchanges d real properly 6ehvaia that sella and buyer, trNoactions for the oeatian or a Mg property mesa contract VMI%Ae meMi g Of Section 29eb. and Irsreadons far fie t llM Of e "ohm wtceeang one years duradan (n) -Safer mons Ae bartatrm In a red property treraadoh, and ncit" an Owner who Icts real prepay wdh an agent, %tater or not a bw oft me^ or w1w reeRrves an opt to pxcbm rel pmpwV o(Wk h ho or she is ane mw Morn m agent on boat d an hec'Sel& kdudes both a vendor and a Wow, (c)'Se%V aged means a kft agent Who cors alone, van agent who arts in mcpamfion whin a levrhg agent, and who cels orards am aboins a fiver for the red property, or an agent who locates property for a buyer or who 0rds a buyer kr a property for whi no 2abrh0 adeb wM peewee an elver to purchase to the acly. (p)'Stak enf means a carom to wham an agent delegates agtry powers>a prc ided m Article a (marnandg with Section 2349) of Chapter 1 of Mile 9. Hawever,'Nfiagend does not include an associate Rmseft% C is acting under theaperviean clan Agents a seat property trwstedw. 2076.14 Using agents and selling agents del provide the a" wd buyer In a rod property bansadtan w9h a Copy of she dmdomae form speoMed in Semon 2079.10, end, except as Provided in aitmvMJon (C), shag obtain a signed adarwhodpamat of receipt Tram that Wier or buyer, sweat as provided In We season or Sedan 2079.1 6, as frown; (a) The hung apart, t any, chap provide the dedasua faro to the aster p or to ahtedng nba the groin sinternm (b) The Sore a9ere shag provide ate disclosure faro to the safer ere eager, as grartlfAbe pdv to presenting the sevw with an aft to purchase, roles the as" agent perioudy provided the a der With a copy of the disclosure tam pursuant to subdivision (a). (t) Where the setting agent does not deal on a fa wfirft :e basis with the aeaer, the dada lli a form prepared by Ina HOMO 6" may be Manehed to the eager (and edgtowletlgarhtn of MCW apaned for the se9rg agent Mom the sWw) by t s prang 9gen4 or fee setting agera may delver to Wasurs tram by mntited mad addressed to the sella at the or her Nat swam address, In which case rm aigraad adowMedgamwt of receipt Is reporter. (d) The calling agent shad provide the dadonae form to Its buyer 06 loon es pacdc" pia to ereaulloe of the buyers o8arto pundieft except that t this offer to prdhase Is not prepared by One sling agent the seting agent shoe present dna disclosure Urn to the turner not mer trot the need busineas day after the selling aged receives the oft bapurchase from the buyer. 2079.16 In any cinoaratence in which the seller or buyer refuses to sign an adohohMedgemwt of receipt prsulnt to Secdas 2079.14, the agent or an associate timaea amnp furan agent shallset fain, slam. and datea wdten dederationdthe fame of gee ramal. 2079.16 Reproduced on Page 1 of ria AD form. 2x70.17 (a) As som sa predcahm, the m3kv agent arta diedose a aro buyerand sruwhedha ire se frg agent a wing in the real p opertybere ction exclusively ser aha buyer's agent aestulsay 0e nye selefs agent or as a dud apex rep sift both the dryer and bas seder. THB notakwithis shop be onnanned In the contract to purchase am err rod property a n 0 separate wrong oxecused v adawMedged by the srw, we buyer, and the seffig agntpmr m vadhndare v ah exacutm d gut emaad try ton buys and the seW. respectively. (b) As sour aw padicable, to luting agedslua dsdme b Aeselerwfidhttte Wtinp egr nt is Nang n tie red waparty eannaadcn hatlutiriW as 0M s01d'a saw% or ere a dud moat napeewetina bdh the drys and agar. This tdtAcroNo Shap be owth h the coMb ba pedyse am seg not property win a separate writing wooded vedawMadged by as srJteremtretstlrg agwnpriorta ercoirxidwtwMh to eaeuem wrest contact by the seder. (e) The =nfi nentiun renuked by shbdidadans (a) and (b) shall be In the froW ng form. _ _.100 NOT COMPLETE SAMPLE ONLY) a the apron of (dredk ora); o the soler oddusively; or 0 both Aa buyer and sdkr. is the agent of (dtedk ane); o the buyer erdudvey; Or Oft sdw exduNvely; or O both the Dryer and Balm. (d) no dsdosures and omfirontion required by No s,edoa shag be in addition loft disclosure aepuired by Section 2079.14 2879.16 No NWQ stn 111"propeaymaectlon nw alas an agahu rxtretwyer nly, what the setons agwrmdso acing aft acting alone nAe aansatlen 2079.19 The Payment Of Compensation or the obligation to pay OomPa,eatmn to en agent by the sever or buyer IS not necessity deletmnaWe of a particular agency helotior ship between an 09W and the adlar or buyer. A Rating agent and a sol""n9 agent mmr agree to share any conparaydon or commhsdon pals, v any right to any ownpensadon or Commission for which an obligatorh wham as the result of a real estate transaction, am the temFe of any Satoh agreement shay not neeasargy be deterninati e Of a Particular relationship. 2079,20 Ndhng in this article prevents an agent from ad rig, as a condition at the eases employment, a spalnc form of agency relationship not spedacaly prddrited by this ankle tthe requiremMle of Section 2079.14 and Section 2079.17 We Compiled with, 2079.21 A dud eget shall not doclose to the buyer gal Its selu le wiling trill the praperry ata para leas than the ung price, %*w ate e>4ress Milli consent oto sell. Adustagentwhda not dilmose bathe selarthatft buyertowAOsgba pay a price geNet than the aft' prkq wMhaROu expFes wntirh axrsmtottlhe buyer. This Sedan does not akern any way the duty err respaNidlty da dud agent to any principal with respect to Confidential htNmwtan udaertwn pia 2p79.22 Nothing in air article precludes a fietng eget Mom also bang a sting agent end the combination at these Miction In one spent does not, of ifaet, make that agent a doral agent 2070.23 A wanted bob~ that principal and saw* may be modified or shred to Charge the agency relationship at any nme before rte p rkmw ore of the act which is the object orate agency Wan the wrnerh mteerd of Utte partios to ate 9gency Feetonahip. 2079.94 Nothing in this entde shot be construetl to eieha do"Sh the ON of disclosure owed More, and severe by a" and their associate Reonse is, subegente, and employees or to relieve agents and their aeeodate Damages, subagents, and employees tom III for their Conduct In Connection with acts gove med by this article or for any brought of a fidndary duty or a duty ddisdcsum 1ltiaad end aeaLuba ay REAL GUAM euaren35 SEAVIU B, INC a a40dmydad Ceabrna Anodstlm ofAMFORa9 Reiaaadby pale ` wa awn VW AvenuA LmAnpdam Cerrnre 10020 AD REVISED 12114 (PAGE 2 OF 2) a DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (AD PAGE 2 OF 2) Raduwd dtlesipFm.agdpaapa repro rbeenkv.tmea, n.sar Aadwgwt 4aM6 aaw.ilaoplLeas P..pefe. CALIFORNIA ASSOCIATION 7 OF REALTORSO RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (C.A.R. Form RIPA, Revbrad 41N4) Date Prepared: June 30, 2015 1. OFFER: A. THIS IS AN OFFER FROM B. THE REAL PROPERTY to be acquired is C. ('Buyer), D. CLOSE OF ESCROW shall occur on (date)(or B0 Oays After Acceptance). E. Buyer and Seller are referred to herein as the 'Padies." Brokers are not Parties to this Agreement 2. AGENCY: A. DISCLOSURE: The Partles each admanwedge receipt of a 0 "Disclosure Regarding Real Estate Agency Relationships (C.A.R. Form AD). S. CONFIRMATION: The following agency relationships are hereby Confirmed for this transaction; rte..Listing Agent .. _ Barkadfa Reel Estate Advisory. Int. (Print Firm Name) is the agent of (check one): ,n. .. . Selling Agent Be a Rea/EsWteAdvi = Inc. (Print Firm Name) (if not the same as the Listing Agent) is the agent of (check ane): the Buyer exclusively; or U the Seger exclusively, or® both the Buyer and Seiler. C. POTENTIALLY COMPETING BUYERS AND SELLERS, The Parties each adm Wedge receipt of a O'Potential Representation of More than One Buyer or Seger - Disclosure and Consent' (CAR, Form PRBS). S. FINANCE TERMS: Buyer represents that funds will be good when deposited with Escrow Holder. A. INITIAL DEPOSIT. Deposit shall be in the amount of ........................................ $ 100.000.00 (1) Buyer Direct Depositer shell deliver deposit directly to Escrow Halder by electronic funds ❑ c transfer, ashlees Check personal check, UX other wire within 3 business days after Acceptance (or ); OR (2)[] Buyer Deposit with Agent Buyer hes given the deposit by personal check (or ) to the agent submitting the offer (or to ), made payable to . The deposit shall be held uncashed urktil Acceptance and then deposited with Escrow Holder within 3 business days after Acceptance (or ). Deposit checks given to agent shall be an original signed check and not a copy. (Norte. Initial and increased deposits checks received by agent shall be recorded In Brokers bust fund log.) B. INCREASED DEPOSIT: Buyer shall deposit with Escrow Holder an increased deposit in the amount of... $ within Days After Acceptance (or ), N the Parties agree to liquidated damages in this Agreement, they also agree to incorporate the increased deposit into the liquidated damages amount in a separate liquidated damages clause (C.A,R. Form RIO) at the time the increased deposit is delivered to Escrow Holder. C. ❑ ALL CASH OFFER: No ban is needed to purchase the Property. This offer is NOT contingent on Buyer obtaining a ban. Written verification of sufficient funds to dose this transaction IS ATTACHED to this offer oro Buyer shall, within 3 (w_) Days After Acceptance, Deliver to Seller such verification, D. LOAN(S): (1) FIRST LOAN: in the amount of ....................................................... S 1,995,000.00 This loan will be conventional fl clng u ❑ FHA, ❑ VA, ❑ Seller financing (CAR. Forth SFA), ❑ assumed finarring (CAR Form AEia, j`�I�subjedto financing, ❑ Other . This loan shag bents fixed rate notto exceed _ % or, an adjustable rate loan with initial raft not to exceed %. ROe type oTbanBuyer eh.a.A .p.a.y.p.0.t+.1t.5 .rh.a.t.ta.e.x.0.e.ti.l......%..o.f.t.h.e.loan amount (2) ❑SCOeNDWLh_. .............. $ This loan will be conventional financing or Seller financing (C.A.R. Form SFA), F1 assumed financing (C.A.R. Form AFA), ❑ subject to financing] Other . This ban shag be at a fixed rate not to exceed % or, ❑ an adjustable rate loan with initial rate not to exceed %. Regardless of the type oI loan, Buyer shag pay points not to exceed _ % of the loan amount. (3) FHAIVA: For any PHA or VA loan specified in 30(1), Buyer has 17 (or _ ) Days After Acceptance to Deliver to Seller written notice (C.A.R. Form FVA) of any lender -required repairs or costs that Buyer requests Seger to pay for or otherwise Correct Seger has no obligation to pay or satisfy lender requirements unless agreed In writing. A FHAIVA emendatory clause (C.A.R. Form FVAC) shall be a pert of this transeckion. E. ADDITIONAL FINANCING TERMS: Buyer to Increase cash to maximum 1st TO obtainable. F. BALANCE OF DOWN PAYMENT OR PURCHASE PRICE in the amount of ...................... $ 1.400.000.00 to bedepos ' Escrow Holder pursuant to Escrow Holder instructions. O. PURCHASE E (TOTAL): ..................................................... _•�• $ 3.185,00000 Buyers k4als ( ) SrJler'e Inidala 02014, Calacrnla Aeecddmn o1 REALTORSS, Mc. RIPA REVISED 11114 (PAGE 1 OF 11) S RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 1 OF 11) Property Address: $M Newport Shores Ur Ne. NlWboft Beath CA 92663 Date: June 30, 201$ H. VERIFICATION OF DOWN PAYMENT AND CLOSING COSTS: Buyer (on Buyer's lender or loan broker pursuant to paragraph 3J(1)) shag, within 3 (or _ ) Gaye After Acceptance, Deliver to Seller written verification of Buyers down payment and closing costs. (❑ Verification attached.) I. APPRAISAL CONTINGENCY AND REMOVAL_ This Agreement is (or [E Is NOT) contingent upon a wri tan oppmIsal of ft Property by a licensed or certified appraiser at no leas than the purchase price. Buyer shah, as specified in paragraph 198(3), in writing. remove the appraisal contingency or Cancel this Agreement within 17 (or _) Days After Acceptance. J. LOAN TERMS: (1) LOAN APPLICATIONS; W hi in 3 (or _) Days After Acceptance, Buyer shall Deliver to Seller a letter horn Buyers lender or ban broker stating that based on a review of Buyers written application and credit report Buyer Is prequaU6ad or preapproved for any NEW ban spedhed in paragraph 3D. t any loan specified in paragraph 3D is an adustable rate ban, lite prequafificatlon or prsapproval letter shag be based on the qualifying rata, not the initial loan rate. ( ❑ Letter attached.) (2) LOAN CONTINGENCY, Buyer shag act diligently and in good faith to obtain the designated loan(a). Buyers qualification for that loan(s) specified above is a contingency of this Agreement unless otherwise agreed in writing. If there Is no appraisal contingency or the appraisal contingency has been waived or removed, tan failure of the Property to appraise at the puniness pdoe does not entitle Buyer to exilic" the cancellation right pursuant to Ota ben contingency t Buyer is otherwise quallied for the sperfied ban. Buyers contractual eh6gaeorc regarding deposit, balance of dawn payment and daft costs are net contingencies oftt(a Agreement (3) LOAN CONTINGENCY REMOVAL; Within 21 (or ) Days Atter Acceptance, Buyer shall, as specified in paragraph 19, in writing, remove the loan contingency or cancel this Agement If there is an appraisal contingency, removal of the ban contingency shag not be deemed removal of the appraisal (4) ® NO LOAN CONTINGENCY. Obtaining any ban specified above is NOT a contingency of this Agreement. t Dwyer does not obtain the I= and as a result Buyer does not purchase the Property, Deformity be entitled to Buyers deposit or other legal remedhs. (9) LENDER UMffa ON BUYER CREDITS: Any credit to Buyer, from any source, for dosing or other Coats that is agreed to by the Parties ('Contractual Credir) shall be disclosed to Buyers lender. N the total credit allowed by Buyers lender ('Lender Allowable Cmdir) is leas than the Contractual Credg. then 01 the Contractual Credit shall be reduced to the Lender -Allowable Credo, and (g) in the absence of a separate written agreement between the Parties, there shall be no automatic aqualment to the purchase price to make up for the difference between the Contractual Credit and the Lender Allowable Credit. (8) ASSUMED OR SUBJECT TO FBIANCBIGI Salim ropmeanto that Seger to not delinquent an any payments due on any loon. If the Properly Is aoquirad subject to an existing loan, Buyer and Seller are advised to consult with legal council regarding the ability of an existing lender to call the ban due, and the consequences thereof. K. BUYER STATED FINANCING: Dellen is relying on Buyers representation of the type of financing specified [including but not limited to, as applicable, all cash, amount of down payment, or contingent or non -contingent loan). Seger has agreed to a specific dosing data, purchase price and to gall to Buyer in reliance on Buyers covenant concerning financing. Buyer shag pursue Ube financing specified in this Agreement Seller has no obligation to cooperate with Buyers'aRorta to obtain any financing other than that specified in the Agreement and the availability of any such atemale financing does not excuse Buyer from the obligation to purchase the Property and dose escrow as specified In this Agreement 4. SALE OF BUYER'S PROPERTY: A. This Agreement and Buyers ability to obtain financing are NOT contngem upon the sale Warty property owned by Buyer. OR B. ❑ This Agreement and Buyers ability to obtain financing are contingent upon the sate of property owned by Buyer as specified in the attached addendum (CAR, Form COP). .. S. ADDENDA AND ADVISORIES: 6. 11SeOertooruvfrleCffuofNewrtortBeach resf alialrecordsreuort 2) See attecheclAddendum #1 for addfirpmal terms a condhrons. ALLOCATION OF COSTS A. INSPECTIONS, REPORTS AND CERTIFICATES! Unlm otherwise agreed, N writing, this paragraph only determines who is to pay for the inspection, test, certificate or service ('Repos') mentioned; it does not determine who is to pay for any work Mommended of Identified In the tReport (1) ❑Buyer ® Seller shag pay for a natural hazard zone disclosure report including tax ❑environmental ❑Other prepared by First American Natural Hazard Disclosure (2) Buyer ❑ Seller shall pay for the following Report (3) W Buyer U Seller shag pay Buyers Inidats N h Sellers Initials RI PA REVISED 11 4 (PAGE 2 OF 11) 4 RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 2 OF 11) hkeahaawmaWrdmetr; aah.ase„emsrw.,, iee.rmw.n..., tseas...mx c+.-w..s.... Q Date: Jima 30, 2015 (1) ❑Buyer 0 Seller shall pay for smoke alarm and carton monoxide device Installation and water heater bracing. If required by Law Prior to Close Of Escrow ('COE'), Soller shall provide Buyer written statements) of compliance in accordance with state and local Law. unless Seller is exempt (2) (1) ® Buyer ❑ SeW shag pay me cost of compliance with any other minimum mandatory government inspections and reported wired as a conditron of dosing escrow under any Law. 01) Buyer ❑ Seger shag pay the cost of compliance with any other minimum mandatory government retrofit standards requi ed as a condition of dosing escrow under any Lew, whether the work is required to be completed before or after COE. (fit) Buyer shell be provided, within the time specified in paragraph I A a copy of any required govemmard conducted or point-of- sale Inspection report prepared pursuant to this Agreement or in anticipation of this more of the Property. (3) 2 Buyer ❑ Seger shall pay (w installation of approved fire aftiguiaher(s), sprinWsr(s), and hese($). If required by Law, which shag be installed prior to Gose Of Esornw. Prior to pose Of Escrow, Seflershd provide Buyer a written stalartrmtof c rnpgance. trequired by Law, (4) []Buyer ®Seger shall pay for Installation of drain cover and anti -entrapment device or system for any pool or spa meeting the minimum requirements permitted by the U.S. Consumer Products and Safety Commission. C. ESCROWANDT1iLE: (1) (a) ®Buyer 0 Seller shall pay escrow fee Each to may ireirpww Fasigglah if fees (b) Escrow Holder shag be to he aareed doom (e) The Parties shall, within 5 (or ) Days After roceipt sign and return Escrow Holder's general pmviaione. (2) (a) ❑ Buyer 0 Seller shall pay fa owner's title Insurance policy specified in paragraph 18E (b) Owner's title policy to be issued by to &OF"d (Buyer shag pay for any title Insurance Policy insuring Buyers lender, unless otherwise agreed in writing.) D. OTHER COSTS: (1)Buyer � Seger shall pay County transfer tax or fee (2) Buyer Seliershail pay City transfer tax or fee WA (3) Buyer Saner shag pay Homeowners' Association CHOA) transfer fee WA (4) Seller shall pay HOA fees for preparing documents required to be delivered by Civil Code 64525. (5) ❑ Buyer❑ Seger shag pay HOA fees for preparing all documents other than those required by ON Code 64525. (8) Buyer to y for any HOA certification fee. () Buyer Seller aha8 pay for any private transferfee WA 7 (8) LjBuyer LjSeller shall pay for WA (9)Buyer Sellershallpay for W (10)Buyer Seger shall pay for Es cost, not to mos $ , of a Lj4tonclard Lj upgraded one. year home warranty ,pen, issued by , with the following optionalcuvemges: uAirCenditioner UPoolf8paOther, Buyer 13 intomurr red that home warranty plans have many optional coverages In addition to those listed some. Buyer is advised to investigate these coverages to determine those that may be suitable for Buyer. OR® Buyer waives the purchase of a home warranty policy. Nothing in this paragraph precludes Buyer•$ purchasing a home warranty policy during the farm of the Agramenont 8. ITEMS INCLUDED IN AND EXCLUDED FROM BALE: A. NOTE TO BUYER AND SELLER: Items listed as Included or excluded in the MLS, flyers or marketing materials are not included in the purchase price or excluded from the sale unless specified in paragraph 88, C or D. B. ITEMS INCLUDED IN SALE: (1) AN EXISTING fixtures and fillings that ars attached to the Properly: (2) EXISTING electrical, mechanical, lighting, plumbing and heating fixtures, calling fans, fireplace inserts, gas logs and grates, solar power systema, butt -7n appliances, window and door screens, awnings, shudem, window covering&, attached floor coverings, terevision antennas, sategile dishes, air coolers/condlUmers, pooVspo equipmem, garage door openers/remote controls, maA:ox, in -ground landscaping, tress/shrubs, water features and fountains, water softeners, water purifiers and security systemslalerms. (3) Seger represents that all items included in the purchase price, unless otherwise specified, are owned by Seller, except (i) WA and (q the items and systems Identified pursuant to 8B(4). (4) LEASED OR LIENED ITEMS AND SYSTEMS: Seller &hall, within the Vim specified In paragraph 19A, (t) disclose to Buyer N any nem or system specified In paragraph 88 or ofhenvke included in Ina saie is lensed. or not owned by Sager, or specAcally subject to a Ron or other encumbrance, and (N) Dollar to Buyer all written materials (such as tease, warranty, oto) concerning any such hem. Buyer's ability to assume any such tease, or willingness to accept the Property subject to any such lien or encumbrance, is a contingency in favor of Buyer and Seger as specified in paragraph 198 and C. (5) Except as otherwise specified or disclosed, all items included shall be transferred tee and clear of liens and encumbrances and without Seger warranty regardless of value. (8) A complete inventory of all personal property of Sellar currently used in the operation of the Property and inducted in the purchase price shag be delivered to Buyer within the time specified in paragraph 19. (T) Seger shall deliver title to the personal property by Bill of Sale, nee of an lieu and encumbrances, and without warranty of condition. (a) As additional security for any note in favor of Seller for any part of the purchase prim. Buyer shall execute a UCC -1 Financing Statement to be filed with the Secretary of State, covering the personal property included in the purchase, replacement thereof, and insurance proceeds. C. ITEMS EXCLUDED FROM SALE: WA D. OTHER ITEMS: Existing integrated phone and home sAm—alleraystams, including necessary components such as intranet end Intemeboonn d ardware or devices, control ungs (other than non -dedicated mobile devices, electronics and cornputws) and applicable so , permissions, passwords, codes and access Information, are (❑ are NOT) Inductin ssle. eta Initlwls ( 1 3esees Initials ( ( t ^ kA REY(SE011 14 AGE 3 OF 11) s 2' RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 3 OF 11) .. r�rsrm wun:tpramopzpnpr henna rvroenMr.aor0. rn.., rawer anus ammUssadaund n..rona.o., Properly Address: 6001 Newport Shores Odye, Newport Beach, CA 92663 Date: June a 2016 0. SECURITY DEPOSITS: Security deposits, V any, to the extent they have not been applied by Seiler in accordance with any rental agreement and current Lew, shag be transferred to Buyer on Close Of Escrow. Sailer shall notify each tenant, in compliance with the California Civil Code. 10. CLOSING AND POSSESSION: A. Buyer dntende (or ock es not intend) to oxupy any unk in the Property as Buyers primary residence. B. Sellor-oceupled or vacant propatgn Possession shag be delivered to Buyer: (1) at 0 PM ❑ or ❑AM/ ❑ PM) an the data of Chas Of Escrow; (IQ ❑ no later than calendar days After Gose OF Escrow; or (ll at A� PM on , C. Satter Remaining In Possession Altar Close Of Escrow: t Safer has the right to remain �� in possession arw Glass Of Escrow, (Q the Pardee are advised to sign a separate ooeupancy agreement such as ❑ CAR Form SIP, for Seger continued oaanpaney of less than 30 days, ❑ CAR. Form BLAS for Seger continued occupancy of 30 days at more; and (g) the Parties are advised to consuh with thek Insurance and legal advisors for information about liability and damage or injury to persons and personal and real property; and (iIQ Buyer is advised to consult with Buyers lender about the impact of Sellar's occupancy on Buyer's loan. D. Tenant occupied units: Possession and occupancy, subject to the rights of tenants under existing leases, shag be delivered to Buyer on Close Of Escrow. E. At Clare Of Escrow: (Q Seger assigns to Buyer any assignable warranty rights for items included in the sale; and (IQ Seller shall Deliver to Buyer available Copies of any such warranties. Brokers cannot and will not determine the assignability, of any warranties. F. Al Close Of Escrow, unless otherwise agreed in writing, Seller shall provide keys, passwords, codes and/or means to operate all locks, mailboxes, secvdty systems, alarms, home automation systems and Intranet and Internet-connected devices Included In the purchase Price. and garage door openers. ff the Property is a condominium or located in a common interest subdivision, Buyer may be required to pay a deposit to the HomaoKmere' Assedallon (HOAJ to obtain keys to accessible HOA facififiets. 11. STATUTORY AND OTHER DISCLOSURES (INCLUDING LEAD-BASED PAINT HAZARD DISCLOSURES) AND CANCELLATION RIGHTS: A. LEAD43ASM PAINT HAZARD DISCLOSURES: (1) Seger shag, wilt the time specified in paragraph 10, deliver to Buyer, t required by Law, Federal Lead-Based Paint Disclosures and pamphlet (Lead Disclosures'). if the Lead Disclosures are delivered to Buyer after the offer is Signed, Buyer shag have the right to cancel this Agreement within 3 Days Agar Delivery in person, or S Days After delivery by deposit in the mag, by giving written notice of cancellation to Sefer or Sellers agent (Lead Otedoeures sent by mail must be sand certified mail or better.) (2) Buyer shag, within the time specified In paragraph 1S, return a Signed Copy of the Lead Disclosure to Beller. B. NATURAL AND ENVIRONMENTAL HAZARDS: Within the time specified in paragraph 19, Seger shad. if required by taw: (Q deliver to Buyer earthquake guldes (and questionnaire) and environmental hazards booklet and 09 even t exempt from the obligation to provide a NHD, disc oss t the Property is torted in a Special Flood Hazard Area; Potential Flooding (Inundation) Area; Very High Fire Hazard Zone; State Fire Responsibility Area; Earthquake Fault Zone; Seismic Hazard Zone; and ("d) disclose any other zone as required by Law and provide any other information required for those zones. C. VMHHOLOING TAXES: Within the time specified in paragraph IS& to avoid required withholding, Seller shall Deliver to Buyer or qualified substitute, an agidavg sufficient 1a vo mply with federal (FIRPTA) and Caltamia withhr>lding Law (GAR. Farm AS Dr QS). D. MEGAN'S LAW DATABASE DISCLOSURE: Notice: Pursuant to Section 290.46 or the Penal Code, information about specified registered sex offenders Is made available to the public via an Internet Web aft maintained by the Department of Justice at www.magensbw.00.gov. Depending on an offenders criminal history, this information will include either the address at which the offender resides or the community of residence and ZIP Code in which he or she maides. (Neither Seger nor Brokers are required to check this website, if Buyer wants further Information. Broker recommends that Buyer obtain information from this webehe during Buyers inspection contingency period. Brokers do not have expertise in this area.) E NOTICE REGARDING GAS AND HAZARDOUS LIQUID TRANSMISSION PIPELINES; Tire notice is being provided simply to inform you that information about the general location of gas and hazardous liquid transmission pipelines is available to the public via the National Pipallns Mapping System (NPMS) Internet Web ads maintained by the United States Department of Transportation at htfpJhrww.npms.phmsa.doLgav/. To seek further information about possible transmission pipelines near the Property, you may conked your local gas utility or other p peline operators in the area. Contact Information for pipeline operators is searchable by ZIP Code and county on the NPMS Internet Web site. F. OOND MIINIUM/PLANNED DEVELOPMENT DISCLOSURES: (1) SELLER HAS: 7 (cr _) Days After Acceptance to disclose to Buyer whether the Pro" is a condominium, or is located in e planned development or other common interest subdivision (CAR Form $PQ or SSD). 12) N the Property is a condomindum or Is located in a planned development or other common interest subdivision. Seger hes 3 (or_ ) Days After Acceptance to request from the HOA (CAR. Form HOA1): (Q Copies of any doviments required by Law; iii) ddsdoaure of any pending or anticipated dalm or litigation by or against the HOA; (ill) a ststsrnent containing the location and number of designated parting and storage spaces; (Iv) Copies of the most recent 12 months of HOA minutes for regular and special meetings; and (v) the names and contact information of all HOAs governing the Property (eofedivaly, "CI Diadosures7. Sailor shall itemize and Delver to Buyer lig Cl Disclosures received from the HOA and any CI Disclosures in Sellers possession. Buyers approval of C1 Disclosures is a contingency of this Agreement as spedfed in paragraph 108(3). The Party specEed to paragraph 7, as directed by escrow, shall deposit funds into escrow or allied to HOA lir management company to pay for any of the above. 12. RESIDENTIAL 1.4 PROPERTIES: A. Seller shag, within the mune specified in paragraph IDA, Deliver to Buyer. 0i if required by Law, a fully competed: Federal Lead-Based Paint Disclosures (GAR Farm FLD) and pamphlet ("Lead D"wdoaames'); and (11) unless exempt, fully completed disclosures or notices required by sections 1102 at seq. and 1103 et saq. of the CMI Code ('Statutory Dlsdosures'). Statutory Disclosures Inc", but are not limited to, a Real Estate TMneW Disclosure Statement (TDSJ, Natural Hazard Disclosure Statement (NHDI), notice or actual knowledge of release of illegal controlled substance, notice of special tax and/or assessments (or, t allowed, substantially equivalent notice regardin the Me110-Roos Community FanxTdles Ad of 10132 and improvement Bond Act of 1015) and, If Seger has actual knk=911, o n sbial rte end mghary ordnance location (CAR. Form SPO lir SSD). Buyers initials ( ( 1 Sellers Initials ( ( l RIPA REVISED 11!14 (PAGE 4 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 4 OF 11) «=� Prracea vAe, baromAbf arca,. 19ar0 Fllreen tae Peal Frerx, aedgarleP3e : arjtplayxmm a...rr. Now Property Address: 6001 Newport Shores Drive, NhswpQrt Beach. CA 92663 Date, JUne 30.2015 B. Any Statutory Disco acre required by this paragraph te rensfdered fully completed'd Seiler has answered ail questions and completed and signed the Sadler section(s) and the Listing Agent, if any, has completed and signed the lasting Broker section(s), or, if applicable, an Agent Visual Inspection Disclosure (CAR Form AVID}. Nothing stated herein relieves a Buyer's Broken if any, from the obfigatio l to (f) conduct a reasonably competent and diligent visual inspection of the a cassible areas of the Property and disclose, on Section IV of the TDS, or an AVID, material facts affaNhg the value or desirability of the Property that were or should have been revealed by such an inspection or ((t) complete any seniors on all disclosures required to be completed by Buyer's Brokar. C. Note to Buyerand Seiler: Wa(var of Statutory and Lead Disclosures is prohibited by Law. D. Within the lime specified in paragraph 19A, (t) Sellar, unless exempt from the obligation to provide a TOS, shop, vmlhln the time specified in paragraph 19A, complete and provide Buyer with a Seller Property Questionnaire (CAR Form SPO) n if Seller is not required to provide a TOS, Seller shat complete and provide Buyerwith a Supplements! Contractual and Statutxy Disclosure (CAR Form SSD). E. Buyer shat, within the time specified in paragraph 19B(t), return Signed Caples of the Statutory. Lead and other disclosures to Seger. F. In the event Seller or Usting Broker, prior to Close Of Escrow, becomes aware of adverse conditions materially affecting the Property, or any material inaccuracy in disclosures, information or representations previously provided to Buyer, Seiler shag promptly previde a subsequent or amended disclosure or notice, in writing, covering those items. However, a subsequent or amended disclosure shag not be required for conditions and material inaccuracies of v60 Buyer is otherwise aware, or which are disclosed in reports Provided to or obtained by buyer or ordered and paid for by Buyer. G. If any disclosure or notice specified in paragraph 12A, or subsequent or amended disclosure or notice Is Delivered to Buyer after the offer is Signed. Buyer shall have the right to cancel this Agreement within s Days After Dafivery In parson, or i Days Amar Delivery by deposit In the mail, by giving written notion of cancellation to Sager or Sellers agent 19. SELLER DOCUMENTATION AND ADDITIONAL DISCLOSURE: tNthln the time speemed In paragraph 19, Setter shall disclose, make available or Deliver, as applicable, to Buyer the following Information. A. RENFALISERVICE AGREEMENTS: Seiler shall make available to Buyer for Inspection and rmhav m all current lasses, rental agreements, esmdce contracts, and other agreements pertaining to the operation of the Property; (B) a rental statement including names of tenants, rental rates, period of rental, date of last ram Income, searfty deposaa, rental concessions, rebates or other benefits, If any, and a fist of delinquent rents and tthetr duration. Seger represents that no tenants entitled to any rebate, concession. or other benefit, except as set forth in rheas documents. Seger represents that the dodamerhd to be fumfshad she Chase maintained in the ordinary and normal course of business. B. INCOME AND EXPENSE STATEMENTS: Seller shag make available to Buyer the boots and records for the Properly, Including a statement of Income and expense for the 12 months preceding Acceptance, Seller represents that the books and records ars those maintained in the ordinary and normal course of business, and used by Seger In the computation of federal and state income tax returns. C. ❑ TENANT ESTOPPEL CERTIFICATES: (If checked) Seger shalt Deliver to Buyer tenant estoppel certificates (C.AR. Form TEC) completed by Sailer or Seller's agent, and signed by tenants, acknowledging: (i) that tenants' rental or lease agreements are unmodified and in full force and effect (or if modified, stating ail such modifications); (if) that no lessor defauis exist and pit) stating the amount of any prepaid rent or security deposit D. SURVEY, PLANS, AND ENGINEERING DOCUMENTS: Sager shag, at no cost to Buyer. Do%w to Buyer Copies of surveys, plans, spectitcat ins, and engineering documents, if any, prepared on Sellers boned or in Sellers possession. E. PERMITS: I in Sellers possession, Sellar shall Deliver to Buyer Copies of all permits and approvals concerning the Property, obtained from any governmental entity, including, but not limited to, certificates of occupancy, conditional use permits, development plans, and licanaas and parmas pertaining to the operation of the Property, F. STRUCTURAL MODIFICATIONS: Seller shag disclose to Buyer in writing any known structural additions or alterations to, or the Installation, ameration, repair or replacement of, significant components of the structure(s) upon the Property, 0, SELLER REPRESENTATION: Seiler represents that Seller has no actual knowledge: (7 of any current pending lawsuft(s), investigation(s), inquiry(lea), action(s), or other procesding(s) affecting the Property or the right to use and occupy it (fi) of any unsatisfied mndhanlds or malerialman Ifen(s) affecting the Property; and (Td) that any tenant of the Property is the subject of a b=ruptty. I Seller receives any such notice prior to Gose Of Escrow, Seller shall immediately notify Buyer, H. GOVERNMENTAL COMPLIANCE: (1) Seger shall disclose to Buyer any Improvements, additions, alterations, or repairs to the Property made by Seller, or known to Seger to have been made, without requirad governmental pemhils, final inspections, and approvals, (2) Seger shag disclose to Buyer If Seller has actual knowledge of any notice or violations of law filed or issued against the Property. 16, SUBSEQUENT DISCLOSURES: In the event Sailer, prior to Gose Of Escrow. becomes aware of adverse conditions materially affecting the Properly, or any material inaccuracy, In disclosures, information or representations previously provided to Buyer. Seller shag promptly Deliver a subsequent or amended disclosure or notice, in writing, covering those Items. Howoi er, a subsequent or amended disclosure shall not be required for conditions and m stsrlat Inaccuracies or which Buyer is otherwise aware, or which are disclosed in reports provided to or obtained by Buyer or ordered and paid for by Buyer. 19. CHANGES DURING ESCROW: A. Prior to Close Of Escrow, Seger may engage in the following ads ('Proposed Changes•), subject to Buyers rights in paragraph 19B: (0 rent or lease any vacant unit or other pert of the premises; (ill) after, modify or extend any existing rental or lease agreement; (h') enter into, alter, modify or extend any service contract(s); or (v) charge the status of the condition of the Property, B. Al least T (or_) Days Priarto any Proposed Changes, Seller shag Deliver written notice to Buyer of such Proposed Changes. 16. CONDITION OF PROPERTY: Unless otherwise agreed in writing: (1) the Properly is sold (a)AS-I54 in its PRESENT physical condition as of the date of Acceptance and (b) subject to Buyers Investigation rights; (b7 the Property. Including pool, we. landscaping and grounds, is to be maintained In substantially the same condition as an the date of Acceptance; and 00) all debris and personal property rot included in the sale shag be renewed by Gose Of Escrow. A. Seger shag, within the Ilme specified in paragraph 1 K DISCLOSE IONOVM MATERIAL FACTS AND DEFECTS affecting the Property, including known Insurance claims within the past five years, and make any and all other disdmwres required by law, B. Buyer has the right to conduct Buyer Investigafions of the property and, as specified in paragraph 19a, based upon information discovered in those invaetigations: 0i dance) this Agreement or (it) request that Seger make Repairs or take other action. C. Buyer Is strongly advised to conduct trrvaetlgMtohm of the orNha Preperty in order to determine no present condition. Seger may not be aware of all defects affecting the Property or other factors that Buyer considers Important. Property improvements may not be butt according to soda, to compliance what current law, or have had pemdte Buyers Initials ( 1( 1 Sellers tnidels ( M ( h 7 RIPA REVISED 11M4 (PAGE 6 OF 11) Lam. RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 5 OF 11) wdueerwmq+rure h'drweyi tm]o crheu MV aura truer. ttdikra�ea7a WOLU12OLM N,wwtaww Property Address: 6001 Newport Shores Drive, Newport am& CA 82663 Date: June 30, 2015 17. BUYER'S INVESTIGATION OF PROPERTY AND MATTERS AFFECTING PROPERTY: A. Buyer's acceptance of the coodifion of, and any other matter affecting the Property, Is a contingency of this Agreement as specified kr this paragraph and paragraph 19B. Whin the time specified In paragraph 198(1). Buyer shall have the tight, at Buyer's expense unless othimMse agreed, to conduct inspections, investigations, tests, surveys and other studies ("Buyer Investigations')Including, but not limited to, the right to: (f) insped for lead-based paint and other lead4meed paid hazards; (ay inspect for wood destroying paste arid organisms. Any inspection for wood destroying pests and organisms shell be prepared by a registered Structural Peat Control company: shall cover the main building and adached structures; may cover detached structures; shall NOT include water testa of shower pans on upper level units unless She owners of property below the show consent shag NOT Include root coverings; and, Ifthe Fmpary is a unit in a condominium or other common interest subdivision, the inspection shag Include only the separate interest and any excWsive-use areas babe transferred, and she8 NOT include common areas and shag Include a report CPest Control Reporr) showing the fmdings of the company which ahall be separated into sections for evident Mentation or Inteot orre (Section 1) and for conditions Likely to lead to infestation or infection (Section 2); R review the registered sex offender database; (Iv) confirm the insurability, of Buyer and the Property including the availability and cost of flood sod lire Insurance; (v) review and seek approval of leases that may need to be assumed by Buyer, and (vi) satidy Buyer as to any metier wedged in the attached Buyers Inspection Advisory (CAR Form BIA). WNhout Sellers prior wdten consent Buyer shall neither make nor cause to be made: 0) Invasive or destructive Buyer Investigations except for minimally invasive testing required to prepare a Peat Control Report or no Inspections by any governmental building or zoning Inspector or gov®mment employee, unless required by Law. B. Seger shall make the Property available for all Buyer Investigations. Buyer shag (1) as specified in paragraph 198, complete Buyer Investigations and either remove the contingency or cancel this Agreement and (t) give seller, at no asst, complete tropias of ail such Investigation reports obtained by Buyer, which obligation shag survive the termination of this Agreement C. Seger shag have water, gas, electricity, and ail operable pilot lights on for Buyers Investigations and through the date possession is made available to Buyer. D. Buyer Indemuty and sewer Protection for entry anon property: Buyer shag: M keep the Property free and dear of liens; 01) repair all damage arising from Buyer Investigations: and (m) Indemnify and hold Sellar harmless hem all resulting Wall claims, demance. damages and costs. Buyer shall carry, or Buyer shag require anyone acting on Buyers behalf to carry, policies of Itabgty, workers' compensation and other applicable insurance, defending and proteoft Sellar from Pebbly for any injuries to persons or property occurring during arty Buyer Investigations or work dote on he Properly at Buyers direction prior to Chose Of Escrow. Sager is advised that cadain prolrctions may be afforded Seller by recording a "Notice of NoMtesponsibgity' (CAR Form NNR) for Buyer Investigations and work done on the Property at 78. TITLEuyAND VESTING:sr's direction, Buyers obligations under this paragraph shall survive the termination of this Agreement A. Within the time sponged In paragraph 19, Buyer shag be provided a current preliminary fife report CPrelminary Report), The Prelminary Report is only an offer by the title Insurer to issue a policy of title insurancs and may not contain every gem electing Its. Buyers review of the Preiminary Repot and any other matters which may affect title are a contingency of this Agreement as specified in paragraph 198. The company providing the Preliminary Report shag, prior to issuing a Preliminary Report conduct a search of the General Index for all Sellers except banks or other insfi utional lenders Selling properties they acquired through Ibreciosure (REOs), corporations, and government entities. Seller shag within 7 Days AflerAcoeptance,"Escrow Holder a completed StaNment of fillbMadan. B. Title is taken In its present condition subject to all encumbrances, easements, oovenants, conditions, restrictions, rights and other matters, whether of record or not, as of the date of Acceptance except for. 0) monetary liens of record (which Seller a obligated to pay off) unless Buyar is assuming those obligations or taking the Property subject to thaw obligations; and (11) those matters which Seller has agreed to remove M wrgng. C. Within the time specified in paragraph 19A, Seger has a duty to disclose to Buyer all matters (mown to Seger affecting fife, whether of record or not D. At Close Of Escrow, Buyer shag receive a grant deed conveying tide (o, for stock cooperative or long -tern lease, an assignment of stock certifieste or of Sasses leasehold Interest), including oil, minaret and water rights it currently owned by Seger. Title shall vest as designated in Buyers supplemental escrow Instructions. THE MANNER OF TAKING TITLE MAY HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES, CONSULT AN APPROPRIATE PROFESSIONAL - E. Buyer shat receive a Standard Coverage Ownaea CLTA policy of thta Insurance. An ALTA policy or the addition of endorsements may provide greater coverage for Buyer. A title company, at Buyers request can provide information about the availability, desirability, coverage, and cost of various tide haurarxe coverages and endorsements. t Buyer desires Pita coverage other than that required by this paragraph, Buyer shall instruct Escrow Holder in writing and shall pay any increase in cost 19. TIME PERIODS; REMOVAL OF CONTINGENCIES; CANCELLATION RIGHTS: The fallowing lima periods may only be s ctionded, atered, modified or changed by mutual written agreement Any removal of contingencies or cancellation under this paragraph by ether Buysv or Seller mast be exercised In good faith and in writing (CAR Form CR or CCj. A. SELLER HAS: 7 (or _ ) Days Afar Acceptance to Delivar to Buyer all Reports, dsrdasuras and information for which Safer is responsible under paragraphs 5A, 8, 7. 88(4), t t,% B, C, and F, 12A and 0, 13, IS& and 18A. Buyer after flat Delivering to Seger a Notice to Seger to Penton (CAR Farm NSP) may cancel this Agreement d'Seger has not Delivered the items within the erne specdied. B. (1) BUYER MS; 17 (or 30 ) Days AfterAcceptance, unless otherwise agreed in wriVng, to: 0) complete all Buyer Investigations; review all d'isdoeures, raparta, lease document& to he assumed by Buyer pursuant to paragraph 8B(4) and other applicable information, which Buyer receives from Seller, and approve all maters affecting the Property; and (lf) Deliver to Seller Signed Copies of Statutory and Lead Disclosures and other disclosures Delivered by Seger in accordance with paragraph 12A- (2) WI hin the time specified in paragraph 198(1), Buyer may request that Seller make repairs or take any other action regarding the Property (CAR. Form RR). Seger has no obligation to agree to or respond to (CAR. Form RRRR) Buyers requests. (3) By ice and of the time specified in paragraph 19B(1) (or as otherwise specified in this Agreement), Buyer shag Delver to Staler a removal of the applicable contingency or cancellation (CAR. Forth CR or CC) of this Agreement However, if any report, disclosure or information for which Seger is responsible is not Delivered within the time specified in paragraph 19A, then Buyer has 5 (or _ ) Days After Delivery of any such Nems, or the time specified in paragraph 196(1), whichever is later, to Delver to Sager a removal of the appliab Urgency or cancellation of this Agreement Buyer's Initials ( L Esters Initials RIPA RINSED 11N4 (PAGE 6 OF 11) E RESIDENTIAL, INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGES OF 11) areaheeawahapFanhiaWm +emecveem saeawk, ricer, wrapmheems r .ADlvdamm deq=.rswm Property Address: 6001 NOMM Shores Drive. Netvoort Beach, CA 92663 _ Data: June 30, 2015 (4) Continuation of Contingency: Even after the and of the time specified In paragraph 19B(i) and before Seiler cancels, if at ail, pursuant to paragraph I9C, Buyer retains the right, in writing, to either (t) remove remaining contingencies, or (n cancel this Agreement based on a remaining contingency. Once Buyers written removal of all contingencies is Delivered to Seller, Seller may not cancel this Agreement pursuant to paragraph 19C(1). C. SELLER RIGHT TO CANCEL: (1) Sager right to Catcall Buyer Contingencies: H, by the time specified in this Agreement, Buyer does not Deliver to Sailer a removal of the applicable contingency or cancellation of this Agreement then Seller, after first Delivering to Buyer a Notice to Buyer to Perform (CAFt Form NBP), may cancel this Agreement In sun event Seller shoo authorize the return of Buyers deposit, except for tees Incurred by Buyer. (2) Sellar right to Cancel, Buyer Contract Obligat ecaut; Seller, after first delivering to the Buyer a NBP, may cancel this Agreement if, by the time specified in this Agreement Buyer does not take the following action(*); (P) Deposit funds as required by paragraph 3A or 36 or if the funds deposited pursuant to paragraph 3A or 3B are not good when deposited: (6) Dewar a notice of FHA or VA costs or home as required by paragraph 31)(3) (CAR, Form FVA); fig) Deliver a lacer as required by paragraph w(1): (N) Deliver verification as requited by paragraph 3C or 3H or t Seller reasonably disapproves of the verification provided by paragraph 3C or 3H; (v) In writing assume or accept *sees or Iters specified in 884; (vl) Return Statutory and Lead Disclosures as required by paragraph I IA(2) and 12E; or (vii) Sign or inidel a separate liquidated damages form for an increased deposit as required by paragraphs 38 and 306; or (vile Provide evidence of authority to sign in a representative capacity as specified in paragraph 28. In such event Seger shall authorize the return of Buyer's deposit, except for fees Incurred by Buyer. D. NOTICE TO BUYER OR SELLER TO PERFORM: The NBP or NSP shalt (i) be in writing; (Ip be signed by the applicable Buyer or Seller, and (ii) give Its, other Party at least 2(or ) Days Agar Delivery (cur until the time specified in the appfieeble paragraph, whichever occurs last) to take the applicable action. A NBP or NSP may not be Delivered any $artier than 2 Days Prior to the ehgxhaton of the applicable time for Ste other Party to remove a conflogency or come! this Agmarrtant or must an obligation specified in paragraph 19. E. EFFECT OF BUYER'S REMOVAL OF CONTINGENCIES: if Buyer removes, in writing, any contingency or cancellation rights, unless otherwise specified in writing, Buyer shag conclusively be doomed to have: p) completed all Buyer Investigations, and review of reports and older applicable information and disclosures pertaining to that contingency or cancellation fight (6) elected to proceed with the hensection: and (ill) assumed all liability, responsibility and expense for Repairs or corrections pertaining to that contingency or Ce11C011 tion right orfor the inability to obtain financing F. CLOSE Of ESCROW: Before Buyer or Seller may cancel this Agreement for failure M the other Panty to dose escrow Pursuant to this Agreement Buyer or Seller must firth Deliver to the other Party a demand to close escrow (CAR. Foran DCE). The OCE shot: (1) be signed by the applicable Buyer or Sager, and Oil give the other Party at least 3 (or _) Days After Delivery to dose escrow. A DCE may not be Delivered any eadier than 3 Days Prior to the scheduled doss of escrow, G. EFFECT OF CANCEL A'nON ON DEPOSITS: If Buyer or Seller g'Nas written notice of cancellation pursuant to rights duly exercised under the terms of this Agreement the Partes agree to Sign mutual instructions to cancel the sate and escrow and release deposits, if any, to the party entitled to the funds, less fees and costs incurred by that party, Fees and costs may be payable to service providers and vendors for services and produces provided tludng escrow. Except as apecified below, release of funde will require mmual Signed release Instructions from the Parties, judlcld decision or arbitration sward. If either Party fails to exerxde mutual instructions to cancel escrow, one Party may make a wriden demand to Escrow Haider for the depeet (CAR. Form BDRD or SDRO). Escrow Holder, upon receipt shall promptly deliver notice of the demand to the other Party. It within 10 Days After Escrow Holder's notice, the other Parry does not objet to the demand, Escrow Holder shag disburse the deposit to the Party making the demand. If Escrow Holder complies with the preceding process, each Party shag be downed to have released Escrow Holder from any and all daft or liability related to the disbursd of the deposit Escrow Holder, at its diseetion, may nonetheless require mutual cancellation instructions. A Party may be subject to a oWd penalty of up to $1,g00 for rehual to sign can"NIM*n instructions H no good faith dispuf* exist^ sa m who Is auhtltlad to the deposited funds (Civil Coda 61061.3). 20. REPAIRS: Repairs shall be Completed prior to final verification of condition unless otherwise agreed In writing. Repairs to be performed at Sellers expense may be performed by Seiler or through others, provided that the work mmples with applicable Law, including governmental permit inspection and approval requiranents. Repairs shall be performed in a good, skillful manner with materials of quality and appearance comparable to existing materials. It is understood that exact maturation of appearance or cosmetic items following so Repairs may not be passible. Seier shalt (f) obtain invoices and paid remitols for Repairs performed by others. (t) prepare a written statement indicating the Repairs performed by Seller and the date of such Repairs; and(fill provide Copies of invoices and paid receipts and statements to Buyer prior to final verification of condition. M. ENVIRONMENTAL HAZARD CONSULTATION: Buyer and Seller acknowledge: (P) Federal, state, and local legislation Impose Malty upon existing and former owners and were of real property, in applicable situations, for certain legislatively defined, environmentally hazardous substances; (o) Broker(s) hasfhave made no representation conceming the applicability of any such Low to this transaction or to Buyer or to Seger, except as otherwise indicated in this Agreement (119 broker(s) has/have made no representation concerning the existence, testing, discovery, location and evaluation oUfor, mid risks posed by, environmentally hazardous substances, if any, located on or potentially affecting the Property; and till Buyer and Seller are each advised to consult with technical and legal experts concerning the exlstenoe, testing, discovery, location and evaluation ofHor, and risks posed by, environmentally hazardous substances, if any, located on or potentially affacdno the Property. 22. AMERICANS WITH DISABIL.RIES ACT: The Americans Vvith Disabilities Act ('ADA') prohibits discrimination against Individuals with disabilities. The ADA affects almost as commomiai facilMes and public 8C mmadations. Residential properties aha not typically covered by the ADA, but may be governed by its provisions If used for certain purposes. The ADA can require, among other things, that buildings be made readily accessble to the disabled. Different requirements apply to now construction, Alterations to existing bulkrmgs, and removal of barters in existing buildings. Compliance with the ADA may require significant costs. Monetary and injunctive remedies may be Incurred If the Property is not in mmpliance. A real estate broker does not he" the technical expertise to de*rtnine whether a building is in compfsnce with ADA requirements, or to advise a principal on those requirements, Buyer and Sailer are advised to contact an attorney. contractor, arch' $ eer or other qualified professional of Buyer or Sebes own choosing to determine to what degree, N any, the ADA impacts that prin ' r tis transaction. �i�/.,.�s�,/� &yars Initials ( h Sel ar's Initials (rt/r—�----�( h ^ RIPA REVISED 11114 (PAGE 7 OF 11) U RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 7 OF 11) saw Ma,Mce,h v+ah rpramxeM aplaali 78070 PIeaen Mir Rad, rraw,tt,ip'ron �re7e xar^.aPLaprren nwpstarw Property Address: 6001 Newport Shores OrIVe. Newport "each. CA 82663 Date: June 30.2015 23. FN4AL VERIFICATION OF CONDITION: Buyer stet have fits right m make a final verification of the Properly within 8 (or )Pays Prior to Close Of Escrow, NOT AS A CONTINGENCY OF THE SALE, but solely to confirm; (I) the Property is maintained pursuant toparagraph 16: (t) Repairs have been completed as agreed; and (94 Sailor las compiled with Seller's other obligations under this Agreement (C.A.R. Form VP). 14. PRORATIONS OF PROPERTY TAXES AND OTHER ITEMS: Unless otherwise agreed in writing, the following items shall be PAID CURRENT and prorated between Buyer and Seser as of Close Of Escrow real property laxer and assessments. interest rents. HOA regular, special, and emergency dues and assessments Imposed prior to Close Of Escrow, premirmts an insurance assumed by Buyer, payments on bards and assessments assumed by Buyer, and payments on Mello-Roos and other Spaniel Assessment Disbid bonds and assessments that are now a lien. The following dome shall be asaumed by Buyer WITHOUT CREDIT toward the purchase pica' prorated payments on Mello-koos and other Special Assessment District bonds and assessmerds and HOA special aeaessments that are now a lien but not yet due- Property will be reassessed upon charge of ownership. Any aupplemental rax bills she# be paid as follows. (q for peaode after Close Of Escrow, by Buyer; end (id) for periods prior to Close Of Escrow, by Seller (see CAR Form SFT or SBSA for further information) TAX BILLS ISSUED AFTER CLOSE OF ESCROW SHALL BE HANDLED DIRECTLY BETWEEN BUYER AND SELLER. Proretions shad be made based on a 30-day month. 19. SUCCESSORS AND ASSIONS: This Agreement shall be binding upon, and inure to the benefit of, Buyer and Seller and their respective successors and assigns, except as otherwise provided herein. 26, COPIES: Seiler and Buyer each represent that Copies of all reports, documents, certificates, approvals and other documents that are furnished to the otter are true, correct and unaltered Copies of the criginal docummu ter, tithe originals are in the possession of the furnishing party. 27. BROKERS: A. COMPENSATION: Sailer or Buyer, or both, as appficeblo, agrees to pay compensation to Broker as specified In a separate written agreement between Broker and that Serer or Buyer. Compensation is payable upon Close Of Escrow, or if escrow does not doss, as otherwise specified in the agreement between Broker and that Seiler or Buyer. ". SCOPE OF DUTY: Buyer and Seller acknowledge and agree that Broker. (S Does not decide what price Buyer should pay or Serer should accept (11) Does not guarantee the condition of the Prop"; (8i) Do" not guarantee Bre performance, adequacy or completeness of inspections, senvdoas, products or repairs provided or made by Suter or others; (w) Does not have an obligation to conduct an inspection of common areas or areas off the site of the Property; (v) Shall not be responsible for Identifying defects on the Property, in common areas, or of he unless such detects are visually observable by an inspection of reasonably accessible areas of the Property or are known to Broker, (vQ Shall not be responsible for inspecting public records or permits concerning the tide or use of Property; (vii) Shat not be responsible for Identifying the location of boundary lines or other Items affecting title; (At) Shall not be responsible for verifying square footage, representations of others or Information contained In Investigation reports, Multiple Listing Service, advertisements, flyers or other promotional material; (lot) Shall not be responsible far determining the fair market value of the Property or any personal property induded in the sole; (x) Shall not be responsible for providing legal or tax advice regarding any aspect of a transaction ordered into by Buyer or Seller, and (m) Shall not be responsible for providing other advice or information that exceeds the knowledge, education and experience required to perform real estate licensed activity. Buyer and Sellar agree to Seek legal, tax, insurance, title and other desired assistance from appropriate professionals. C. BROKERAGE: Neither Buyer nor Seller has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker (individual or corporate), agent finder, or other entity, other than as specified in this Agreement, in connection with any act rattling to the Property, including, but not limited to, inquiries, Introductions, consultations and negotiations loading to this Agreement Buyer and Seller each agree to Indemnify and hold the other, the Brokers specified herein and their agents, harmless from and against any costs, expenses or liability far compensation claimed inconsistent with the warranty and representation in this paragraph. 28. REPRESENTATIVE CAPACITY: If acre or more Parties is signing the Agreement in a representative capacity and not for hbNherseff as an individual then that Party shall so Indicate in paragraph 40 or 41 and attach a Representative Capacity Signature Disclosure (CAR Foran RCSD). Wherever the sigrrahrre or initials of rhe representative identified in the RCSD appear on the Agreement or any related documents, it shall be deemed to be in a representative Capacity for the entity described and not in an individual capacity, unless otherwisa indicated. The Party acting in a representative capacity (1) represents that the entity for which that pally Is acting already exists and (II) shag Delver to the other Party and Escrow Holder, within 3 Days After Acceptance, evidence of authority to act in that cap&* (such as but not limited Im applicable porion of the tout or Certification Of Trust (Probate Cade § 18100.5), letters testamentary, court order, power of attorney, corporate resolution, or formation documents of the business entity). 29. JOINT ESCROW INSTRUCTIONS TO ESCROW HOLUM, A. The following parogrepha, or applicable pardons thereof, of this Agreement consighdo the joint escrow instructions of Buyer and Seller to Escrow Holder, which Escrow Holder is to use along with any related counter aFers and addenda, and any additional mutual insWtlions to close the escrow. paragraphs 1, 3, 4% 5A, 6, 7, 9, 11 C, 18, 19G, 24, 27A, 28, 29, 35, 38, 39, 40, 41 and paragraph D of the Section tilled Real Estate Brokers an page 11. K a Copy of the separate compensation agreements) provided for in paragraph 27A or paragraph 0 of the section Otad Real Estate Brokers an page 11 is deposited with Escrow Halder by Broker, Escrow Holder shall accept such agreement(a) and pay out from Buyers or Sellers funds, or both, as applicable, the Broker's compensation provided for in such agreements). The temps and conrditions of this Agreement not set fork in the specified paragraphs are additional matters for the Information of Escrow Hokler, but about which Escrow Holder need not he concerned. Buyer and Seller will receive Escrow Holder's general provisions, t any, directly from Escrow Holder and will execute such provisions within the time sPodfied in paragraph 7C(1)(c). To the extent the gerteral provisions are inconaietent or conflict With this Agreement the general provisions will control as to the duties and obligations of Escrow Halder only. Buyer and Seller will execute additional instructions, documents and tams provided by Escrow Holder that are reasonably necessary to doss the escrow and, as directed by Escrow Holder, shall pay to Escrow Holter or HOA or HOA management company or others any fee required by paragraphs 7.11 or elsewhere in the Agreement B. A Copy of this Agreement including any counter oder(s) and addenda shat be delivered to Escrow Holder within 3 Days After Acceptance (or I. Buyer and Serer authorize Eaaow Holder to accept and rely on Copies and Signatures as defined in this Agreement as originals, to open asrraw and fa other purposes of escrow. The validity of Chia Agreement as between Buyer and Seger Is not affected by whetter or when Escrow Holder Signs ft Agreement Escrow Holler shat provide Sellers Statement of Information to Title company when received from Seller. If Seller delivers an affidavit to Escrow Holder to satisfy Sellers FIRPTA obligation ureter paragraph 11C, Escrow Holder shall deliver to Buyer a Qualified Substitute statement that cornplies with federal Lew. C. Brokers are a any to the escrow for the eels purpose of compensation pursuant to paragraph 27A and paragraph D of the section titled Real Brokers on page it. Buyer and Seger irrevocably assign to Brokers compensation specified in paragraph 27q and inobucl Escrow Holderra disburse those funds to Brokers at Close Of Escrow or nil t0 any Buyers initials ( ( 1 Sseers Initials ( ( 1 RIPA REM ED1114(P E3OF11) „ RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 8 OF 11) Pf6d a walapFomabyrrpLadrt IW70FMa MMRme.Fr ..MkbNM40M �„�js nFryMSDrs Property Address: 8001 Newourt Shores Drive, Newmont Beach. CA 92883 Date: June 30.2015 other mutually executed cancellation agreement Compensation instructions can be amended or revoked only with tha written =,sent Of Brokers. Buyer and Seller shall release and hold harmless Escrow Holder from any itability reaulting from Escrow Holder's payment to Broko0s) of compensation pursuant to this Agreement D. Upon receipt, Escrow Holder shall provide Seller and Sellers Broker verification or Buyers deposit of runds pursuant to paragraph 3A and 3B. Once Escrow Halder becomes aware of any of the following, Escrow Holler &hall immediately notify an Brokers, (Q if Buyers initial or any additional deposit or down payment is not made pursuant to this Agreement, Or is not good at cons of deposit with Esonnv Holder, or (IQ If Buyer and Sager instruct Escrow Holder to canoe) escrow. E A Copy of any amendment that aifaots any paregreph of this Agreement for which Escrow Holder is responsible shall be delivered to Escrow Holderwirhin 3 Days after mutual execution of the amendment 30. REMED165 FOR BUYER'S BREACH OF CONTRACT: A. Any clause added by the parties specifying a remedy (such m release or forfeiture of depoeh or making a deposit non• refundable) for failure of Buyer to complete the purchase in violation of this Agreement shag be deemed Invalid unim the clause Independently aatufles ire statutory liquidated damages requirements satiorth N the Civil Code. B. LIQUIDATED DAMAGES: If Buyer hila to complete this purchase because of Buyer's defauk, Seger shall retain, as liquidated damage., the deposit actually paid. If the Property Is a dwelling with no mora than four units, one of which Buyer Intends to occupy, then the amount retained shag be no more than 3% of the purchase price. Any excess than be returned to Buyer. Release of funds will require mutual, Signed release haebuctiom from both Buyer and Seger, judicial decision or arbitration award. AT TIME OF ANY INCREASED DEPOSIT, BUYER AND SELLER SHALL SIGN A SEPARATE LIQUIDATED DAMAGES PROVISION INCORPORATING THE lNe EPOSfT AS LIQUIDATED DAMAGES (CAR. FORM RID). Sayers Initials Sellers Initial$ 1 31. DISPUTE RESOLUTION: A. MEDIATION: The Parties agree to mediate any dispute or daim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action through the CAR. Consumer Mediation Center (www. cansums... latlon.ang) or through any other mediation crovidar or service mutually agreed to by the Parties, The Parties also agree to mediate any disputes or clatm s with Broker(s), who, In writing, agree te such mediation prior to, or within a reasonable time after, 1ha disputa or ckdm is presented to tits Broker. Mediation fees, if any, chain be divided equally among the Parties involved. M, for any dispute or daim to which 8tb paragraph applies, any Party () commences an action without first attempting to resolve the matter through mediation, or (10 before commentxment of an salon, reanaes to mediate after a request has been made, then that Party shall not be entitled to recover attorney face, even if they would otherwise be available to that Party in any such action. THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED. Excluslons from this mediation agreement are specified in paragraph 31C. B. ARBITRATION OF DISPUTES: The Parties agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting 7ansaclion, which is not saMed through mediation, shall be decided by neutral, binding arbitration. The Parties also agreo to etbitrata any disputes or claims with Broker(s), who, In wrlung, agree to such arbitration prior to, or within a reasonable time after, the dispute or claim is presented to the Broker. The arbthator shall be a retired judge or justice, or an attorney with at (east 5 years of residential real estate Law experience, unless the parties mutually agnea to a di Parent arbitrator. The Parties shall have the right to discovery in accordance whh Code of Civ, Procedure §1283.05. In all other respects, the arbitration shall be conducted In accordance with Tills 8 of Part 3 of the Code of Civil Procedure. Judgment upon the award of the arbhrator(s) may be entered into any court having jurisdiction. Enforeemocitt of this agreement to arbitrate shall be governed by the Federal Arbitration AcL Exclusions from this arbftrardon agreement are specified In paragraph 31C. "NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GMNG UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION, IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CML PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.' 'WE HAVE HEAD AND UNDERSTAIJO THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE;XPITRA71ON OF DISPUTES' PROVISION TO NEUTRAL ARBITRATION.- Buyers Inft1ah; ! Sellers Initials Z)/ C. ADDITIONAL MEDIA"ON AND ARBITRATION TERMS: (1) EXCLUSIONS: Thu htfiowing matters aha excluded from mediation and arbitration: (Q a judicial or non4udl ai foreclosure or otlwr action Or P/Oeeadklg to enforce a dead of Duret mortgage or htstetknem land sate contract as defined in CFM Code Jason; fd) an unlawful detalter action• and (R) any nor r*M lawW& the jurbdWm of a pmbom, amM ebinw or bmkruptcy tour. (2) PRESERVATION OF ACTIONS: The following than not conatihde a waiver nor violation of the mediation and arbftradon provisions: (I) the Sang of a court action to preserve a statute of lunitationa; in the Poing of a court action in anahm the recording of a notice or pending action, for order of attachment receivership, injunction, or other previsional remedies; or (it!) the Ming of a mochenic'e gem (3) BROKERS:kers span not be obligated nor compelled to needdate or anisate unless they agree to do so in writing. Any B participating In mediation or arbitration shag not be doomed a party to the Agreement B ars Initiate ( l Sellers Initials ( _j( RIA REVISED 11 14 (PAGE 9 OF 11) u it RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 9 OF 11) noacaa„+a rsramear apau.+mtc Rbh�ra. acre, r,.,or, rawp.,+eox ®. a,.e'..a..e Property Address: 6001 Newport Shores Drfye, Newport Beach, CA 92663 Date; Jure 30, 2015 32. SELECTION OF SERVICE PROVIDERS: Brokers do not guarantee the performance of any vendors, service or product providers ("Providers'), whether retained by Broker or selected by Buyer. Seger or other person. Buyer and Seller may select ANY Providers of their mem choosing. 33. MULTIPLE LISTING SERVICE ("sIL6"): Brokers are authorized to report to the MLS a pending sale and, upon Close Of Eeaow, the sates price and other tarts of this transaction shall be provided to the MLS to be published and disseminated to persons and entities authorked to use the information on terms approved by the MLS. 34. ATTORNEY FEES: in any action, promedsrg, or arbitration between Buyer and Sdar arising out of this Agreement the prevaling Buyer or Seller GW be entitled to reasonable attorneys tees and coats from the nonprevadng Buyer or Seger, except as provided in paragraph 31A 36. ASSIGNMENT. Buyer shall not assign all or any part of Buyer's inEemal in this Agreement without first having obtained the written consent of Seger. Such consent shall not be unreasonably withhold unless otherwise agreed In writing. Any total or partial assignment shall not relieve Buyer of Buyer's obligations pursuant to this Agreement unless otherwise agreed in wiring by Sager (C.AR. Form AOAA). 36. EQUAL HOUSING OPPORTUNITY; The Property is sold in compliance will, federal, state and local anti-disctiminegan Laws. 37. TERMS AND CONDITIONS OF OFFER; This is an offer to purchase the Property an the above mamma and conditions. The liquidated damages paragraph or the arbitration of disputes Paragraph is Incorporated in this Agreement t initialed by ell Parties or it incorporated by mutual agreement in a counter offer or addendum. if at least one but not all Parties initial, a counter offer is required until agreement IS reached. Seger has the right to continue to offer the Property for safe and to accept any other after at any time prior to notification of Acceptance, Buyer has read and acknowledges receipt of a Copy of the offer and agrees to the confirmation of agency relationships. If this offer is accepted and Buyer subsequently defaults, Buyer may be responsible for payment of Brokers' compensation. This Agreement and any supplement addendum or modification, including any Copy, may be Signed in two or more counterparts, all of which shag constibute one and the same writing. 36. TIME OF ESSENCE; ENTIRE CONTRACT; CHANGES: Time to of the essanrz Ali understandings behveen the Partes are incorporated in this Agreement Its lemma are intended by the Partes as a final, complete and exclusive expression of their Agreement with respect to its Subject matter, and may not be Contradicted by evidence of any prior agreement or contemporaneous oral agreement If any provision of this Agreement is hold to be ineffective or invalid, the remaining provisions will nevertheless he given fug face and affect Except as otherwise specified, this Agreement shag be Interpreted and disputes shag be resolved in accordance Wit the Laws of ft State of California. Neither this Agreement nor any Provision in It may he axianded, amended, moditled, aftered or changed, except In writing Signed try Buyer and Seger. 39. DEFINITIONS: As used in tido Agreement A. "Acceptance" means the time the offer or trial counter offer is accepted in writing by a Party and is delivered to and personally received by the otter Party or that Pary'a authorized agent in eocerdanoe with the terms at this offeror a final counter offer S. "Agreement" means this document and any counter offers and arty incorporated addenda, collectively forming the binding agreement between the Pardes. Addenda are incorporated only when Signed by all Partes. C. "CA.FL Form' means the most current version of the specific form referenced or another comparable forth agreed to by titre parties. D. "Close OF Escrow" or "COEn means the date the grant dead, ar other evidence of transfer N one, is recorded. E. "Copy" means copy by any means including photocopy, NCR, facsintle and electronic. F. "Oaya" metre Calendar days. However, after Acceptance, the lest Day for performance of any ed required by this Agreement (including pose Of Escrow) shall not include any Saturday, Sunday, or legal trofiday and shag Instead be the next Day. G. "Days Alter" means the Specified number of calendar days after the occurrence of the event specified, not counting the calender date an which the specified event occurs, and ending at 11 ,6a PM on the final day. H. "Days Prior' means the specified number of calendar days before the occurrence of the event specified, not counting the calendar dabs on which the spociaed event is scheduled to oa;ur. I. "Deliver", "Degvemd" or "DhrINW, unless otherwise specified in writing, means and shall be effective upon: personal receipt by Buyer or Seger or the individual Real Estate Licensee for that principal as specified in the section tilled Real Estate Brokers on Paget 1, regardless of the method used (i.e., messenger, mag, emali, fax, other). J. "Electronic Copy" or "Electronic Signature" means, as applicable, an electronk Copy or signature complying with California Law. Buyer and Sellar agrea that sleotonio means win rat be used by either Party to modify or after the content a integrity of this Agreement without the knowledge and consent of the other Party. K. uLawP means any law, Code, statute, ordinance, regulation, nils or order, which Is adopted by a controffng city, county, state or federal leglalative, Judicial or executive body or agency. L "Repairs" means any mpalm (including past control), otarations, replacements, modifications or retrofitting of the Properly provided for under this Agreement. M. "Signed" means ether a handwritten or electronic signature on an original document Copy or any counterpart. e0. EXPIRATION OF OFFER: This offer shall be deemed revoked and the deposit, it any, shall be returned to Buyer unless the offer is Signed by Seger and a Copy of the Signed offer Is personally received by Buyer, or by ,who is authorized to receive t, by 5:60 PM on the third Day after this offer is Signed by Buyer (or by AM/ PM, an U One or more Buyers is signing the 6cmement in a representative capacity and not for tiendhameif as an individual. See attached Representative Capacity Signature Diad AR. Form RCSD for additional terms. R) Date 7/2/15 BUYER �- -�--� (Print name) Community Dere'toi anent Partners Date BUYER (Print name) ❑Additonal Signature Addendum attached (CAR. Farm ASA). Sellers In Nets RIPA REVISED 11114 (PAGE 10 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 10 OF 11)°'" "m Pr"duwdee,4pFamabyripL"yx1aWSFinee mmftae,FiwrWMO"m4BM ymrd ri.FPm ,.,v Property Address: 6001 Newport Shores Onye, Newport Baach CA 92663 Date: lune 30.2013 41. ACCEPTANCE OF OFFER: Sager warrants that Seller is the owner of the Property, or hag the authority to execute this Agreement Seiler accepts the above offer and agrees to seg the Property on the above terms and conditions, and agrees to the above codrmation of agency raktorhships. Seiler has read and acknowledges receipt of a Copy of this Agreement, and authorizes Broker to Deliver a Signed Copy to Buyer. ❑ (If checked) SELLERS ACCEPTANCE IS SUBJECT TO ATTACHED COUNTER OFFER (CAR Form SCO or SMCO) DATED: ❑ One or more Setters is signing the Agreement in a representative capacity arta net for hlmMerseif as an Individual. See attached Represen� tativeCapacirySignalure ' osuw(C�R,foRRCSD)for additional terms. Date .J -A6 SELLER ,p'1.G1/ (Print name) Foley, Clint -aA ,V dicie Date SELLER (Print name) ❑ Ad ' Si re Addendum attached (CAR, FOIm ASA). (Do no! Mitlal ff mating a eeuhrler offer.) CONFIRMATION OF ACCE AN E: of 5' hrd Aceop woo personalty received by Buyer w Buyer's authonaed agent On (data) V et!'_ �] AM/M. A binding Agreemerrt ie kneeled when a Copy of Signed Acc te y receh y Buyer B ore authorized agent hahethar or not corlflrtnad in thio decrmront CompM 'on oflhte conflmnatlon M not legally required M order to create o binding Agreement; It k amity fnMndad to evidence the date (hat Conflrnetlon of Acdepmnca has occurred. REAL ESTATE BROKERS: A. Real ESUIS B►okere are not parties to the Agreement between Buyer and Seller. B. Agency relationships are confirmed as stated in paragraph 2 C. If specified in paragraph 3A(2), Agent who submitted the offer for Buyer acknowledges receipt of deposit A COOPERATING BROKER COMPENSATION: Listing Broker agrees to pay Cooperating Broker (Selling Firm) and Cooperating Broker agrees to accept, Out Of Listing Brokers proceeds in escrow, the amount specified in the MLS, provided Cooperating Broker Is a Participant of the MLS in which the Property Is offered for sale or a reciprocal MLS. if Listing Broker and Cooperating Broker are not both Participants of the MLS, or a reciprocal MLS, in which ft Property M offered for Sale, then compensation must be specified in a separate written agreement (C.A.R. Form CBC). Declaration of License and Tax (C.AR. Form DLT) may be used to document that tarn reporting -MR be required or that an exemption exists. Real Estate Broker (Soling Finn) Badradfa Raul Eafate Arivlaors Inc. CaIBRE Lic. #1931050 BY an rom I Cs BR a 72129 Die _ By CaIBRE Lia # Date494 U. Ad a CityNe)vport Beach State _ i MW Telephone /909)223-0606 aX E -trill steye26romhaf(�Agraadia.com Real Eslate Broker (Listing Firm) Berkaa&a Reef Inc. CaISRE Lic. #1931050 BY en C. B mbar B E Llc. # 9721 Date BY CaIBRE Lia If Dai Ad Birch Suite C(ty Beall State > "660 Telephone aX 2230817 E-maR aseven.brom ra.com ESCROW HOLDER ACKNOWLEDONMY-. Escrow Holder admoWedges receipt of a Copy of this Agreement, Cd checked, ❑ a deposit in the amount of $ ), counter offer numbers ❑ Seders Statement of Irdormatton and and agreas to ac as Escrow Holder subject to paragraph 29 of this Agreement, any Supplemental escrow hwUkations and Terms o r's gEmm Holdeeneral provisions. Escrow Holder is advised that the date of Confirmation of Acceptance of the Agreement as between Buyer and Seller is Escrow Holder Enrmi BY Date Address PhorhelFaxlEHnall Escrow Holder hes the following license nurntw S DD a part ' vis n t of aakhese Oversight, ❑ pepenot eht W Inslranoe, aureau of Real Estate. PRESENTATION OF OFFER (_ _.. _ � Listing Broker presented lihis offer to Seiler on (dale). arokm oro es maws REJECTION OF OFFER: ( )L No counter after Is being made. This offer was rejected by Seller on (date). 02e14, Cdf in++ Aseeeaem er REALTORSO, kw United Settee WrAtilhc law (TNM tT U.S. Cede) fa bib the mave,wbrra dpb3rww,, dwphey sirs rmr,, a arty portion therw( by ptudompy rrmrhirha m airy cher means, kldudng Molmrs aaemptnenlred fmnlatl THIS FORM HAS 909N APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORSa (CAR.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE CONSULT AN APPROPRIATE PROFESSIONAL P""aired mho Diehibaled by Buyera Admowfedperst page 10 is part of e REALESTATEBUSINESSSERVICES, INC. this Agreement( )( ) c esp6eldw of No CALIFORNIA ASSOCIATION OF REALTORS® 525 Sandh Argh Avenue. Lor AnUdes, Celifomle sW10 Reviewed RIPA REVISED 11114 (PAGE 1 11) [So olwrwOcyadPsS RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 11 OF 11) PrW,aed WtlhxpCwn,abr>ipLop41e07e FdaarMb Reed. Frau. aNdiMYNBOte slmulauaaarm a.ep.pswrw CALIFORNIA ASSOCIATION BUYER'S INSPECTION ADVISORY N OF R.EAL-[ORSa (CA.R. Farm BUt, Rebleed 1IM4) Property Address: BOOP Nawnort Shores Drive. Newport Beach CA 92883 ("Property'). 1. IMPORTANCE OF PROPERTY INVESTIGATION: The physical condition Of the land and Improvements being purchased is not guaranteed by either Seller or Brokers_ You have an affirmative duty to exere se reasonable rare to protect yourself, including discovery of the legal, practical and technical implications Of disclosed fads, and the investigsilcn and verification of information and fads that you know w that are within your diligent attention and observation. A general physical Inspection typically does not cover all aspects of the Property nor items affecting the Properly that are not physically located on the Property. K the professionals recommend further investigations, including a recommendation by a pest control operator to inspect Inaccessible areas of the Property, you should contact qualified experts to conduct such additional Investigations. 2. BROKER OBLIGATIONS: Brokers do not have expertise in all areas and therefore cannot advise you on many items, such as those listed below. If Burka gives you referrals to professionals, Broker does not guarantee their performance. S. YOU ARE STRONGLY ADVISED TO aNESTIGATE THE CONDITION AND SUITABILITY OF ALL ASPECTS OF THE PROPERTY, INCLUDING BUT NOT LUBITEOT'O THE FOLLOVNNG, IFYOU DO NOTDOSO,YOU AREACTINGAGAWT'THE ADVICE OF BROKERS. A. GENERAL CONDITION OF THE PROPERTY, ITS SYSTEMS AND COMPONENTS: Foundation, roof (oond'dion, age, leaks, useful life), plumbing, heating, air conditioning, electrical, mechanical, security, pooVsps (tracts, leaks, operation), other structural and nonstructural systems and Components, fixtures, built-in appliances, any personal property included in the sale, and energy elTidency of the Property. B, SQUARE FOOTAGE, AGE, BOUNDARIES: Square footage, room dimensions, lot size, age of improvements and boundaries. Any numerical statemems regarding these items are APPROXIMATIONS ONLY and have not been vertfled by Seller and cannot be verified by Brokers. Fences, hedges, walls, retaining wags and other barriers or markers do not necessarily Identify true Property boundaries, C. WOOD DESTROYING PEST& Presence of, or conditions likely to lead to the presence of wood destroying pests and Organisms. D. SOIL STABILITY: Exrdence of fill or compacted soil expansive or contracting soil, susceptibility, to slippage, settling or movement, and the adequacy of drainage. E. WATER AND UTILITIES; WELL SYSTEMS AND COMPONENTS;WASTE DISPOSAL: Water and utility. availability, use restrictions and Costs. Water quality, adequacy, Condition, and performance of well systems and components. The type, size, adequacy, capacity and condition of sewer and septic systems and components, connection to sewer, and applicable fees, F. ENVIRONMENTAL HAZARDS: Potential environmental hazards, including, but not limited to, asbestos, lead-based paint and other lead Contamination, radon, methane, other gases, fuel oil or Chemical storage tanks, contaminated soil or water, hazardous waste, waste disposal sites, electromagnetic fields, nuclear sources, and other substances, materials, products, or Conditions gncuding maid (airborne, tock or cithenvlae), fungus or similar Contaminants). G. EARTHQUAKES AND FIAOOMO:SUstx+ptibhfityofthe Property tohazards andpropensityof the Property toflood. H. FIRE, HAZARD AND OTTHBR INSURANCE: The availability and cost of necessary or desired Insurance may very. The location of the Property in a seismic, flood or fire hazard zona, and other Conditions, such as the age Of the Property and the claims history of the Property and Buyer. may aged the availability and need for certain types of insurance. Buyer Should explore Insurance options early as this information may affect other decisions, Including the removal of loan and inspection contlngendea L BUILDING PERMITS, ZONING AND GOVERNMENTAL REQUIREMENTS: Permits, inspections, cerOficates, zoning, other governmental limitations, restrictions, and regrriremerda affecting the cement or future use of the Property, its development or size. J. RENTAL PROPERTY RESTRICTIONS: Some Cities and counties impose restrictions that limit this amount of ran that ran be Charged, the maximum number of occupems, and the right of a landlord to terminate a tenancy. Oeedbdt or Other btlts and sedln ly systems for doors and windows, Including window bars, should be examined to determine whether they satisfy legal requkemenLa K. SECURITY AND SAFETY: State and local Law may require the installation of barriers, access alarms, self -latching mechanisms and/or other measures to decrease the risk to children and other persons of existing swimming pods and hot tubs, as well as various fire safety and other measures concerning other features of the Property. L NEIGHBORHOOD, AREA, SUBDIVISION CONDITIONS; PERSONAL FACTORS: Neighborhood or area conditions, including schools, law entwcament, crime statistics, registered felons or offenders, fire protection, other government services, availability, adequacy and Cost of Internet Connections or other technology services and installations, Oommercw, industrial or agricultural activities. existing and proposed transportation, oonstruction and development that may affect noise, view, or traffic, airport noise, noise or odor from any source, wild and domestic animals, other nuisances, hazards, or circumstances, protected species, wetland propertles, botanical diseases, historic Or other governmentally protected sites or Improvements, cemeteries, fadlittes and condition of common areae of common Interest subdivisions, and possible lads of compliance V th any governing documents or Homeowners' Association requirements, Conditions and influences of Significance to certain cultures and/or religions, V personal needs, requirements and preferences of Buyer. By slgning on acknowledge that they have mad, understand, aeeept and have received a Copy of this Advisory. Buyers are lied to read h carefulty. Buyer Buyer cWMftV" bOevrvep~tPerUrAra 0 PubEBW and a REAL ESTATI e auorrSM 0) ` , 526 South Vhf BIA REVISED 11M THIS FORM WAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS* (CAR). NO ITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS TRANSACTIONS. IF YOU DESIRE LEO&OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL Radexed by Oale Toasa 1 BUYER'S INSPECTION ADVISORY (BIA PAGE 1 OF' roehK,dlsea,,sw.M*N..r.: sw,CAMM phm :w.raons 10 CALIFORNIA ASSOCIATION I�r OF REALTORS® ADDENDUM (CAP. Foran ADM, Revised 4112) No. 1 The following terms and conditions are he incorporated in and made a of the: ❑ Residential Purchase Agreement, E] Manufactured Hone Purchase Agreement part Business P=hase Agreement, ❑ Residential Lease or MonthAo-MaMh Rental Agreement, ❑ Vacant Land Purchase Agreement, Q& Residential Income Property Purchase Agreement, ❑ Commercial Property Purchase Agreement, ❑ Other . on property unown as rN mnwer a.ommursrsr uerwodAmtNmr7rmt IS rererre0 to as (-Ower/Tenant") and Foray, s1 or, is referred to as CSaller/Lendlord'1. The foregoing terms and conditions are hereby agreed to, and the undersigned admowledge nwWPt of a copy of this document Dane 7/2/15 / .0 Buyer/Tenant zw= -^ gu Wrenant Date SeAer/i.andlo «� SellentAndlord Tim WW OK lawn or Sn UrAbd SWISS (Tse 17 LLS. COM)1QMW M WWthadrrd tapmdadkn of IMS I=, many wdm #mud, M p Ww" mad irm a airy odrer rtman0. hcddnd fook9a wwaStAwt d Nnaak. Coyyriakl01OW2a12, GALIFOMIAAMO ATION OF RFALTORSO. INC. ALL ROM RESERVED. THIS PORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORSO (C.AP.)• NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADGOVACV OF ANY PPOYIWON IN ANY aPSOarO TRANSACTION. A Rdx SGTAM IRONER 1S THE PERSON OVAURED TO AVVNIG ON n GSTATA TRANSACTIONS. If YOU DESIRE LEGAL OR TAX AWAG�E, C�O.N.SULT AN APPROPRIATE PROFESSIONAL TNS (SSS IS s elaae la an WM acme ImY wtae IP&Wy. R b Trot h4m,dd IS klan y the „Ser m a REALTORP REALTOPM IS a replawod cclwtlw menbvRMp mwk ahldl may be vadww SY M&PO R offs NATIONAL ASSOCIATION OF REALTORSawho atbRrNe bRs Cods ore1*& t REALESTTATAT to a.Am ray. A REAL EE BIISME99 SERVICES, INC, e evdOtfefyalM CemambAmtleawl aReALrarstp � s eSUSMMVNW AvWue, Lw Arg*% CaWwft 6003E R% -m dey_Oft SSS ADM REVISED 4112 (PAGE 1 OF 1) ADDENDUM (ADM PAGE 1 OF 1) Saiaaa TW 6WSAAwbuw.kwlwespswt Sw+W dlaaak,k sawkdw.alla FSewrsawwwb G9Da0 Paan: M.3ri.rior FaK as1.31AariT NwmwO>as.w CALIF O R N I A DISCLOSURE REGARDING A S S .0 IAT (ON REAL ESTATE AGENCY RELATIONSHIP %r OF R E A L T O R S A (Selling Firm to Buyer) (As required by the Civil Code) (C.A.R. Form AD, Revised 12114) ❑ (If checked) This form is being provided in connection with a transaction for a leasehold interest exceeding one year as per Civil Code section 2079.13(k) and (m), When you enter into a discussion with a real estate agent regarding a real estate transaction you should from the outset understand what type of agency relationship or representation you wish to have with the agent in the transaction. SELLER'S AGENT A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmative obligations To the Seller A Fiduciary duty of utmost care, integrity honesty and loyalty in dealings with the Seller. To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agents duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. An agent is not obligated to reveal to either parry any confidential information obtained from the other party that does not involve the affirmative duties set forth above. BUYER'S AGENT A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situations, the agent is not the Seller's agent.. even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Seller. An agent acting only for a Buyer has the following affirmative obligations To the Buyer. A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer. To the Buyer and the Seller. (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith, (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to. or within the diligent attention and observation ofthe parties. An agent is not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer (a) A fiduciary duty of utmost care,. integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above in their respective sections. In representing both Seller and Buyer, the agent may not, without the express permission of the respective party. disclose to the other party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. The above duties of the agent in a real estate transaction do not relieve Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Throughout your real property transaction you may receive more than one'disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relationship to present you with this disclosure form. You should read Its contents each time it Is presented to you, considering the relationship between you and the real estate agent in your specific transaction. This disclosure form includes the provisions of Sections 2079.13 to 2079.24, Inclusive, of the Civil Code set forth on page 2. Read it carefully. IME ACKNOWLEDGE RXCEJIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CIVIL CODE PRINTEbION THUACK (OR A SEPARATE A f:). Buyer Seller Landlord❑Tenant — Date 7/2/15 C 0evebpnentPMnen ❑Buyer Seller 0 Landlord❑Tenant Date^�- AgentBerkadia Real Estate Advisors Inc. BRE Uc. # 1931050 B � al�eO irm) —�— Y i�1"t BRE Lio. # 972129 Date (Salesperson or Broker -Assn late) Steven C. Bromhar Agency Disclosure Compliance (Civil Code §2079.14) • When the listing brokerage company also represents Buyerrrenant The Listing Agent shall have one AD form signed by Seller1andlord and a different AD form signed by BuyerfTenant. • When Seller/Landlord and Buyer/Tenant are represented by different brokerage companies. (i) the Listing Agent shall have one AD form signed by SellerfLandlord and (it) the Buyer'sfrenam's Agent shall have one AD form signed by Buyerrrenam and either that same or a different AD form presented to Selledl-andlord for signature prior to presentation of the offer. If the same form Is used. Seller may sign here. Seller/Landlord Date Seller/Landlord pate The copyright laws of the United States (Title 17 U.S. Code) forbid the unauthorized reproduction of this form, or any portion thereof, by photocopy machine or any other means, including facsimNe or computerized formats. Copyright 01991.2010, CALIFORNIA ASSOCIATION OF REALTORS®, INC. Reviewed by_Date ALL RIGHTS RESERVED.mw.+eww AD REVISED 12114 (PAGE 1 OF 2) DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP 1AID PAGE 1 OF 2 BerMatlis awl Oaale Advbars.lae. Newport Owe0.5600 Skeh Sheet, Suite 4M Newpon aeet0,CA9z860 Phone N91 1 N Fee 919.221.0617 Nmpoet Sborw Steven Bre 1 Produced vriW 9pFarm® by zipLogte 10070 FMsen Mile Reed Fraser. MichiGan 48076 ~A01 -au X mm CIVIL CODE SECTIONS 2079.24 (2079.16 APPEARS ON THE FRONT) 2079.13 As used in Sections 2079.14 to 2079.24, inclusive, the following terms have the following meanings: (a)'Agent' means a person soling under provisions of Title 9 (commencing with Section 2295) in a real property transaction, and Includes a person who is licensed as a real estate bmker under Chapter 3 (commencing with Section 10130) of Pan 1 of Division 4 of the Business and Professions Code, and under whose license a listing is executed or an offer to purchase is obtained. (b) 'Associate licensee' means a person who is licensed as a real estate broker or salesperson under Chapter 3 (commencing with Section 10130) of Pan 1 of Division 4 of the Business and Professions Code and who is either licensed under a broker or has entered into a written contract with a broker to act as the brokers agent In connection with acts requiring a real estate license and to function under the brokers supervision in the capacity of an associate licensee. The agent in the real property transaction bears responsibility for his or her associate licensees who perform as agents of the agent When an associate licensee owes a duty to any principal, or to any buyer or seller who is not a principal, in a real property transaction, that duty is equivalent to the duty owed to that party by the broker for whom the associate licenses functions. (c)'Buyer' means a transferee in a reel property transaction, and includes a person who executes an offer to purchase reel property from a sailer thmugh an agent, or who seeks the services of an agent in more than a casual, transitory, or preliminary manner, with the object of entering into areal property transaction. 'Buyer' includes vendee or lessee. (d) 'Commercial real property' means all real property in the slate, except single-family residential real property. dwelling units made subject to Chapter 2 (commencing with Section 1940) of Titre 5, mobilehomes, as defined in Section 798.3, or mersafional vehicles, as defined in Section 799.29. (a)'Dual agent' means an agent acting, either directly or through an associate licensee, as agent for both the seller and the buyer in a real property transaction. (f) "Listing agreement' means a contract between an owner of real property and an agent, by which the agent has been authorized to sell the real property or to And or obtain a buyer. (g)'Listing agent" means a person who has obtained a listing of real property to act as an agent for compensation. (h)'Listing once' is the amount expressed in dollars specified in the listing for which the seller is willing to sell the real property through the listing agent. (i) "Offering price is the amount expressed in dollars specified in an after to purchase for which the buyer is willing to buy the mat property. 0)'Offer to purchase' means a written contract executed by a buyer acting through a selling agent that becomes the contract for the sale of the real property upon acceptance by the seller, (k)'Real pmperty' means any estate specified by subdivision (1) or (2) of Section 761 in property that Constitutes or is improved with one to four dwelling units, any commercial real property, any leasehold in these types of property exceeding one years duration, and mobllehomes, when offered for sale or sold through an agent pursuant to the authority contained in Section 101316 of the Business and Professions Code. (Q 'Real property transaction" means a transaction for the sale of real property in which an agent is employed by one or more of the principals to act In that transaction, and includes a listing or an offer to purchase. (m)'Sefl," 'sale,' or'sold' refers to a transaction for the transfer of real property from the seller to the buyer, and includes exchanges of real property between the seller and buyer, transactions for the creation of a real property sales contract within the meaning of Section 2985, and transactions for the creation of a leasehold exceeding one years duration. (n) "Seger' means the translator in a neat property transaction, and includes an Owner who lists real property with an agent, whether or not a transfer results, or who receives an offer to purchase real property of which he or she is the Comer from an agent on behalf of another. 'Seller' includes both a vendor and a lessor, to)'Selling agent' means a listing agent who acts alone, or an agent who acts in cooperation with a listing agent, and who sells or finds and obtains a buyer for the real property, or an agent who locates property for a buyer or who finds a buyer for a property for which no listing exists and presents an offer to purchase to the seller, (p) "Subagent* means a person to whom an agent delegates agency powers as provided in Article 5 (commencing with Section 2349) of Chapter 1 of Tide S. However, 'subagent' does not include an associate licensee who Is acting under the supervision of an agent in a real property transaction, 2079.14 Listing agents and selling agents shall provide the seller and buyer in a real property transaction with a copy of the disclosure form specified in Section 2079.16, and, except as provided in subdtision (c), shag obtain a signed acknowledgement of receipt from that seller or buyer, except as provided in this section or Section 2079.15, as MIMS: (a) The listing agent, if any, shelf provide the disclosure torn to the seller prior to entering into the listing agreement. (b) The selling agent shall provide the disclosure form to the seller as soon as practicable prior to presenting the Seger with an offer to purchase, unless the selling agent previously provided the seller with a copy of the disclosure forth pursuant to subdivision (a). (c) Where the selling agent does not deal on a facerdo-face basis with the seller, the disclosure form prepared by the selling agent may be furnished to the seller (and acknowledgement of receipt obtained for the selling agent from the sailer) by the listing agent, or the selling agent may deliver the disclosure fort by certified mail addressed to the seller at his or her last known address, in which case no signed acknowledgement of receipt is required. (d) The selling agent shall provide the disclosure forth to the buyer as soon as practicable prior to execution of the buyers offer to purchase, except that if the offer to purchase is not prepared by the selling agent the selling agent shag present the disclosure torte to the buyer not later than the next business day after the selling agent receives the offer to purchase from the buyer, 2079.15 In any circumstance in which the seller or buyer refuses to sign an acknowledgement of receipt pursuant to Section 2079.14, the agent, or an associate licensee acting for an agent, shall set forth, sign, and date a written declaration of the facts of the refusal. 2079.16 Reproduced on Page 1 of this AD form. 2079.17 (a) As soon as practicable, the selling agent shall disclose to the buyer and seller whether the sailing agent is soling in the real properly transaction exclusively as the buyers agent, exclusively as the sellers agent, or as a dual agent representing both the buyer and the seller. This reladonship shall be confirmed in the Contract to pumhase and sell real property or in a separate writing executed or acknowledged by the sager, the buyer, and the selling agent prior to w coincident with execution of that contract by the buyer and the seller, respectively. (b) As Soon as practicable, the listing agent shall disclose to the seller whether the listing agent is acting in the real property transaction exclusively as the sellers agent, or as a dual agent represenfing both the buyer and seller, This relationship shag be confirmed in the contract to purchase and seg real property or in a separate writing executed orae mowledged by the sager and the listing agent prior to or coincident with the execution of that contract by Are seller. (c) The confirmation required by subdivisions (a) and (b) shall be in the following form, (DO NOT COMPLETE. SAMPLE ONLY) is the agent of (check one): Cl the seller exclusively; or ❑ both the buyer and seller. (Name of Listing Agent) (00 NOT COMPLETE, SAMPLE ONLY) is the agent of (check one): O the buyer exclusively; or O the seller exclusively, or (Name of Selling Agent If not the same as the Listing Agent) O both the buyer and seller. (d) The disclosures and confirmation required by this section shall be in addition to the disclosure required by Section 2079.14. 2079.18 No selling agent in areal property transaction may act as an agent for the buyer only, when the selling agent is also acting as the listing agent in the transaction. 2079.19 The payment of compensation or the obligation to pay compensation to an agent by the seller or buyer is not necessarily determinative of a particular agency relationship between an agent and the seller or buyer. A listing agent and a selling agent may agree to share any compensation or commission paid, or any right to any Compensation or commission for which an obligation arises as the result of a real estate transaction, and the terms of any such agreement shall not necessarily be determinative of a particular relationship. 2079.20 Nothing in this article prevents an agent from selecting, as a condition of the agent's employment, a specific form of agency relationship not specifically prohibited by this article If the requirements of Section 2079.14 and Section 2079.17 are complied with. 2079.21 A dual agent shall not disclose to the buyer that the seller is willing to seg the property at a price less than the listing Once, without the express written consent of the seller. A dual agent shall not disclose to the seller that the buyer is willing to pay a price greater than the offering price, without the express written consent of the buyer This section does not alter in any way the duty or responsibility of a dual agent to any principal with respect to Confidential Information other than price. 2079.22 Nothing in this Mole precludes a fisting agent from also being a selling agent, and the Combination of these functions in one agent does not, of itself, make that agent a dual agent 2079.23 A contract between the principal and agent may be modified or altered to change the agency relationship at any time before the performance of the act which is the object of the agency with the written Consent of the parties to the agency relationship. 2079.24 Nothing in this article shall be ConsWed to either diminish the duty of disclosure owed buyers and sellers by agents and their associate licensees. subegents, and employees or to relieve agents and their associate licensees, subagents, and employees from liability for their conduct in connection with acts governed by this article or for any breach of a fiduciary duty or a duty of disclosure. h PutNiM l and OrsrrLalad by s REAL ESTATE BUSINESS SERVICES INC. a SubsirNary NMe La4romie AsadciafwOn of REALTORS® Reviewetl by Data � 423 South Mail Avenue, Los Mgales. California 90020 AD REVISED 12114 (PAGE 2 OF 2) DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (AD PAGE 2 OF 2) Produced wMzJpFo mm®by ZlpLoglx IW70 Finsen Milo Road, Fraser Michigan,15028 Nevpart satires C A L l OCF IO R ATION N l A RESIDENTIAL INCOME PROPERTY PURCHASE � ASS OF REALTORS' AGREEMENT AND JOINT ESCROW INSTRUCTIONS (C.A.R. Form RIPA, Revised 11114) Date Prepared: June 30, 2015 1. OFFER: A. THIS IS AN OFFER FROM Communitv Development Partners ("Buyer). ❑ Individual(s), W A Corporation,A Partnership, An LLC, H An LLP, a Other B. THE REAL PROPERTY to be acquired is 6001 Newport Shores Drive situated in Newport Beach (City). Orange (County), Califomia, 92663 (Zip Code), Assessors Parcel No, 045.114.15 ("properly"). C. THE PURCHASE PRICE offered is Three Million. Four Hundred Ninety -Five Thousand D. CLOSE OF ESCROW shall occur on (date)(or 60 Days After Acceptance). E. Buyer and Seller are referred to herein as the "Parties." Brokers are not Parties to this Agreement. 2. AGENCY: A. DISCLOSURE: The Parties each acknowledge receipt of a 0 "Disclosure Regarding Real Estate Agency Relationships (C.A.R. Form AD). B. CONFIRMATION: The following agency relationships are hereby confirmed for this transaction. Listing Agent Berkadia Real Estate Advisors Inc. (Print Firm Name) is the agent of (check one) ❑ the Seller exclusively; or. ; both the Buyer and Seller. Selling Agent Berkadia Real Estate Advisors Inc. (Print Firm Name) (if not the same as the Listing Agent) is the agent of (check one): the Buyer exclusively; or LJ the Seller exclusively, or© both the Buyer and Seller. C. POTENTIALLY COMPETING BUYERS AND SELLERS: The Parties each acknowledge receipt of a 0 "Potential Representation of More than One Buyer or Seller- Disclosure and Consent (C.A.R. Form PRBS). 3. FINANCE TERMS: Buyer represents that funds will be good when deposited with Escrow Holder. A. INITIAL DEPOSIT: Deposit shall be in the amount of ....... . ....... ...... . ................. $ 100.000.00 (1) Buyer Direct Deposit Buyer shall deliver deRosit directly to Escrow Holder by electronic funds transfer, E] cashier's check, L] personal check, u other wire within 3 business days after Acceptance (or ); OR (2)❑ Buyer Deposit with Agent. Buyer has given the deposit by personal check (or ) to the agent submitting the offer (or to ), made payable to . The deposit shall be held uncashed until Acceptance and then deposited with Escrow Holder within 3 business days after Acceptance (or ). Deposit checks given to agent shall be an original signed check and not a copy. (Note: Initial and increased deposits checks received by agent shall be recorded in Brokers trust fund log.) B. INCREASED DEPOSIT: Buyer shall deposit with Escrow Holder an increased deposit in the amount of ... $ within Days After Acceptance (or ) If the Parties agree to liquidated damages in this Agreement they also agree to incorporate the increased deposit into the liquidated damages amount in a separate liquidated damages clause (C.A.R. Form RID) at the time the increased deposit is delivered to Escrow Holder. C. ❑ ALL CASH OFFER: No loan is needed to purchase the Property. This offer is NOT contingent on Buyer obtaining a loan. Written verification of sufficient funds to close this transaction IS ATTACHED to this offer or[] Buyer Buyer shall, within 3 (or ) Days After Acceptance, Deliver to Seller such verification. D. LOAN($): (1) FIRST LOAN: in the amount of ........................................................ $ 1.995.000.00 This loan will be conventional financing or [I FHA, E] VA, ❑ Seller financing (C.A.R. Form SFA), ❑ assumed financing (C.A.R. Form AFAj, I`-"j�subject to financing, ❑ Other . This loan shall be at a fixed rate not to exceed % or, an adjustable rate loan with initial rate not to exceed %. Regardless of the type of loan, Buyer shall pay points not to exceed% of the loan amount (2) ❑ SECOND LOAN in the amount of ...................... -- .................. $ This loan will be conventional financing or Seller financing (CR. Form SFA), ❑ assumed financing (C.A.R. Form AFA), ❑ subject to financing] Other .A. . This loan shall be at a fixed rate not to exceed % or, ❑ an adjustable rate loan with initial rate not to exceed Regardless of the type of loan, Buyer shall pay points not to exceed % of the loan amount (3) FHANA: For any FHA or VA loan specified in 3D(1), Buyer has 1T (or ) Days After Acceptance to Deliver to Seller written notice (C.A.R. Form FVA) of any lender -required repairs or costs that Buyer requests Seller to pay for or otherwise correct. Seller has no obligation to pay or satisfy lender requirements unless agreed in writing. A FHANA amendatory clause (C.A.R. Form FVAC) shall be a part of this transaction. E. ADDITIONAL FINANCING TERMS: Buyer to increase cash to maximum 1st TD obtainable. F. BALANCE OF DOWN PAYMENT OR PURCHASE PRICE in the amount of .......... .. . ..... $ 1,400,000.00 to be deposite5PW#h Escrow Holder pursuant to Escrow Holder instructions. G. PURCHASE E (TOTAL): ........ ............................. $3.495,000.00 Buyer's Initials ( ( 1 Seller's Initials 02014, Caldomia Association or REALTORS®, Ina RIPA REVISED 11114 (PAGE 1 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 1 OF 11) _ Berkadia Real r44te Advbon. rac Newpan aeach, 5001) seat, Street. Sulte4000 Newport aeaeh,CA 92660 Phone°I9.El5AR6 Fav 9J9Sn.0611 Newppn Shorn SW. 11.1ol PraauoadwIth lipFomv@by 2lpLogla 18070 Fi0een Mile Road. Frd4er, 0WICan 48028 vrvly ipl mia can Property Address:. 6001 Newport Shores Drive, Newport Beach, CA 92663 Date: June 30, 2015 H. VERIFICATION OF DOWN PAYMENT AND CLOSING COSTS: Buyer (or Buyers lender or loan broker pursuant to paragraph 3J(1)) shall, within 3 (or _ ) Days After Acceptance, Deliver to Seller written verification of Buyers down payment and closing costs. (❑ Verification attached.) 1. APPRAISAL CONTINGENCY AND REMOVAL: This Agreement is (or © is NOT) contingent upon a written appraisal of the Property by a licensed or certified appraiser at no less than the purchase price. Buyer shall, as specified in paragraph 19B(3), in writing, remove the appraisal contingency or cancel this Agreement within 17 (or _) Days After Acceptance. J. LOAN TERMS: (1) LOAN APPLICATIONS: Within 3 (or _) Days After Acceptance, Buyer shall Deliver to Seller a letter from Buyers lender or loan broker stating that, based on a review of Buyers written application and credit report, Buyer is prequalified or preapproved for any NEW loan specified in paragraph 3D. If any loan specified in paragraph 3D is an adjustable rate loan, the prequalification or preapproval letter shall be based on the qualifying rate, not the initial loan rete. (❑ Letter attached.) (2) LOAN CONTINGENCY: Buyer shall act diligently and in good faith to obtain the designated loan(s). Buyers qualification for the loan(s) specified above is a contingency of this Agreement unless otherwise agreed in writing. If there is no appraisal contingency or the appraisal confingency has been waived or removed, then failure of the Property to appraise at the purchase price does not entitle Buyer to exercise the cancellation right pursuant to the loan contingency if Buyer is otherwise qualified for the specified loan. Buyers contractual obligations regarding deposit, balance of down payment and dosing costs are not contingencies of this Agreement (3) LOAN CONTINGENCY REMOVAL: Within 21 (or _ ) Days After Acceptance, Buyer shall, as specified in paragraph 19, in writing. remove the loan contingency or cancel this Agreement. If there is an appraisal contingency, removal of the loan contingency shall not be deemed removal of the appraisal contingency. (4) C NO LOAN CONTINGENCY: Obtaining any loan specified above is NOT a contingency of this Agreement If Buyer does not obtain the loan and as a result Buyer does not purchase the Property, Seller may be entitled to Buyers deposit or other legal remedies. (5) LENDER LIMITS ON BUYER CREDITS: Any credit to Buyer, from any source, for closing or other costs that is agreed to by the Parties ("Contractual Credit") shall be disclosed to Buyers lender. If the total credit allowed by Buyers lender ("Lender Allowable Credir) is less than the Contractual Credit, then (i) the Contractual Credit shall be reduced to the Lender Allowable Credit, and (it) in the absence of a separate written agreement between the Parties, there shall be no automatic adjustment to the purchase price to make up for the difference between the Contractual Credit and the Lender Allowable Credit. (6) ASSUMED OR SUBJECT TO FINANCING: Seller represents that Seller is not delinquent on any payments due on any loans. If the Property is acquired subject to an existing loan, Buyer and Seller are advised to consult with legal council regarding the ability of an existing lender to call the loan due, and the consequences thereof. K. BUYER STATED FINANCING: Seiler is relying on Buyers representation of the type of financing specified (including but not limited to, as applicable, all cash, amount of down payment, or contingent or non -contingent loan). Seller has agreed to a specific closing date, purchase price and to sell to Buyer in reliance on Buyers covenant concerning financing. Buyer shall pursue the financing specified in this Agreement Seller has no obligation to cooperate with Buyers efforts to obtain any financing other than that specified in the Agreement and the availability of any such alternate financing does not excuse Buyer from the obligation to purchase the Property and close escrow as specified in this Agreement. 4. SALE OF BUYER'S PROPERTY: A. This Agreement and Buyers ability to obtain financing are NOT contingent upon the sale of any property owned by Buyer, - OR B. ❑ This Agreement and Buyers ability to obtain financing are contingent upon the sale of property owned by Buyer as specified in the attached addendum (C.A.R. Form COP). S. ADDENDA AND ADVISORIES: A. ADDENDA: F)?Addendum # 1 (C.A.R. Form ADMI B. 6. OTHER TERMS: 1) Seller to provide city of Newport Beach residential records report. 2) See attached Addendum #1 for additional terms 8 conditions. T. ALLOCATION OF COSTS A. INSPECTIONS, REPORTS AND CERTIFICATES: Unless otherwise agreed, in writing, this paragraph only determines who is to pay for the inspection, test, certificate or service ("Report") mentioned; it does not determine who is to pay for any work recommended or identified to the Report (1) []Buyer [X] Seller shall pay for a natural hazard zone disclosure report, including tax []environmental ❑Other. prepared by First American Natural Hazard Disclosure (2) LJBuyer LJ Seller shall pay for the following Report (3) 7XBuyer LJ Seller shall pay for the following Report any 6 all physical property inspection reports. prepared It Buyers Initials ( ( 1 Setter's initials RIPA REVISED 11114 (PAGE 2 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 2 OF 11) 2 P, .Md *M npFQ M by aPLo 1. 18070 FA w We Road, Fraser, Mk ,g 49026 ,,LBLmx= Newaortska Property Address: 6001 Newport Shores Drive, Newport Beach, CA 92663 Date: June 30, 2015 B. GOVERNMENT REQUIREMENTS AND RETROFIT: (1) ❑Buyer Q Seller shall pay for smoke alarm and carbon monoxide device installation and water heater bracing, if required by Law. Prior to Close Of Escrow ('COE'), Seller shall provide Buyer written statement(s) of compliance in accordance with state and local Law, unless Seller is exempt (2) (1) [X] Buyer ❑ Seller shall pay the cost of compliance with any other minimum mandatory government inspections and reports if required as a condition of closing escrow under any Law. (ii) ©Buyer ❑ Seller shall pay the cost of compliance with any other minimum mandatory government retrofit standards required as a condition of closing escrow under any Law, whether the work is required to be completed before or after COE. (iii) Buyer shall be provided, within the time specified in paragraph 19A, a copy of any required government conducted or point-of- sale inspection report prepared pursuant to this Agreement or in anticipation of this sale of the Property. (3) ❑X Buyer ❑ Seller shall pay for installation of approved fire extinguisher(s), sprinkler(s), and hose(s), If required by Law, which shall be installed prior to Close Of Escrow. Prior to Close Of Escrow, Seller shall provide Buyer a written statement of compliance, N required by Law. (4) ❑ Buyer ?❑f Seller shall pay for installation of drain cover and antkentrapment device or system for any pool or spa meeting the minimum requirements permitted by the U.S. Consumer Products and Safety Commission. C. ESCROW AND TITLE: (1) (a) © Buyer C Seller shall pay escrow fee Each to pay their own respective fees (b) Escrow Holder shall be to be agreed upon (c) The Parties shall, within 5 (or _) Days After receipt, sign and return Escrow Holder's general provisions. (2) (a) []Buyer rk, Seller shall pay for owner's title insurance policy specked in paragraph 18E (b) Owner's title policy to be issued by to be agreed upon (Buyer shall pay for any title insurance policy insuring Buyer's lender, unless otherwise agreed in writing.) D. OTHER COSTS: (1) Buyer fk Seller shall pay County transfer tax or fee (2) LJBuyer Ll Seller shall pay City transfer tax or fee NIA (3) LJ Buyer LJ Seiler shall pay Homeowners' Association ("HOA°) transfer fee NIA (4) Seller shall pay HOA fees for preparing documents required to be delivered by Civil Code §4525. (5) ❑ Buyer❑ Seller shall pay HOA fees for preparing all documents other than those required by Civil Code §4525. (6) Buyer to pay for any HOA certification fee. (7)Buyer Seller shall pay for any private transfer fee NIA (a) LJBuyer Seller shall pay for NIA (9) Buyer Seller shall pay for NIA (16) Buyer Seller shall pay for the cost, not to exceed $ , of a Ustandard LJ upgraded one- year home warrantylan, issued by , with the following optional coverages: LjAir Conditioner Pool/Spa Other: Buyer is informed that home warranty plans have many optional coverages in addition to those listed above. Buyer is advised to investigate these coverages to determine those that may be suitable for Buyer. ORR Buyer waives the purchase of a home warranty policy. Nothing in this paragraph precludes Buyer's purchasing a home warranty policy during the term of the Agreement. 8. ITEMS INCLUDED IN AND EXCLUDED FROM SALE: A. NOTE TO BUYER AND SELLER: Items listed as included or excluded in the MLS, flyers or marketing materials are not included in the purchase price or excluded from the sale unless specified in paragraph 8B, C or D. B. ITEMS INCLUDED IN SALE: (1) All EXISTING fixtures and fittings that are attached to the Property; (2) EXISTING electrical, mechanical, lighting, plumbing and heating fixtures, ceiling fans, fireplace inserts, gas logs and grates, solar power systems, built-in appliances, window and door screens, awnings, shutters, window coverings, attached floor coverings, television antennas, satellite dishes, air coolers/conditioners, poollspa equipment, garage door openers/remote controls, mailbox, in -ground landscaping, trees/shrubs, water features and fountains, water softeners, water purifiers and security systems/alarms. (3) Seller represents that all items included In the purchase price, unless otherwise specified, are owned by Seller, except IQ NIA and Ill) the items and systems identified pursuant to 813(4). (4) LEASED OR LIENED ITEMS AND SYSTEMS: Seller shall, within the time specified in paragraph 19A, (i) disclose to Buyer if any item or system specified in paragraph BB or otherwise Included in the sale is leased, or not owned by Seller, or specifically subject to a lien or other encumbrance, and (it) Deliver to Buyer all written materials (such as lease, warranty, etc.) concerning any such item. Buyer's ability to assume any such lease, or willingness to accept the Property subject to any such lien or encumbrance, is a contingency in favor of Buyer and Seller as specified in paragraph 1913 and C. (5) Except as otherwise specified or disclosed, all items included shall be transferred free and clear of liens and encumbrances and without Seiler warranty regardless of value. (6) A complete inventory of all personal property of Seller currently used in the operation of the Property and included in the purchase price shall be delivered to Buyer within the time specified in paragraph 19. (7) Seller shall deliver title to the personal property by Bill of Sale, free of all liens and encumbrances, and without warranty of condition. (8) As additional security for any note in favor of Seller for any part of the purchase price, Buyer shall execute a UCC -1 Financing Statement to be filed with the Secretary of State, covering the personal property included in the purchase, replacement thereof, and Insurance proceeds. C. ITEMS EXCLUDED FROM SALE: NIA D. OTHER ITEMS: Existing integrated phone and home automation systems, including necessary components such as intranet and Intemet-co d hardware or devices, control units (other than non -dedicated mobile devices, electronics and computers) and applicable s a , permissions, passwords, codes and access information, are (❑ are NOT) included in Jthe sale. Buyers initials (( ) Seller's Initials %7�1y y ) RIPA REVISED 11414 (PAGE 3 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 3 OF 11) , a Pr ueaC bpFwn6byapLng¢ 1aWOFft"Mile RGW Fraser Mv,gw4SM �,tpy,fgkwm Ne'"sh. Property Address: 6001 Newport Shores Drive, Newport Beach, CA 92663 Date: June 30, 2015 9. SECURITY DEPOSITS: Security deposits, if any, to the extent they have not been applied by Seller in accordance with any rental agreement and current Law, shall be transferred to Buyer on Close Of Escrow. Seller shall notify each tenant, in compliance with the California Civil Cade. 10. CLOSING AND POSSESSION: A. Buyer intends (or&, does not intend) to occupy any unit in the Property as Buyer's primary residence. B. Seller -occupied or vacant property: Possession shall be delivered to Buyer. (i) at 6 PM or ( []AM/ ❑ PM) on the date of Close Of Escrow; (ii) ❑ no later than _ calendar days After Close Of Escrow; or (iii) ❑ at_❑ AN/ 0 PM on C. Seller Remaining in Possession After Close Of Escrow: If Seller has the right to remain in possession after Close Of Escrow, (t) the Parties are advised to sign a separate occupancy agreement such as ❑ C.A.R. Forth SIP, for Seller continued occupancy of less than 30 days, ❑ C.A.R. Form RLAS for Seller continued occupancy of 30 days or more; and (ii) the Parties are advised to consult with their insurance and legal advisors for information about liability and damage or injury to persons and personal and real property; and (iii) Buyer is advised to consult with Buyer's lender about the impact of Seller's occupancy on Buyer's loan. D. Tenant occupied units: Possession and occupancy, subject to the rights of tenants under existing leases, shall be delivered to Buyer on Close Of Escrow. E. At Close Of Escrow: (1) Seller assigns to Buyer any assignable warranty rights for items included in the sale: and (11) Seller shall Deliver to Buyer available Copies of any such warranties. Brokers cannot and will not determine the assignability of any warranties. F. At Close Of Escrow. unless otherwise agreed in writing, Seller shall provide keys, passwords, codes and/or means to operate all locks, mailboxes, security systems, alarms, home automation systems and intranet and Intemet-connected devices included in the purchase price, and garage door openers. If the Property is a condominium or located in a common interest subdivision, Buyer may be required to pay a deposit to the Homeowners' Association ("HOA") to obtain keys to accessible HOA facilities. 11. STATUTORY AND OTHER DISCLOSURES (INCLUDING LEAD-BASED PAINT HAZARD DISCLOSURES) AND CANCELLATION RIGHTS: A. LEAD-BASED PAINT HAZARD DISCLOSURES: (1) Seiler shall, within the time specified in paragraph 19, deliver to Buyer, if required by Law, Federal Lead -Based Paint Disclosures and pamphlet ("Lead Disclosures"). If the Lead Disclosures are delivered to Buyer after the offer is Signed, Buyer shall have the right to cancel this Agreement within 3 Days Atter Delivery in person, or 5 Days After delivery by deposit in the mail, by giving written notice of cancellation to Seller or Seller's agent (Lead Disclosures sent by mail must be sent certified mail or better.) (2) Buyer shall, within the time specified In paragraph 19, return a Signed Copy of the Lead Disclosure to Seller. B. NATURAL AND ENVIRONMENTAL HAZARDS: Within the time specified in paragraph 19. Seller shall, if required by Law: (1) deliver to Buyer earthquake guides (and questionnaire) and environmental hazards booklet; and (it) even 0 exempt from the obligation to provide a NHD, disclose if the Property is located in a Special Flood Hazard Area; Potential Flooding (Inundation) Area; Very High Fire Hazard Zone; State Fire Responsibility Area; Earthquake Fault Zone; Seismic Hazard Zone; and (ill) disclose any other zone as required by Law and provide any other information required for those zones. C. WITHHOLDING TAXES: Within the time specified in paragraph 19A, to avoid required withholding, Seller shall Deliver to Buyer or qualified substitute, an affidavit sufficient to comply with federal (FIRPTA) and California withholding Law (CAR. Fonn AS or OS). D. MEGAN'S LAW DATABASE DISCLOSURE: Notice: Pursuant to Section 290.46 of the Penal Code, information about specified registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at www.meganslaw.ca.gov. Depending on an offender's criminal history, this information will include either the address at which the offender resides or the community of residence and ZIP Code In which he or she resides, (Neither Seller nor Brokers are required to check this website. If Buyer wants further information, Broker recommends that Buyer obtain information from this website during Buyer's inspection contingency period. Brokers do not have expertise in this area.) E. NOTICE REGARDING GAS AND HAZARDOUS LIQUID TRANSMISSION PIPELINES: This notice is being provided simply to inform you that information about the general location of gas and hazardous liquid transmission pipelines is available to the public via the National Pipeline Mapping System (NPMS) Internet Web site maintained by the United States Department of Transportation at http://www.npms.phmsa,dot.gov/. To seek further information about possible transmission pipelines near the Property, you may contact your local gas utility or other pipeline operators in the area. Contact information for pipeline operators is searchable by ZIP Code and county on the NPMS Internet Web site. F. CONDOMINIUMIPLANNED DEVELOPMENT DISCLOSURES: (1) SELLER HAS: 7 (or _ ) Days After Acceptance to disclose to Buyer whether the Property is a condominium, or is located in a planned development or other common Interest subdivision (CAR. Form SPQ or SSD). (2) If the Property is a condominium or is located in a planned development or other common interest subdivision, Seller has 3 (or ) Days After Acceptance to request from the HOA (CAR. Form HOA1): (i) Copies of any documents required by Law; (ii) disclosure of any pending or anticipated claim or litigation by or against the HOA; (it[) a statement containing the location and number of designated parking and storage spaces; (tv) Copies of the most recent 12 months of HOA minutes for regular and special meetings; and (v) the names and contact information of all HOAs governing the Property (collectively, "Cl Disclosures'). Seiler shall itemize and Deliver to Buyer all CI Disclosures received from the HOA and any CI Disclosures in Sepals possession. Buyer's approval of CI Disclosures is a contingency of this Agreement as specified in paragraph 19B(3). The Party specified in paragraph 7, as directed by escrow, shall deposit funds into escrow or direct to HOA or management company to pay for any of the above. 12. RESIDENTIAL 1-4 PROPERTIES: A. Seller shall, within the time specified in paragraph 19A. Deliver to Buyer (i) if required by Law, a fully completed. Federal Lead -Based Paint Disclosures (CAR. Form FLD) and pamphlet ("Lead Disclosures"); and (11) unless exempt, fully completed disclosures or notices required by sections 1102 at. seq. and 1103 at seq. of the Civil Code ("Statutory Disclosures"). Statutory Disclosures include, but are not limited to, a Real Estate Transfer Disclosure Statement CTDS"), Natural Hazard Disclosure Statement ("NHD'), notice or actual knowledge of release of illegal controlled substance, notice of special tax andlor assessments (or, if allowed, substantially equivalent notice regardin the Mello -Roos Community Facilities Act of 1982 and Improvement Bond Act of 1915) and, if Seller has actual knowledge, o n strial use and military ordnance location (CAR. Forth SPO or SSD). Buyer's Initials ( ( 1 Seller's Initials RIPA REVISED 11/14 (PAGE 4 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 4 OF 11) P- PmCu wqh mForm®by ApLoglx IW70 FRaan Mlle Road. Fraser Mltliigen 18026 y .malwix. Nsxpen Shan Property Address. 6001 Newport Shores Drive, Newport Beach, CA 92663 Date: June 30, 2015 B. Any Statutory Disclosure required by this paragraph is considered fully completed if Seller has answered all questions and completed and signed the Seller section(s) and the Listing Agent, if any, has completed and signed the Listing Broker section(s), or, if applicable, an Agent Visual Inspection Disclosure (CAR. Form AVID). Nothing stated herein relieves a Buyer's Broker, if any, from the obligation to (i) conduct a reasonably competent and diligent visual inspection of the accessible areas of the Property and disclose, on Section IV of the TDS, or an AVID, material facts affecting the value or desirability of the Property that were or should have been revealed by such an inspection or (ii) complete any sections on all disclosures required to be completed by Buyer's Broker. C. Note to Buyer and Seller: Waiver of Statutory and Lead Disclosures is prohibited by Law. D. Min the time specified in paragraph 19A, (I) Seller, unless exempt from the obligation to provide a TDS, shall, within the time specified in paragraph 19A, complete and provide Buyer with a Seller Property Questionnaire (CAR. Form SPQ) (11) If Seiler is not required to provide a TDS, Seller shall complete and provide Buyer with a Supplemental Contractual and Statutory Disclosure (CAR, Form SSD). E. Buyer shall, within the time specified in paragraph 198(1), return Signed Copies of the Statutory, Lead and other disclosures to Seller. F. In the event Seller or Listing Broker, prior to Close Of Escrow, becomes aware of adverse conditions materially affecting the Property. or any material Inaccuracy in disclosures, information or representations previously provided to Buyer, Seller shall promptly provide a subsequent or amended disclosure or notice, in writing, covering those items. However, a subsequent or amended disclosure shall not be required for conditions and material inaccuracies of which Buyer is otherwise aware, or which are disclosed in reports provided to or obtained by Buyer or ordered and paid for by Buyer. G. If any disclosure or notice specified in paragraph 12A, or subsequent or amended disclosure or notice is Delivered to Buyer after the offer Is Signed, Buyer shall have the right to cancel this Agreement within 3 Days After Delivery in person, or 5 Days After Delivery by deposit in the mail, by giving written notice of cancellation to Seller or Seller's agent. 13. SELLER DOCUMENTATION AND ADDITIONAL DISCLOSURE: Within the time specified in paragraph 19, Seller shall disclose, make available or Deliver, as applicable, to Buyer the following Information. A. RENTALlSERVICE AGREEMENTS: Seller shall make available to Buyer for Inspection and review: (i) all current leases, rental agreements, service contracts, and other agreements pertaining to the operation of the Property; (ii) a rental statement including names of tenants, rental rates, period of rental. date of last rent increase, security deposits, rental concessions, rebates or other benefits, 'd any, and a list of delinquent rents and their duration. Seller represents that no tenant is entitled to any rebate, concession, or other benefk, except as set forth in these documents. Seller represents that the documents to be furnished are those maintained in fie ordinary and normal course of business. B. INCOME AND EXPENSE STATEMENTS: Seller shall make available to Buyer the books and records for the Property, including a statement of income and expense for the 12 months preceding Acceptance. Seller represents that the books and records are those maintained in the ordinary and normal course of business, and used by Seller in the computation of federal and state income tax returns. C. i] TENANT ESTOPPEL CERTIFICATES: (If checked) Seller shall Deliver to Buyer tenant estoppel certillcates (CAR. Form TEC) completed by Seller or Seller's agent, and signed by tenants, acknowledging: (i) that tenants' rental or lease agreements are unmodified and in full force and effect (or If modified, stating all such modifications); (ti) that no lessor defaults exist; and (iii) stating the amount of any prepaid rent or security deposit. D. SURVEY, PLANS, AND ENGINEERING DOCUMENTS: Seller shall, at no cost to Buyer, Deliver to Buyer Copies of surveys, plans, specifications, and engineering documents, if any, prepared on Seller's behalf or in Seller's possession. E. PERMITS: If in Seller's possession, Seller shall Deliver to Buyer Copies of all permits and approvals concerning the Property, obtained from any governmental entity, including, but not limited to, certificates of occupancy, conditional use permits, development plans, and licenses and permits pertaining to the operation of the Property. F. STRUCTURAL MODIFICATIONS: Seller shall disclose to Buyer in wrifing any known structural additions or alterations to, or the installation, alteration, repair or replacement of, significant components of the structure(s) upon the Property. G. SELLER REPRESENTATION: Seller represents that Seller has no actual knowledge: (1) of any current pending lawsuit(s), investigation(s), inquiry(ies), sclion(s), or other proceeding(s) affecting the Property or the right to use and occupy It, (ii) of any unsatisfied mechanic's or materialman lien(s) affecting the Property; and (111) that any tenant of the Property is the subject of a bankruptcy. If Seller receives any such notice prior to Close Of Escrow, Seller shall immediately notify Buyer. H. GOVERNMENTAL COMPLIANCE: (1) Seiler shall disclose to Buyer any improvements, additions, alterations, or repairs to the Property made by Salter, or known to Seller to have been made, without required governmental permits, final inspections, and approvals. (2) Seller shall disclose to Buyer if Seiler has actual knowledge of any notice of violations of Law filed or issued against the Property. 14. SUBSEQUENT DISCLOSURES: In the event Seller, prior to Close Of Escrow, becomes aware of adverse conditions materially affecting the Property, or any material inaccuracy in disclosures, information or representations previously provided to Buyer, Setter shall promptly Deliver a subsequent or amended disclosure or notice, in writing, covering those Items. However, a subsequent or amended disclosure shall not be required for conditions and material inaccuracies of which Buyer is otherwise aware, or which are disclosed In reports provided to or obtained by Buyer or ordered and paid for by Buyer. 15. CHANGES DURING ESCROW: A. Prior to Close Of Escrow, Seller may engage in the following acts ('Proposed Changes"), subject to Buyer's rights in paragraph 198: (1) rent or lease any vacant unit or other part of the premises; (ii) atter, modify or extend any existing rental or lease agreement; (iii) enter Into, alter, modify or extend any service contract(s); or (iv) change the status of the condition of the Property. B. At least 7 (or_) Days Prior to any Proposed Changes, Seller shall Deliver written notice to Buyer of such Proposed Changes. 15. CONDITION OF PROPERTY: Unless otherwise agreed in writing: (1) the Property is sold (a) "AS -IS" in its PRESENT physical condition as of the date of Acceptance and (b) subject to Buyer's Investigation rights; (11) the Property, Including pool, spa, landscaping and grounds, is to be maintained In substantially the same condition as on the date of Acceptance; and (Ili) all debris and personal property not included in the sale shall be removed by Close Of Escrow. A. Seller shall, within the time specified in paragraph 19A, DISCLOSE KNOWN MATERIAL FACTS AND DEFECTS affecting the Property, including known insurance claims within the past five years, and make any and all other disclosures required by law. B. Buyer has the right to conduct Buyer Investigations of the property and, as specified in paragraph 196, based upon Information discovered in those investigations: (i) cancel this Agreement; or (11) request that Seller make Repairs or take other action. C. Buyer is strongly advised to conduct Investigations of the entire Property in order to determine its present condition. Seller may not be aware of all defects affecting the Property or other factors that Buyer considers important. Property improvements may not be built according to code, in compliance with current Law, or have had permits' u Buyer's Innols ( 1( ) Sellees Inium, ( t( } 12rRIPA REVISED 11114 (PAGE 5 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 5 OF 11) m...", PM41Xe wthapFWn AbyripLwe 18070Fift"n Mla Road, FAsw Mid gw 48028 B ,zipl0wu ID N<xport Beorp Property Address: 6001 Newport Shores Drive Newport Beach, CA 92663 Date: June 30, 2015 17. BUYER'S INVESTIGATION OF PROPERTY AND MATTERS AFFECTING PROPERTY: A. Buyers acceptance of the condition of, and any other matter affecting the Property, is a contingency of this Agreement as specified in this paragraph and paragraph 19B. Within the time specified in paragraph 19B(1), Buyer shall have the right, at Buyers expense unless otherwise agreed, to conduct inspections, investigations, tests, surveys and other studies ("Buyer Investigations"), including, but not limited to, the right to: (1) inspect for lead-based paint and other lead-based paint hazards; (11) inspect for wood destroying pests and organisms. Any inspection for wood destroying pests and organisms shall be prepared by a registered Structural Pest Control company; shall cover the main building and attached structures; may cover detached structures; shall NOT include water tests of shower pans on upper level units unless the owners of property below the shower consent; shall NOT include roof coverings; and, if the Property is a unit in a condominium or other common interest subdivision, the inspection shall include only the separate interest and any exclusive -use areas being transferred, and shall NOT include common areas; and shall include a report ("Pest Control Report") showing the findings of the company which shall be separated into sections for evident infestation or Infections (Section 1) and for conditions likely to lead to infestation or infection (Section 2); (lit) review the registered sex offender database; IN) confirm the insurability of Buyer and the Property including the availability and cost of flood and fire insurance; (v) review and seek approval of leases that may need to be assumed by Buyer, and (vi) satisfy Buyer as to any matter specified in the attached Buyers Inspection Advisory (CAR. Form BIA). Without Sellers prior written consent, Buyer shall neither make nor cause to be made: (i) invasive or destructive Buyer Investigations except for minimally Invasive testing required to prepare a Pest Control Report; or (ll) inspections by any governmental building or zoning inspector or government employee, unless required by Law. B. Seiler shall make the Property available for all Buyer Investigations. Buyer shall (t) as specified in paragraph 19B, complete Buyer Investigations and either remove the contingency or cancel this Agreement, and (11) give Seller, at no cost, complete Copies of all such Investigation reports obtained by Buyer, which obligation shall survive the termination of this Agreement. C. Seller shall have water, gas, electricity and all operable pilot lights on for Buyers Investigations and through the date possession is made available to Buyer. D. Buyer indemnity and seller protection for entry upon property: Buyer shall: (i) keep the Property free and clear of liens; (it) repair all damage arising from Buyer Investigations; and (III) indemnify and hold Seiler harmless from all resulting liability, claims, demands, damages and costs. Buyer shall carry, or Buyer shall require anyone acting on Buyers behalf to carry, policies of liability, workers' compensation and other applicable insurance, defending and protecting Seller from liability for any injuries to persons or property occurring during any Buyer Investigations or work done on the Property at Buyers direction prior to Close Of Escrow. Seller is advised that certain protections may be afforded Seller by recording a "Notice of Nan -Responsibility" (CAR. Form NNR) for Buyer Investigations and work done on the Property at Buyers direction. Buyers obligations under this paragraph shall survive the termination of this Agreement 18. TITLE AND VESTING: A. Wthin the time specified in paragraph 19, Buyer shall be provided a current preliminary title report ("Preliminary Report"). The Preliminary Report is only an offer by the fi6e insurer to issue a policy of title insurance and may not contain every item affecting tltie, Buyers review of the Preliminary Report and any other matters which may affect Me are a contingency of this Agreement as specified in paragraph 19B. The company providing the Preliminary Report shall, prior to issuing a Preliminary Report, conduct a search of the General Index for all Sellers except banks or other institutional lenders selling propertes they acquired through foreclosure (REOs), corporations, and government entifies. Seller shall within 7 Days After Acceptance, give Escrow Holder a completed Statement of Information. B. Title is taken in its present condition subject to all encumbrances, easements, covenants, conditions, restrictions, rights and other matters, whether of record or not, as of the date of Acceptance except for (1) monetary liens of record (which Seiler is obligated to pay off) unless Buyer is assuming those obligations or taking the Property subject to those obligations; and (II) those matters which Seller has agreed to remove in writing. C. Within the time specified in paragraph 19A, Seller has a duty to disclose to Buyer all matters known to Seiler affecting tide, whether of record or not. D. At Close Of Escrow, Buyer shall receive a grant deed conveying bite (or, for stock cooperative or long-term lease, an assignment of stock certificate or of Setters leasehold interest), including oil, mineral and water rights if currently owned by Seller. Title shall vest as designated in Buyers supplemental escrow instructions. THE MANNER OF TAKING TITLE MAY HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL. E. Buyer shall receive a Standard Coverage Owners CLTA policy of title insurance. An ALTA policy or the addition of endorsements may provide greater coverage for Buyer. A title company, at Buyers request, can provide Information about the availability, desirability, coverage, and cost of various title insurance coverages and endorsements. If Buyer desires btie coverage other than that required by this paragraph, Buyer shall instruct Escrow Holder in writing and shall pay any increase in cost 19. TIME PERIODS; REMOVAL OF CONTINGENCIES; CANCELLATION RIGHTS: The following time periods may only be extended, altered, modified or changed by mutual written agreement. Any removal of contingencies or cancellation under this paragraph by either Buyer or Seller must be exercised in good faith and in writing (C.AA Form CR or CC). A. SELLER HAS: 7 (or _ ) Days After Acceptance to Deliver to Buyer all Reports, disclosures and Information for which Seller is responsible under paragraphs 5A, 6, 7, BB(4), 11A, B, C, and F, 12A and D, 13, 16A, and 18A Buyer after first Delivering to Seller a Notice to Seiler to Perform (CAR, Forth NSP) may cancel this Agreement if Seller has not Delivered the items within the time specified. B. (1) BUYER HAS: 17 (or 30 ) Days After Acceptance, unless otherwise agreed in writing, to: (i) complete all Buyer Investigations; review all disclosures, reports, lease documents to be assumed by Buyer pursuant to paragraph 8B(4) and other applicable Information, which Buyer receives from Seller, and approve all matters affecting the Property; and (ii) Deliver to Seller Signed Copies of Statutory and Lead Disclosures and other disclosures Delivered by Seller in accordance with paragraph 12A (2) Wthin the time specified in paragraph 196(1), Buyer may request that Seller make repairs or take any other action regarding the Property (CAR. Form RR). Seller has no obligation to agree to or respond to (C.A.R. Form RRRR) Buyers requests. (3) By the and of the time specified in paragraph 196(1) (or as otherwise specified In this Agreement), Buyer shall Deliver to Seller a removal of the applicable contingency or cancellation (CAR. Form CR or CC) of this Agreement However, if any report, disclosure or information for which Seller is responsible is not Delivered within the time specified in paragraph 19A, then Buyer has 5 (or _ ) Days After Delivery of any such items, or the time specified in paragraph 198(1), whichever is later, to Deliver to Seller a removal of the applicabyt3prifingency or cancellation of this Agreement. Buyers initials ( ) Sellers Initials ( I( ) RIPA REVISED 11114 (PAGE 6 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 6 OF 11) P ueed with#FormD by apiogx 18070 F8ean Mite Road Fraser Kalgan 48026 w Newport Seom Property Address: 6001 Newport Shores Drive, Newport Beach, CA 92663 Date: June 30, 2015 (4) Continuation of Contingency: Even after the end of the time specified in paragraph 19B(1) and before Seller cancels, if at all, pursuant to paragraph 19C. Buyer retains the right, in writing, to either (i) remove remaining contingencies, or (ii) cancel this Agreement based on a remaining contingency. Once Buyer's written removal of all contingencies is Delivered to Seller. Seller may not cancel this Agreement pursuant to paragraph 19C(1). C. SELLER RIGHT TO CANCEL: (1) Seller right to Cancel; Buyer Contingencies: If, by the time specified in this Agreement, Buyer does not Deliver to Seller a removal of the applicable contingency or cancellation of this Agreement, then Seller, after first Delivering to Buyer a Notice to Buyer to Perform (CAR. Form NBP), may cancel this Agreement, In such event, Seller shall authorize the return of Buyer's deposit, except for fees incurred by Buyer. (2) Seller right to Cancel; Buyer Contract Obligations: Seller, after first delivering to the Buyer a NBP, may cancel this Agreement If, by the time specified in this Agreement, Buyer does not take the following action(s): (i) Deposit funds as required by paragraph 3A or 3B or if the funds deposited pursuant to paragraph 3A or 3B are not good when deposited; (ft) Deliver a notice of FHA or VA costs or terms as required by paragraph 3D(3) (CAR. Form FVA): (Ili) Deliver a letter as required by paragraph 3J(1); IN) Deliver verification as required by paragraph 3C or 3H or if Seller reasonably disapproves of the verification provided by paragraph 3C or 3H; (v) In writing assume or accept leases or liens specified in 8B4; (vi) Return Statutory and Lead Disclosures as required by paragraph 11 A(2) and 12E; or (vii) Sign or initial a separate liquidated damages forth for an increased deposit as required by paragraphs 3B and 30B, or (viii) Provide evidence of authority to sign in a representative capacity as specified in paragraph 28. In such event, Seller shall authorize the return of Buyer's deposit, except for fees incurred by Buyer. D. NOTICE TO BUYER OR SELLER TO PERFORM: The NBP or NSP shall: (i) be in wdting; (ii) be signed by the applicable Buyer or Seller, and (IB) give the other Party at least 2(or _ ) Days After Delivery (or unfit the time specified in the applicable paragraph, whichever occurs last) to take the applicable action. A NBP or NSP may not be Delivered any earlier than 2 Days Prior to the expiration of the applicable time for the other Party to remove a contingency or cancel this Agreement or meet an obligation specified in paragraph 19. E. EFFECT OF BUYER'S REMOVAL OF CONTINGENCIES: If Buyer removes, in writing, any contingency or cancellation rights, unless otherwise specified in writing, Buyer shall conclusively be deemed to have: (I) completed all Buyer Investigations, and review of reports and other applicable information and disclosures pertaining to that contingency or cancellation right; (ii) elected to proceed with the transaction: and (lit) assumed all liability, responsibility and expense for Repairs or corrections pertaining to that contingency or cancellation right, or for the inability to obtain financing. F. CLOSE OF ESCROW: Before Buyer or Seller may cancel this Agreement for failure of the other Party to close escrow pursuant to this Agreement, Buyer or Seller must first Deliver to the other Party a demand to close escrow (CAR. Form DCE). The DCE shall: (t) be signed by the applicable Buyer or Seller, and (h) give the other Party at least 3 (or _) Days Atter Delivery to close escrow. A DCE may not be Delivered any earlier than 3 Days Prior to the scheduled dose of escrow. G. EFFECT OF CANCELLATION ON DEPOSITS: If Buyer or Seller gives written notice of cancellation pursuant to rights duly exercised under the terms of this Agreement, the Parties agree to Sign mutual instructions to cancel the sale and escrow and release deposits, if any, to the party entitled to the funds, less fees and costs incurred by that party. Fees and costs may be payable to service providers and vendors for services and products provided during escrow. Except as specified below, release of funds will require mutual Signed release instructions from the Parties, judicial decision or arbitration award. If either Party fails to execute mutual instructions to cancel escrow, one Party may make a written demand to Escrow Holder for the deposit (CAR. Form BDRD or SDRD). Escrow Holder, upon receipt, shall promptly deliver notice of the demand to the other Party. If, within 10 Days After Escrow Holder's notice, the other Party does not object to the demand, Escrow Holder shall disburse the deposit to the Party making the demand. If Escrow Holder complies with the preceding process, each Party shall be deemed to have released Escrow Holder from any and all claims or liability related to the disburse] of the deposit. Escrow Holder, at its discretion, may nonetheless require mutual cancellation instructions. A Party may be subject to a civil penalty of up to S1,1100 for refusal to sign cancellation instructions if no good faith dispute exists as to who is entitled to the deposited funds (Civil Code §1057.3). 20. REPAIRS: Repairs shall be completed prior to final verification of condition unless otherwise agreed in writing. Repairs to be performed at Seller's expense may be performed by Seiler or through others, provided that the work complies with applicable Law, including governmental permit, inspection and approval requirements. Repairs shall be performed in a good, skillful manner with materials of quality and appearance comparable to existing materials, it is understood that exact restoration of appearance or cosmetic items following all Repairs may not be possible. Seller shall: (i) obtain invoices and paid receipts for Repairs performed by others; (Ii) prepare a written statement indicating the Repairs performed by Seller and the date of such Repairs; and (iii) provide Copies of invoices and paid receipts and statements to Buyer prior to final verification of condition. 21. ENVIRONMENTAL HAZARD CONSULTATION: Buyer and Seller acknowledge: (t) Federal, state, and local legislation Impose liability upon existing and former owners and users of real property, in applicable situations, for certain legislatively defined, environmentally hazardous substances; (11) Broker(s) haslhave made no representation concerning the applicability of any such Law to this transaction or to Buyer or to Seller, except as otherwise indicated in this Agreement; (iii) Broken(s) hasthave made no representation conceming the existence, testing, discovery, location and evaluation ofifor, and risks posed by, environmentally hazardous substances, if any, located on or potentially affecting the Property; and (iv) Buyer and Seller are each advised to consult with technical and legal experts concerning the existence, testing, discovery, location and evaluation of/for, and risks posed by, environmentally hazardous substances, if any, located on or potentially affecting the Property. 22. AMERICANS WITH DISABILITIES ACT: The Americans With Disabilities Act ("ADA") prohibits discrimination against individuals with disabilities. The ADA affects almost all commercial facilities and public accommodations. Residential properties are not typically covered by the ADA, but may be governed by its provisions if used for certain purposes. The ADA can require, among other things, that buildings be made readily accessible to the disabled. Different requirements apply to new construction, alterations to existing buildings, and removal of barriers in existing buildings. Compliance with the ADA may require significant costs. Monetary and injunctive remedies may be incurred tt the Property is not in compliance. A real estate broker does not have the technical expertise to determine whether a building is in compliance with ADA requirements, or to advise a principal on those requirements. Buyer and Seller are advised to contact an attorney, contractor, archite a ineer or other qualified professional of Buyer or Seller's own choosing to determine to what degree, If any, the ADA impacts that prin ' a r this transaction. Buyer's Initials( ( 1 Sellers Initials t S/� �kjre I( ) /\ RIPA REVISED 11114 (PAGE 7 OF 11) 7 2 r RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 7 OF 11) Produ VilbapFotmeby LpLogix iso7o Fleean Mile Road Fmw Mi gen491X?e Newport Sbom Property Address: 6001 Newport Shores Drive, Newport Beach, CA 92663 Date: June 30, 2015 23. FINAL VERIFICATION OF CONDITION: Buyer shall have the right to make a final verification of the Property within 5 (or , )Days Prior to Close Of Escrow, NOT AS A CONTINGENCY OF THE SALE, but solely to confirm: (t) the Property is maintained pursuant to paragraph 16; (It) Repairs have been completed as agreed; and (tit) Seller has complied with Settees other obligations under this Agreement (C.A.R. Form VP). 24. PRORATIONS OF PROPERTY TAXES AND OTHER ITEMS: Unless otherwise agreed in writing, the following items shall be PAID CURRENT and prorated between Buyer and Seller as of Close Of Escrow: real property taxes and assessments, interest, rents, HOA regular, special, and emergency dues and assessments imposed prior to Close Of Escrow, premiums on Insurance assumed by Buyer, payments on bonds and assessments assumed by Buyer, and payments on Mello-Rcos and other Special Assessment District bonds and assessments that are now a lien. The following items shall be assumed by Buyer WITHOUT CREDIT toward the purchase price: prorated payments on Mello-Roos and other Special Assessment District bonds and assessments and HOA special assessments that are now a lien but not yet due. Property will be reassessed upon change of ownership. Any supplemental tax bills shall be paid as follows: (1) for periods after Close Of Escrow, by Buyer, and (it) for periods prior to Close Of Escrow, by Seller (see C.A.R. Form SPT or SBSA for further information). TAX BILLS ISSUED AFTER CLOSE OF ESCROW SHALL BE HANDLED DIRECTLY BETWEEN BUYER AND SELLER. Proration shall be made based on a 30-day month. 25. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon, and Inure to the benefit of, Buyer and Seller and their respective successors and assigns, except as otherwise provided herein. 26. COPIES: Seller and Buyer each represent that Copies of all reports, documents, certificates, approvals and other documents that are furnished to the other are true, correct and unaltered Copies of the original documents, if the originals are in the possession of the furnishing party. 27. BROKERS: A. COMPENSATION: Seller or Buyer, or both, as applicable, agrees to pay compensation to Broker as specified in a separate written agreement between Broker and that Seller or Buyer. Compensation is payable upon Close Of Escrow, or if escrow does not dose, as otherwise specified in the agreement between Broker and that Seller or Buyer. B. SCOPE OF DUTY: Buyer and Seller acknowledge and agree that Broker: (i) Does not decide what price Buyer should pay or Seller should accept; (11) Does not guarantee the condition of the Property; (iii) Does not guarantee the performance, adequacy or completeness of inspections, services, products or repairs provided or made by Seller or others: (iv) Does not have an obligation to conduct an inspection of common areas or areas off the site of the Property; (v) Shall not be responsible for identifying defects on the Property, in common areas, or offsite unless such defects are visually observable by an Inspection of reasonably accessible areas of the Property or are known to Broker, (W) Shall not be responsible for Inspecting public records or permits concerning the title or use of Property; (vil) Shall not be responsible for identifying the location of boundary lines or other items affecting title; (viii) Shall not be responsible for verifying square footage, representations of others or Information contained in Investigation reports, Multiple Listing Service, advertisements, flyers or other promotional material; (tx) Shall not be responsible for determining the fair market value of the Property or any personal property included in the sale; (x) Shall not be responsible for providing legal or tax advice regarding any aspect of a transaction entered into by Buyer or Seiler, and (xi) Shall not be responsible for providing other advice or information that exceeds the knowledge, education and experience required to perform real estate licensed activity. Buyer and Seller agree to seek legal, tax, insurance, title and other desired assistance from appropriate professionals. C. BROKERAGE: Neither Buyer nor Seller has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker (individual or corporate), agent, finder, or other entity, other than as specified in this Agreement, In connection with any act relating to the Property, including, but not limited to, inquiries, Introductions, consultations and negotiations leading to this Agreement. Buyer and Seller each agree to indemnify and hold the other, the Brokers specified herein and their agents, harmless from and against any costs, expenses or liability for compensation claimed inconsistent with the warranty and representation in this paragraph. 28. REPRESENTATIVE CAPACITY: if one or more Parties Is signing the Agreement in a representative capacity and not for him/herself as an Individual then that Party shall so indicate in paragraph 40 or 41 and attach a Representative Capacity Signature Disclosure (C.A.R. Forth RCSO). Wherever the signature or Initials of the representative identified in the RCSD appear on the Agreement or any related documents, it shall be deemed to be in a representative capacity for the entity described and not in an individual capacity, unless otherwise indicated. The Party acting in a representative capacity (i) represents that the entity for which that party is acting already exists and (ti) shall Deliver to the other Party and Escrow Holder, within 3 Days After Acceptance, evidence of authority to act in that capacity (such as but not limited to: applicable portion of the trust or Certification Of Trust (Probate Code § 18100.5), letters testamentary, court order, power of attorney, corporate resolution, or formation documents of the business entity). 29. JOINT ESCROW INSTRUCTIONS TO ESCROW HOLDER: A. The following paragraphs, or applicable portions thereof, of this Agreement constitute the joint escrow Instructions of Buyer and Seller to Escrow Holder, which Escrow Holder is to use along with any related counter offers and addenda, and any additional mutual Instructions to dose the escrow: paragraphs 1, 3, 4B, 5A, 6, 7, 9, 11 C, 18, 19G, 24, 27A, 28, 29, 35, 38, 39, 40, 41 and paragraph D of the section titled Real Estate Brokers on page 11. If a Copy of the separate compensation agreement(s) provided for in paragraph 27A, or paragraph D of the section titled Real Estate Brokers on page 11 is deposited with Escrow Holder by Broker, Escrow Holder shall accept such agreements) and pay out from Buyer's or Setters funds, or both, as applicable, the Brokers compensation provided for in such agreement(s). The terms and conditions of this Agreement not set forth in the specified paragraphs are additional matters for the information of Escrow Holder, but about which Escrow Holder need not be concerned. Buyer and Seller will receive Escrow Holders general provisions. If any, directly from Escrow Holder and will execute such provisions within the time specified in paragraph 7C(1)(c). To the extent the general provisions are inconsistent or conflict with this Agreement the general provisions will control as to the duties and obligations of Escrow Holder only. Buyer and Seller will execute additional instructions, documents and forms provided by Escrow Holder that are reasonably necessary to close the escrow and, as directed by Escrow Holder, shall pay to Escrow Holder or HOA or HOA management company or others any fee required by paragraphs 7, 11 or elsewhere in the Agreement. B. A Copy of this Agreement including any counter offer(s) and addenda shall be delivered to Escrow Holder within 3 Days After Acceptance (or ). Buyer and Seller authorize Escrow Holder to accept and rely on Copies and Signatures as defined in this Agreement as originals, to open escrow and for other purposes of escrow. The validity of this Agreement as between Buyer and Seller is not affected by whether or when Escrow Holder Signs this Agreement Escrow Holder shall provide Setters Statement of Information to Title company when received from Seller. If Seller delivers an affidavit to Escrow Holder to satisfy Sellers FIRPTA obligation under paragraph 11 C, Escrow Holder shall deliver to Buyer a Qualified Substitute statement that complies with federal Law. C. Brokers areyy� to the escrow for the sole purpose of compensation pursuant to paragraph 27A and paragraph D of the section titled Real fe Brokers on page 11. Buyer and Seller irrevocably assign to Brokers compensation specified In paragraph 27A, and irrevo b mstruct Escrow Holder to disburse those funds to 8mkers at Close Of Escrow or u rat to any Buyers Initial s ( ( ) Sellers Iniaals 1_)( t '� RIPA REVISED 1114 (PAGE B OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 8 OF 11) Pmduced"thapFmmebynpla& 18070 Fifteen Mile Road Fraser MMdu9an48028 xwwzlolro mm N.'en she. Property Address: 6001 Newport Shores Drive Newport Beach CA 92663 Date: June 30, 2015 other mutually executed cancellation agreement. Compensation instructions can be amended or revoked only with the written consent of Brokers. Buyer and Seller shall release and hold harmless Escrow Holder from any liability resulting from Escrow Holder's payment to Broker(s) of compensation pursuant to this Agreement. D. Upon receipt, Escrow Holder shall provide Seller and Seller's Broker verification of Buyers deposit of funds pursuant to paragraph 3A and 3B. Once Escrow Holder becomes aware of any of the following, Escrow Holder shall immediately notify all Brokers. (1) if Buyers initial or any additional deposit or down payment is not made pursuant to this Agreement, or is not good at time of deposit with Escrow Holder, or (ii) if Buyer and Seller instruct Escrow Holder to cancel escrow. E. A Copy of any amendment that affects any paragraph of this Agreement for which Escrow Holder is responsible shall be delivered to Escrow Holder within 3 Days after mutual execution of the amendment 30. REMEDIES FOR BUYER'S BREACH OF CONTRACT: A. Any clause added by the Parties specifying a remedy (such as release or forfeiture of deposit or making a deposit non- refundable) for failure of Buyer to complete the purchase in violation of this Agreement shall be deemed invalid unless the clause independently satisfies the statutory liquidated damages requirements set forth in the Civil Code. B. LIQUIDATED DAMAGES: If Buyer fails to complete this purchase because of Buyer's default, Seller shall retain, as liquidated damages, the deposit actually paid. If the Property Is a dwelling with no more than four units, one of which Buyer intends to occupy, then the amount retained shall be no more than 3% of the purchase price. Any excess shall be returned to Buyer. Release of funds will require mutual, Signed release instructions from both Buyer and Seller, judicial decision or arbitration award. AT TIME OF ANY INCREASED DEP IT BUYER AND SELLER SHALL SIGN A SEPARATE LIQUIDATED DAMAGES PROVISION INCORPORATING THE INCREA EPOSIT AS LIQUIDATED DAMAGES (C.A.R. FORM RID uyers Sellers Initial r7 � Initials / 31, DISPUTE RESOLUTION: B A. MEDIATION: The Parties agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action through the CA.R. Consumer Mediation Center (wwi consumermediation.org) or through any other mediation provider or service mutually agreed to by the Parties. The Parties also agree to mediate any disputes or claims with Broker(s), who, in writing, agree to such mediation prior to, or within a reasonable time after, the dispute or claim is presented to the Broker. Mediation fees, if any, shall be divided equally among the Parties involved. If, for any dispute or claim to which this paragraph applies, any Party (i) commences an action without first attempting to resolve the matter through mediation, or (li) before commencement of an action, refuses to mediate after a request has been made, then that Party shall not be entitled to recover attorney fees, even if they would otherwise be available to that Party in any such action. THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED. Exclusions from this mediation agreement are specified in paragraph 31C. B. ARBITRATION OF DISPUTES: The Parties agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration. The Parties also agree to arbitrate any disputes or claims with Broker(s), who, in writing, agree to such arbitration prior to, or within a reasonable time after, the dispute or claim is presented to the Broker. The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of residential real estate Law experience, unless the parties mutually agree to a different arbitrator. The Parties shall have the right to discovery In accordance with Code of Civil Procedure §1283.05. In all other respects, the arbitration shall be conducted in accordance with Title 9 of Part 3 of the Code of Civil Procedure. Judgment upon the award of the arbitrator(s) may be entered into any court having jurisdiction. Enforcement of this agreement to arbitrate shall be governed by the Federal Arbitration Act Exclusions from this arbitration agreement are specified In paragraph 31C. "NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY." "WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE' ITRATION OF DISPUTES' PROVISION TO NEUTRAL�TRATION." Buyer's Initials i` Sellers Initials ! C. ADDITIONAL MEDIATION AND ARBITRATION TERMS: (1) EXCLUSIONS: The following matters are excluded from mediation and arbitration: (i) ajudicial or non- udiciai foreclosure or other action or proceeding to enforce a deed of trust mortgage or installment land sale contract as defined in Civil Code §2985; (111 an unlawful detainer action; and (iii) any matter that is within the jurisdiction of a probate, small claims or bankruptcy court (2) PRESERVATION OF ACTIONS: The following shall not constitute a waiver nor violation of the mediation and arbitration provisions: (f) the filing of a court action to preserve a statute of limitations; (ii) the filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other provisional remedies; or (iii) the filing of a mechanic's lien. (3) BROKERS: Brokers shall not be obligated nor compelled to mediate or arbitrate unless they agree to do so in writing. Any S�rok ( participating in mediation or arbitration shall not be deemed a party to the Agreement. Any Buyer's Initials ( ( ) Seller's Initials RIPA REVISED 11 14 (PAGE 9 OF 11) - r RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 9 OF 11) PM.cetl with nPFomns, by apLogix 18070 Fifteen Mile Raaq Fraser Mnugan 48026 21O Mi Mn Ne.part sm. Property Address. 6001 Newport Shores Drive Newport Beach, CA 92663 Date: June 30, 2015 32. SELECTION OF SERVICE PROVIDERS: Brokers do not guarantee the performance of any vendors, service or product providers ('Providers'), whether referred by Broker or selected by Buyer, Seller or other person. Buyer and Seller may select ANY Providers of their own choosing. 33. MULTIPLE LISTING SERVICE ("MLS"): Brokers are authorized to report to the MLS a pending sale and, upon Close Of Escrow, the sales price and other terns of this transaction shall be provided to the MLS to be published and disseminated to persons and entities authorized to use the Information on terms approved by the MLS. 34. ATTORNEY FEES: In any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorneys fees and costs from the non -prevailing Buyer or Seiler, except as provided in paragraph 31A. 35. ASSIGNMENT: Buyer shall not assign all or any part of Buyers interest in this Agreement without first having obtained the written consent of Seller. Such consent shall not be unreasonably withheld unless otherwise agreed in writing. Any total or partial assignment shall not relieve Buyer of Buyers obligations pursuant to this Agreement unless otherwise agreed in wiring by Seller (C.A.R. Form AOAA). 36. EQUAL HOUSING OPPORTUNITY: The Property is sold in compliance with federal, state and local anti -discrimination Laws. 37. TERMS AND CONDITIONS OF OFFER: This is an offer to purchase the Property on the above terms and conditions. The liquidated damages paragraph or the arbitration of disputes paragraph is incorporated in this Agreement if initialed by all Partes or if incorporated by mutual agreement in a counter offer or addendum. If at least one but not all Parties initial, a counter offer is required until agreement is reached. Seller has the right to continue to offer the Property for sale and to accept any other offer at any time prior to notification of Acceptance. Buyer has read and acknowledges receipt of a Copy of the offer and agrees to the confirmation of agency relationships. If this offer is accepted and Buyer subsequently defaults, Buyer may be responsible for payment of Brokers' compensation. This Agreement and any supplement, addendum or modification, including any Copy, may be Signed in two or more counterparts, all of which shall constitute one and the same writing. 38. TIME OF ESSENCE; ENTIRE CONTRACT; CHANGES: Time Is of the essence. All understandings between the Parties are incorporated in this Agreement Its terms are intended by the Parties as a final, complete and exclusive expression of their Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement If any provision of this Agreement is held to be ineffective or invalid, the remaining provisions will nevertheless be given full force and effect Except as otherwise specified, this Agreement shall be interpreted and disputes shall be resolved in accordance wth the Laws of the State of California. Neither this Agreement nor any provision in it may be extended, amended, modified, altered or changed, except in writing Signed by Buyer and Seller. 39, DEFINITIONS: As used in this Agreement A. "Acceptance" means the time the offer or final counter offer is accepted in writing by a Party and is delivered to and personally received by the other Party or that Party's authorized agent in accordance with the terms of this offer or a final counter offer. B. "Agreement" means this document and any counter offers and any incorporated addenda, collectively forming the binding agreement between the Parties. Addenda are incorporated only when Signed by all Parties. C. "C.A.R. Form" means the most current version of the specific form referenced or another comparable form agreed to by the parties. 0. "Close Of Escrow" or "COE" means the date the grant deed, or other evidence of transfer of fitle, is recorded. E. "Copy" means copy by any means including photocopy, NCR, facsimile and electronic, F. "Days" means calendar days. However, after Acceptance, the last Day for performance of any act required by this Agreement (including Close Of Escrow) shall not include any Saturday, Sunday, or legal holiday and shall instead be the next Day. G. "Days After" means the specified number of calendar days after the occurrence of the event specified. not counting the calendar date on which the specified event occurs, and ending at 11:59 PM on the final day. H. "Days Prior" means the specified number of calendar days before the occurrence of the event specked, not counting the calendar date on which the specified event is scheduled to occur. 1. "Deliver", "Delivered" or "Delivery", unless otherwise specified in writing, means and shall be effective upon: personal receipt by Buyer or Seller or the individual Real Estate Licensee for that principal as specified in the section tilled Real Estate Brokers on pagel 1, regardless of the method used (i.e., messenger, mall, email, fax, other). J. "Electronic Copy" or "Electronic Signature" means, as applicable, an electronic copy or signature complying with California Law. Buyer and Seller agree that electronic means will not be used by either Parry to modify or alter the content or integrity of this Agreement without the knowledge and consent of the other Party. K. "Love' means any law, code, statute, ordinance, regulation, rule or order, which is adopted by a controlling city, county, state or federal legislative, judicial or executive body or agency. L. "Repairs" means any repairs (including pest control), alterations, replacements, modifications or retrofitting of the Property provided for under this Agreement M. "Signed" means either a handwritten or electronic signature on an original document, Copy or any counterpart, 40. EXPIRATION OF OFFER: This offer shall be deemed revoked and the deposit, ff any, shag be returned to Buyer unless the offer is Signed by Seller and a Copy of the Signed offer is personally received by Buyer, or by , who is authorized to receive it, by 5:00 PM on the third Day after this offer is signed by Buyer (or by AM! H PM, on (dale)). ❑ One or more Buyers is signing the Agreement in a representative capacity and not for him herself as an individual. See attached Representative Capacity Signature Discigdurg,(CA.R. Form RCSD) for additional terns. Date 7/2MF (Print name) Como Date (Print name) _ BUYER BUYER ❑Addibonal Signature Addendum attached (C.AR. Form ASA). Seller's Initials (_)( RIPA REVISED 11/14 (PAGE 10 OF 11) RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 10 OF 11) P,atlue wit], wF4nliV 4y zpl-ogiz 10070 Fiftow We Rosa. Fn Midili; 0 4WN www fnl prix CM Ne 'ash.. Property Address: 6001 Newport Shores Drive, Newport Beach, CA 92663 Date: June 30, 2015 41. ACCEPTANCE OF OFFER: Seller warrants that Seiler is the owner of the Property, or has the authority to execute this Agreement. Seller accepts the above offer and agrees to sell the Property on the above terms and conditions, and agrees to the above confirmation of agency relationships. Seller has read and acknowledges receipt of a Copy of this Agreement, and authorizes Broker to Deliver a Signed Copy to Buyer. ❑ (If checked) SELLER'S ACCEPTANCE 13 SUBJECT TO ATTACHED COUNTER OFFER (C.A.R. Form SCO or SMCO) DATED: ❑ One or more Sellers is signing the Agreement in a representative capacity and not for him/herself as an Individual. See attached Representative Capacity Signature Disclosure (C,A.R. Form R�CS�D) for additional terms. Date SELLER (Print name) Foley, at a/. Date Z� SELLER c (Print name) ❑Atl ' IgIn Addendum attached (C.AIR Form ASA). o not initial if making a counter offer.) CONFlRMATION OF ACCEPT C A py of Accepts ce was I personally received by Buyer or Buyers authorized agent Signed (date) �� ae� Af PM. A tNnding Agreement is created when a Copy of Signed Accept s ally receiv y 8uye or yen's authorized agent whether or not confirmed in this document. Compl ion of this confirmation is not legally required in order to create a binding Agreement; it is solely intended to evidence the data that Confirmation of Acceptance has occurred. REAL ESTATE BROKERS: A. Real Estate Brokers are not parties to the Agreement between Buyer and Seller. B. Agency relationships are confirmed as stated In paragraph 2. C. If specified in paragraph 3A(2), Agent who submitted the offer for Buyer acknowledges receipt of deposit. D. COOPERATING BROKER COMPENSATION: Listing Broker agrees to pay Cooperating Broker (Selling Firm) and Cooperating Broker agrees to accept, out of Listing Broker's proceeds in escrow, the amount specified in the MLS, provided Cooperating Broker is a Participant of the MLS in which the Property is offered for sale or a reciprocal MLS. If Listing Broker and Cooperating Broker are not both Participants of the MLS, or a reciprocal MLS, in which the Property is offered for sale, then compensation must be specified in a separate written agreement (C.A.R. Form CBC). Declaration of License and Tax (C.A.R. Form DLT) may be used to document that tax reporting will be required or that an exemption exists. Real Estate Broker (Selling Firm) Berkadia Real Estate Advisors Inc. CalBRE Lic. #1931050 By C. Srombal CalBRE Lic. # 972129 Date By CaIBRE Lic. # Date Addres Birch Street, Sulfa 400 CityNewport Beach State , 2660 Telephone f949)223.0606 Fax X9)223-0617 E-mail steven.brombalCMberkadia.com Real Estate Broker (Listing Firm) Berkadia Real Estate Advisors Inc. CalBRE Lic. #1931050 By teen '. Brombal CalBRE Lia # 972129 Date ByCalBRE Lic. # Date Addre 0 Birch Street. Suite 4M Z CitvNewport Beach State 01#1_Zripr=60 Telephone (949)223.0606 Fax (949)223-0617 E-mail steven.brorobalk.&AerkadiaLcom ESCROW HOLDER ACKNOWLEDGMENT: Escrow Holder acknowledges receipt of a Copy of this Agreement, (if checked, ❑ a deposit in the amount of $ I. counter offer numbers ❑ Seller's Statement of Information and and agrees to act as Escrow Holder subject to paragraph 29 of this Agreement, any supplemental escrow instructions and the terms of Escrow Holder's general provisions. Escrow Holder is advised that the date of Confirmation of Acceptance of the Agreement as between Buyer and Seller is Escrow Holder Escrow # By Date Address PhoneiFaYJE-mail Escrow Holder has the following license number # ❑ Department of Business Oversight, [] Department of Insurance, LJ Bureau of Real Estate. PRESENTATION OF OFFER: ( 1 Listing Broker presented this offer to Seller on (date). Broker or Designee Initials REJECTION OF OFFER: ( I No counter offer Is being made. This offer was rejected by Seller on (date). Sellers Initials ®2014, California Association of REALTORS®, Inc. United States copyright law (Title 17 U.S. Code) forbids the unaugwrsed distribution, display and reproduction of this form, or any portion thereon, by photocopy machine or any other means, including facsimke or computerized formats. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAXADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. Published and Distributed by Buyers Acknowledge that page 10 is part of - REAL ESTATE BUSINESS SERVICES, INC. this Agreement I )( ) x a subsidiary ofthe CALIFORNIA ASSOCIArtON OF REALTORS® 525 South Virgil Avenue, Los Angeles, Cali fomla 90020 Reviewed by _ RIPA REVISED 11114 (PAGE 11 OF 11) Broker or Designee RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT (RIPA PAGE 11 OF 11) Produced wtm zipFamieby apLWx 78070 Fifteen Mile Road. Fraser. Michigan 4ae2e www Aol ook,om Newport Saone CALIF O R N I A BUYER'S INSPECTION ADVISORY ASSOCIATION O F R E A L T O R S(C.A.R. Form BIA, Revised 11114) Property Address: 6001 Newport Shores Drive, Newport Beach CA 92663 ('Property"). 1. IMPORTANCE OF PROPERTY INVESTIGATION: The physical condition of the land and improvements being purchased is not guaranteed by either Seller or Brokers. You have an affirmative duty to exercise reasonable care to protect yourself, including discovery of the legal, practical and technical implications of disclosed facts, and the investigation and verification of information and facts that you know or that are within your diligent attention and observation. A general physical inspection typically does not cover all aspects of the Property nor items affecting the Property that are not physically located on the Property, if the professionals recommend further investigations, including a recommendation by a pest control operator to inspect inaccessible areas of the Property, you should contact qualified experts to conduct such additional investigations. 2. BROKER OBLIGATIONS: Brokers do not have expertise in all areas and therefore cannot advise you on many items, such as those listed below. If Broker gives you referrals to professionals, Broker does not guarantee their performance. 3. YOU ARE STRONGLY ADVISED TO INVESTIGATE THE CONDITION AND SUITABILITY OF ALL ASPECTS OF THE PROPERTY, INCLUDING BUT NOT LIMIITED TO THE FOLLOWING. YOU DO NOT DO SO, YOU ARE ACTING AGAINST THE ADVICE OF BROKERS. A. GENERAL CONDITION OF THE PROPERTY, ITS SYSTEMS AND COMPONENTS: Foundation, roof (condition, age, leaks, useful life), plumbing, heating, air conditioning, electrical, mechanical, security, pool/spa (cracks, leaks, operation), other structural and nonstructural systems and components, fixtures, built-in appliances, any personal property included in the sale, and energy efficiency of the Property. B. SQUARE FOOTAGE, AGE, BOUNDARIES: Square footage, room dimensions, lot size, age of Improvements and boundaries, Any numerical statements regarding these items are APPROXIMATIONS ONLY and have not been verified by Seller and cannot be verified by Brokers. Fences, hedges, walls, retaining walls and other barriers or markers do not necessarily identify true Property boundaries. C. WOOD DESTROYING PESTS: Presence of, or conditions likely to lead to the presence of wood destroying pests and organisms. D. SOIL STABILITY; Existence of fill or compacted soil, expansive or contracting soil, susceptibility to slippage, settling or movement, and the adequacy of drainage. E. WATER AND UTILITIES; WELL SYSTEMS AND COMPONENTS;WASTE DISPOSAL: Water and utility availability, use restrictions and costs. Water quality, adequacy, condition, and performance of well systems and components. The type, size, adequacy, rapacity and condition of sewer and septic systems and components, connection to sewer, and applicable fees. F. ENVIRONMENTAL HAZARDS: Potential environmental hazards, including, but not limited to, asbestos, lead-based paint and other lead contamination, radon, methane, other gases, fuel oil or chemical storage tanks, contaminated soil or water, hazardous waste, waste disposal sites, electromagnetic fields, nuclear sources, and other substances, materials, products, or conditions (including mold (airborne, toxic or otherwise), fungus or similar contaminants). G. EARTHQUAKES AND FLOODING: Suscepsbility of the Property to earthquake/seismic hazards and propensity of the Property to flood. H. FIRE, HAZARD AND OTHER INSURANCE: The availability and cost of necessary or desired insurance may vary. The location of the Property in a seismic, flood or fire hazard zone, and other conditions, such as the age of the Property and the claims history of the Property and Buyer, may affect the availability and need for certain types of insurance. Buyer should explore insurance options early as this information may affect other decisions, including the removal of loan and inspectlon contingencies. 1. BUILDING PERMITS, ZONING AND GOVERNMENTAL REQUIREMENTS: Permits, Inspections, certificates, zoning, other governmental limitations, restrictions, and requirements affecting the current or future use of the Property, its development or size. J. RENTAL PROPERTY RESTRICTIONS: Some cities and counties impose restrictions that limit the amount of rent that can be charged, the maximum number of occupants, and the right of a landlord to terminate a tenancy. Deadbolt or other locks and security systems for doors and windows, Including window bars, should be examined to determine whether they satisfy legal requirements. K. SECURITY AND SAFETY: State and local Law may require the installation of barriers, access alarms, self -latching mechanisms and/or other measures to decrease the risk to children and other persons of existing swimming pools and hot tubs, as well as various fire safety and other measures concerning other features of the Property. L. NEIGHBORHOOD, AREA, SUBDIVISION CONDITIONS; PERSONAL FACTORS: Neighborhood or area conditions, including schools, law enforcement, crime statistics, registered felons or offenders, fire protection, other government services, availability, adequacy and cost of Internet connections or other technology services and installations, commercial, industrial or agricultural activities, existing and proposed transportation, construction and development that may affect noise, view, or traffic, airport noise, noise or odor from any source, wild and domestic animals, other nuisances, hazards, or circumstances, protected species, wetland properties, botanical diseases, historic or other governmentally protected sites or improvements, cemeteries, facilities and condition of common areas of common interest subdivisions, and possible lack of compliance with any governing documents or Homeowners' Association requirements, conditions and influences of significance to certain cultures and/or religions, a d personal needs, requirements and preferences of Buyer. By signing bei uyers acknowledge that they have read, understand, accept and have received a Copy of this Advisory. Buyers are ap6opftged to read it carefully. Buyer _ Buyer Community Development Partners ® 1991-2004, California Association of REALTORS®, Inc. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (OAR.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. Published and Distributed by REAL ESTATE BUSINESS SERVICES, INC. Reviewed by Date a substdiary of the Cablomla Association or REALTORS® ` . 525 South Virgil Avenue, Los Angeles, Calgomia 90020 ` BIA REVISED 11/14 (PAGE 1 OF 1) 1211 BUYER'S INSPECTION ADVISORY (BIA PAGE 1 OF 1) m I Bhhatlh Reel Eehfe Ativa9n, 14e Newport 0eaeh, Se008hch Shee49elh JahO NewpotlBHc0. CA936tla PM499492".e6e6 Fax 94922i.6617 Newport Shorty i CALIFORNIA ASSOCIATION ADDENDUM OF REALTORS" (C.A.R. Form ADM, Revised 4)12) No. 1 The following terms and conditions are hereby incorporated in and made a part of they ❑ Residential Purchase Agreement, ❑ Manufactured Home Purchase Agreement, ❑ Business Purchase Agreement, ❑ Residential Lease or Month -to -Month Rental Agreement, ❑ Vacant Land Purchase Agreement, 'Lg Residential Income Property Purchase Agreement, ❑ Commercial Property Purchase Agreement, ❑ Other June 30, 2015 , on property known as If wnlcn wmnhunity nevem menr rarrners Is reremea To as t esuyen 1 enanr-) and Foley, et &L Is referred to as ("Seller/Landlord"). 11 8uygr9qpos& SLIM will dMosit intoone hundred f. ./. ($100 ,000) 1: u f. .). i ii/ � f•l f• ••u The foregoing terms and conditions are hereby agreed to, and the undersigned acknowledge receipt of a copy of this document. J Date 7/2/15 Date Buyerrrenant z,SellerlLandlord Commve�ry DovwoFmem P". BuyerrTenant Seller/Landlord The copyright laws of the United States (nag 17 U.S. Code) forbid the unauthorized reproduction of We form, or any portion thereof, by photocopy machine or any other means. Including faca m le or Computerized formats. Copyrights 1986-2012, CALIFORNIA ASSOCIATION OF REALTORS@, INC. ALL RIGHTS RESERVED. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION, A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. This forth Is evaRable For use by Ne engre real estate Industry. it In not Intended to Identify, the user as a REALTOR®. REALTORS Is a registered wllsobue membership meds Wch may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® vrIo subscribe tone Code of Ethics. Publkhed and' 115U bebd W U REALESTATE BUINESSSERVCES. INC 525 SouthyVL41Aenuee/rlld Aseoeia, Caffmia lKOM51 �� = .5255euN IAvanue. los An alas raMomts 9riD2g ReWewedb _Date ADM REVISED 4112 (PAGE 1 OF 1) �mea„emN° ADDENDUM (ADM PAGE 1 OF 1) Bereadl•Reel Edare AdrWrx rore.Newport anc6.5aW Bgla SveH.Sulre J9W Newpe,nBnch,CA 926®0 Ptpne 919.221.0606 F. 9a9.2n.017 Ncv,W"she. Qp Commonwealth° LAND TITLE COMPANY Commonwealth Land Title Company 4100 Newport Place Dr, Suite 120 Newport Beach, CA 92660 Phone: (949) 724-3145 ESCROW AMENDMENT/SUPPLEMENT Escrow Number: 09291788-918-JES Date: August 5, 2015 Property Address: 6001 Newport Shores Drive, Newport Beach, CA 92663 Escrow Officer: Jov Eaton TO: Commonwealth Land Title Company My previous instructions In the above numbered escrow are hereby modified and/or supplemented in the following manner: Buyer has removed all books and records contingency as referenced in the Contingency Removal dated 8-3-15. Buyer will remove the physical Inspection contingency by 8-14-15; upon removal of physical inspection contingency Buyer will release out of escrow non-refundable $5,000 to Buyer for any reason other than act of God or nature precluding transfer of title or in the event the Sellers cannot transfer marketable title to the property. Escrow will be given instructions to forward release of deposit funds to Seller accommodator account. Buyer expects City funding approval by September 23, 2015. On that date provided City funding approval is obtained, Buyer will remove City Funding contingency/all Due Diligence contingency and $45,000 of Buyers deposit shall be released to Sellers nonrefundable. Within 15 days of approval by City of funding commitment, Buyer will release $50,000 nonrefundable to Seller. Escrow to close 30 days from City council approval, tentatively October 23, 2015 All other terms and Conditions not in direct conflict with the foregoing remain unchanged. Each of the undersigned states that he/she/they have read the foregoing instructions and understands and agrees to them in their entirety. BUYER: Communi fl velopment partners 6y: Name: tzric Paine Title: SELLER: Foley✓Et al By: ' iily� Danny P. Holey ESCROW AMENDMENT Escrow Number: Ra Ot t ISk Date: October 22, 2015 Property Address: (coot b3 Escrow Officer: lon,� r%(&6 5 R 1. Buyer and Seiler hereby agree that Close of Escrow is extended to occur on or before December 31, 2015. 2. Escrow Holder currently holds $95,000.00 of Buyer's refundable earnest money deposit, $50,000.00 of which shall become non-refundable upon Buyer's receipt of City Council approval, and the remaining $45,000.00 shall become non-refundable 15 days thereafter. Buyer shall notify Seller and Escrow Holder upon receipt of the City Council approval. 3. Buyer shall immediately deposit with Escrow Holder $3,600.00, representing rental funds for the vacant unit #1 at the rate of $50.00 per day, $1,500.00 per month for the period beginning October 21, 2015 and continuing to the date of closing of escrow. Escrow Holder is hereby authorized and instructed to release $2,000.00 on November 1, 2015, representing the prorated rent from October 21, 2015 and rent for the month of November, and further disburse on December 1, 2015 $1,500.00, representing the rent for December. 4. Additionally Buyer will deposit into escrow immediately upon execution of this agreement the sum of $6,400 to cover any vacancies. Seller will provide a rent roll to escrow with a rent disbursement request at the first of each month to cover any vacant units. Escrow will disperse funds to Seller each month if needed until the close of escrow 12/31/15. Any remaining balance of funds (of this $6,400) in the account at close of escrow shall be returned to the Buyer. Seller agrees to keep any vacant units vacant and not rent them. Buyer shall be fully responsible to reimburse Seller the rent of each vacant unit at a rental rate of $1,500.00 per month to the close of escrow on or before December 31, 2015. 5. At close of escrow for unit #1 and any other vacant units, Escrow Holder shall debit the Seller and credit the Buyer for any prepaid but unused rent from date of close of escrow through December 31, 2015. 6. All other terms and conditions not in direct conflict with the foregoing remain unchanged. Eric Paine REMOTE CSID DURATION PAGES 07:40 PM EDT 39 1 ESCROW AMENDMENT Number: ga q t -1-9 $ yAddress: Uoolo-ItuiStt�bPw1+t v.ewfo_t RA, u 4L(ofr3 Date: October 22, 2015 Escrow Officer:$rr;� e� �eu.rSv- YL4 r4 F)Lk rLµt , 1 Buyer and Seller hereby agree that pose of Escrow is extended to occur on or before December 31, 2015. 2. Escrow Holder currently holds $95,000.00 of Buyer's refundable earnest money deposit, $50,000.00 of which shall become non-refundable upon Buyer's receipt of City Council approval, and the remaining $45,000.00 shall become non-refundable 15 days thereafter, Buyer shall notify Seller and Escrow Holder upon receipt of the City Council approval. 3. Buyer shall immediately deposit with Escrow Holder $3,600.00, representing rental funds for the vacant unit in at the rate of $50.00 per day, $1,500.00 per month for the period beginning October 21, 2015 and continuing to the date of closing of escrow. Escrow Holder is hereby authorized and Instructed to release $2,000.00 on November 1, 2015, representing the prorated rent from October 21,201S and rent for the month of November, and further disburse on December 1, 2015 $1,50D.00, representing the rent for December. 4. Additionally Buyer will deposit into escrow immediately upon execution of this agreement the sum of $6,400 to cover any vacancies. Seller will provide a rent roll to escrow with a rent disbursement request at the first of each month to cover any vacant units. Escrow will disperse funds to Seiler each month if needed until the dose of escrow 12/31/15. Any remaining balance of funds (of this $6,400) in the account at dose of escrow shall be returned to the Buyer. Seller agrees to keep any vacant units vacant and not rent them. Buyer shall be fully responsible to reimburse Seiler the rent of each vacant unit at a rental rate of $1,500.00 per month to the dose of escrow on or before December 31, 2015, S. At close of escrow for unit til and any other vacant units, Escrow Holder shall debit the Seller and credit the Buyer for any prepaid but unused rent from date of dose of escrow through December 31, 2015. 6. All other terms and conditions not in direct conflict with the foregoing remain unchanged. °^ INBOUND NOTIFICATION : FAX RECEIVED SUCCESSFULLY °^ TIME RECEIVED REMOTE CSID DURATION PAGES STATUS October 28, 2015 12:55:08 PM EDT 7078231233 43 1 Received 10/28/2015 09:55 707R7a19aa ATM leen rcurco o..K .. 1.,. i:24.11 REMOTE CSID ESCROW AMEWMEW PAGES STATUS 1 Received 14q -22.3-4a 1'4 Escrow Number, q1q k-79% Date: October 22, I015 Propel tgAddrms: W0i clew or.�Skvl,rl-plr,v4 EscrwtrOflicer bR ax r�er+.5va ritw�lrA 3�Ck, ca42[ab3 SueAFILItau4, L Buyer area Seger hereby agree that Ck ae of iEserow Is attended to occur on or before December 91, 2015. Z Esaew (folder currently holds $95,000.00 ol'tbtWs refundable eamest matey deposit. $50,000,00 of which shag become non-refundable upon Buyer's receipt or MY Council approval, and the remaining $45,000,00 shell became nownfiAlQabhe 1S days thereafter. Buyer shall no ftSeller and Escrow Holder upon receipt of the CRY Council approval. a. Buyer shag 6nmsdiataly deposit wide Escrow Holder $%600A0, repre:tmtMR rental funds farthe vacant unit #2 at the rite of $50.00 per day, $1,SOOAO per month for the petiod begfnnieg October 22. 2015 and continuing to the date or closing; of escrow. Estrace Holder is hereby suthorind and Notrueced to mlaase $1,000.00 on November 1, 2015, representing the prorated rant kom October 21, 2015 and rent for the month of N&A"d r, and further disburse at December Z. 2015 $1,500A00 representing the tent for December. 4. Additionally Buien will depatit into a wow immamataiy upon e:recvtion omit agreernard the sum of $6,g0Dto cover any VaOndes. Seller wig provide a rent roll to escrow with a nttt disbursement request at the first of each month to cover env vacant unRL Escrow wig disperse funds to Seger each month Hneaded untilUte dose of escrow !I%3MM Any m osInMg balance funds (of this $6AW) in the account at dose of Omer shall be retomad to the Buyer. Seger agreesto keep any vacant units vacant and not rent thorn. Buyer slag be fully rnapensNde to nimbuma Seger the rem of each vacant unit at a renal rate of $1,Mw per month to the class of escrow on or before December 31, 2015. S. At dace ofawrow our gait Dei acrd any otierwont urda, Escrow Holder no dealt the Seller and tYedh the Buyer for any prepaid but unused nun from date of close of escrow through December 81, 2015. 6. AN other term and co nditiohs rout in diners conflict with the fbregoing remain unehennited. ATTACHMENT NO. 12 RELEASE OF CONSTRUCTION COVENANTS 882/036753-0123 2765748.6.12/08/15 -1 - RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: APN: 045-114-15 Space above for Recorder's use Exempt from Recording Fee per Gov. Code§ 27383 RELEASE OF CONSTRUCTION COVENANTS This RELEASE OF CONSTRUCTION COVENANTS ("Release") is made this day of 20_, by the CITY OF NEWPORT BEACH, a California municipal corporation ("City"), NEWPORT VETERANS HOUSING, LP, a California limited partnership ("Developer"). RECITALS in favor of A. Developer is the owner of that certain real property located in the City of Newport Beach, County of Orange, State of California, more particularly described in the legal description attached hereto as Exhibit" A" ("Site"). B. On or about A , 2015, City and Developer entered into that certain Affordable Housing Agreement and Joint Escrow Instructions ("AHA") which provides for Developer to develop an affordable rental housing project on the Site, more particularly described therein as the "Project." C. Pursuant to the AHA, City is required to furnish Developer with this Release upon request by Developer after completion of construction of the Project. D. The issuance by City of this Release shall be conclusive evidence that Developer has complied with the terms of the AHA pertaining to the construction of the Project. NOW, THEREFORE: As provided in the AHA, City does hereby certify that the construction of the Project has been satisfactorily performed and completed, and that such development and construction work complies with the AHA. 882/036753-0123 2765748.6 a 12/16/15 2. This Release does not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of a mortgage or any insurer of a mortgage security money loaned to finance the work of construction of improvements and development of the Site, or any part of thereof. 3. This Release is not a notice of completion as referred to in Section 3093 of the California Civil Code. 882/036753-0123 2765748.6 al2/16/15 IN WITNESS WHEREOF, City has executed this Release as of the date set forth above. ATTEST: m City Clerk "CITY" -V[, 1 VJa'k' �qWt CITY OF ] V 41,A A1, -Q GKJ a California �A�Q City t Ujr, CONSENT TO RECOF���, NEWPORT VETERANS HOUSING, LP, a California limited partnership, owner of the Site described herein, hereby consents to the recordation of this Release against the Site. "DEVELOPER" Newport Veterans Housing LP, a California limited partnership By: CDP Newport LLC, a California limited liability company Its: Administrative General Partner By: Community Development Partners, a California corporation Its: Sole Managing ber By: Zz= Eric Paine Its: CEO By: Mercy House Living Centers, a California nonprofit public benefit corporation Its: Managing General Partner By: Larry aynes Its: President 882/036753-0123 2765748.6 al2/16/15 EXHIBIT "A" LEGAL DESCRIPTION All that certain real property situated in the County of Orange, State of California, commonly known as 6001 Coast Boulevard and described as follows: Lots 11, 12 and 13 in Block 160 of River Section, Newport Beach, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 25 of Miscellaneous Maps, in the office of the County Recorder of said County. EXCEPT therefrom Lot 11 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 13 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 50 feet EXCEPT therefrom Lot 12 all oil, gas, minerals and other hydrocarbon substances lying below a depth shown below but with no right of surface entry, as provided in the deeds of record Depth: 400 feet Assessor's Parcel Number: 045-114-15 882/036753-0123 2765748.6 a12/16/15 CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 2015 before me, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 882/036753-0123 2765748.6 e12/16/15 CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF Ura„ode On becembtr R , 2015 before me, ri!% y:h®rn_rVokri Public personally appeared Eric Pain e who proved to me on the basis of satisfactory evidence to be the person(<whose namQksj(gYare subscribed to the within instrument and acknowledged to me that®i /she/they executed the same in (X her/their authorized capacity(0), and that by( her/their signature(4 on the instrument the person($), or the entity upon behalf of which the person(a') acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. TIM MANGER Commisuon 12099074 �,/p/ p : Nowt PuMk • CWifornt� Signature ,{w: 1N�-09"�� 0” County Comm. E res Feb 8 2019 (Seal) 882/036753-0123 2765748.6 a12116/15 CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF Vrrn?f= On Decewibeir 18 ,2015 before me, Tm WiA®Pr. VokryFGbLT 'c personally appeared L." who proved to me on the of satisfactory evidence to be the person(4) whose name(419/are subscribed to the within instrument and acknowledged to me thatie she/they executed the same in 1 /her/their authorized capacity(i/s), and that by el her/their signature(g) on the instrument the person($), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature W— 882/03675M123 2765748.6 a12/16/15 TIM WINGER Commhs<ion a 2099071 NoWy Pu09e • CNNorMa = omw Cowry Camra. 10M Fob 6.20191 (Seal)