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2500 - Rio Hondo Community Development Corporation - Home Investment Partnership Program AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 11th day of July 2017, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY", and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non-profit corporation, hereinafter referred to as "RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD"); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT"); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92 for the Fiscal Year 2017-18; WHEREAS, the City desires to commit $35,101 of its FY 2017-18 CHDO HOME funds, as well as approximately $96,301 of carryover funds prior to FY 2017-18 to RHCDC and RHCDC desires to accept such commitment of funds for the implementation of the following activities: (1) the acquisition and rehabilitation of existing substandard single- family housing units for resale to first-time homebuyers; or (2) the acquisition and rehabilitation of substandard single-family and/or multi-family rental properties. NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS: Section 1. Subject to the terms of this Agreement, the City agrees to provide to RHCDC and RHCDC agrees to accept from the City CHDO HOME funds (totaling $35,101 of its FY 2017-18 HOME funds, as well as approximately $96,301 of carryover funds prior to FY 2017-18) for the implementation of the following activities: (1) the acquisition and rehabilitation of existing substandard single-family housing units for resale to first-time homebuyers; or (2) the acquisition and rehabilitation of substandard single-family and/or multi-family rental properties. Catalog orI ederal Domestic Assistance(CIDA)Number. 14.259 C IDA 1 i,Ie: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2017-18 Page 2 of 16 Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set-aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and/or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terms shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Parts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). Catalog of federal Domestic Assistance(CFDAJ Number_ 14219 ( FDA Title_ I(OMT,Investment Fannenhips Prourem Rio Hondo Community Development Corporation Community I lousing Development Organization I 2017-18 Page 3 of 16 C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Section 2. The amount of HOME funds the RHCDC may invest on a per-unit basis in affordable housing may not exceed the per-unit dollar limits established by HUD and further defined in 24 CFR-92, Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR 92.355 upon project completion. Section 2. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001-4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related environmental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. Catalog of Fcdcml Domestic Assismm;c{LPDA)Number: 14.239 CI L)A isle: ROMP.I nvcstmcnt Partnerships Urogram Rio Hondo Community Development Corporation Community[lousing Development Organization FY 2017-18 Page 4 of 16 (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally- assisted and conducted programs and activities. (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701u)(Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women-owned business enterprises. (I) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A-87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A-110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations), A-122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non-profit Institutions), and audit requirements described in OMB Circular A-128 implemented at 24 CFR Part 44 and OMB Circulars A-133 (Audits of Institutions of Higher Learning and Other Non-profit Institutions). (J) The RHCDC will provide a drug-free workplace in accordance with the Drug-Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. (K) The RHCDC will comply with the requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. Catalog of Federal Domestic Assistance ICPDAI Number 14.239 (IDA Title: IIOMP Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2017-15 Page 5 of 16 (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government-wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). (N) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three-year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; (c) are not presently indicated for otherwise criminally or civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three-year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. (0) The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis-Bacon Act (40 U.S.C. 276 a-5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and/or City program guidelines. F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. Catalog of federal Domestic Assistance(Cr )A)Number. 14239 C'PDA Title. HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Develop In en!Organization FY 2017-18 Page 6 of 16 G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and/or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A-133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. I. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Catalog of Federal Domestic Assistance(CIDA)cumber: I 429 (IDA Title: I IOMI.Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2017-18 Page 7 of 16 Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set-aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME-eligible activities.) Section 2. If the RHCDC should receive project—specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Catalog of Federal Domestic Assistance IC l'DA)Number 14239 CI DA Tide'. HOME Invcsanuu Partnerships Program Rio Rondo Community Development Corporation Community Housing Development Organization FY 2017-18 Page 8 of 16 Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set-aside funds. Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME-eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for one year thereafter. Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. O. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a CHDO shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for a CHDO designation and/or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part 92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms of this Agreement. Catalog of Icderal Domestic Assistance(CFDA)Number: 14 239 (IDA late: I IOME Investment Partnerships Program Rio I londo Community Development Corporation Community Housing Development Organization FY 2017-18 Page 9 of 16 P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (30) days before the effective date of such termination. Section 2. The CITY may also suspend or terminate this Agreement, in whole or in part, if the RHCDC materially fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges, and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Cantu:of Poder Ili Domestic Assistance((FDA)Number 14 239 LPDA Title Ilt)Vib:investmcm Pannaeolps Program Rio I tondo Community Development Corporation Community Housing Development Organization FY 2017-18 Page 10of 16 Section 2. The RHCDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance. RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability. The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self-insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. Catalog of Federal Domestic.Asoisltatcc(C FDA)Number: 11.239 CI DA Tine I I(➢AI'.Imatmcnl Partnerships Program Rio Hondo Community Development Corporation Community(lousing Development Organization fY 2017-18 Paw 11 of 16 (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self-insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self-insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the CITY. catabg or Federal Domestic Assistance(LIDA)Number 14239 CIDATitic: HOME.Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization IN 2017-18 Page 12 of 16 Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: Rio Hondo Community Development Corporation 11706 Ramona Boulevard, Suite 107 El Monte, California 91732 Attn: Ken Ferreira, Executive Director CITY: City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Director of Public Works Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Cataloger Federal Don,esti Avsislance(CFDA)Number. 141 ) CI'DA tale 11011E InvesImenl Partnerships Program Rio Rondo Community Development Corporation Community Housing Development Organization FY 2017-18 Page 13 of 16 Section 2. This Agreement creates a non-exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section 4. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its officials, officers, Catalog of Peder I Domestic Assistance((ID A)Number: 14.P) CI'DA Title: 11(AIL Investment Partnerships Program Rio Ilondo Community Development Corporation Community Ilousing Development Organization I'Y 2017-18 Page 14 of 16 employees, agents, RHCDC's and contractors arising out of or in connection with the performance of this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section 8. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section 10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Cnlning of Federal Domml lc Assistance fC FDA)Number I4.2_39 ( '1)4 I file I IOM]Investment Partnerships Program Rio Hondo Community Development Corporation Community I lousing Development Organization FY 2017-18 Page 15 of 16 Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for RHCDC, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. Section 19. RHCDC has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Catalog of Federal Domestic Assistance(LEDA)Number 11239 CI DA Title. HOME Investment Partnerships Program Rio l rondo Community Development Corporation Coininunity Housing Development Organization FY 2017-I8 Page 16 of 16 Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have caused this Agreement to be executed by their duly authorized representatives. This Agreement is effective as of July 1, 2017. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: && :. BY: Bill R. Manis Ken Ferrei City Manager Executive Director Attest: y =` By: / u Marc Donohue City Clerk Approved as to Form: By - RRohFRcman Burke, Williams & Sorensen, LLP City Attorney calving(it Pcderal Donlestic nsrminoce((THAI n wnhcn 14239 CPDA 1itle HOME Inscsimcm Partnerships Program AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 26t" day of April 2016, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY", and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non-profit corporation, hereinafter referred to as "RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD"); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT"); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92 for the Fiscal Year 2016-17; WHEREAS, the City desires to commit $32,758 of its FY 2016-17 CHDO HOME funds, as well as approximately $125,058 of carryover funds prior to FY 2016-17 to RHCDC and RHCDC desires to accept such commitment of funds for the implementation of the following activities: (1) the acquisition and rehabilitation of existing substandard single- family housing units for resale to first-time homebuyers; or (2) the acquisition and rehabilitation of substandard single-family and/or multi-family rental properties. NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS: Section 1. Subject to the terms of this Agreement, the City agrees to provide to RHCDC and RHCDC agrees to accept from the City CHDO HOME funds (totaling $32,758 of its FY 2016-17 HOME funds, as well as approximately $125,058 of carryover funds prior to FY 2016-17) for the implementation of the following activities: (1) the acquisition and rehabilitation of existing substandard single-family housing units for resale to first-time homebuyers; or (2) the acquisition and rehabilitation of substandard single-family and/or multi-family rental properties. Catalog of Federal Domestic Assistance(CFDA)Number. 14.239 CFDA Title'. HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 2 of 16 Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set-aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and/or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terms shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Parts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). Catalog of Federal Domestic Assistance(CFDA)Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 3 of 16 C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Section 2. The amount of HOME funds the RHCDC may invest on a per-unit basis in affordable housing may not exceed the per-unit dollar limits established by HUD and further defined in 24 CFR-92, Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR 92.355 upon project completion. Section 2. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001-4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related environmental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. Catalog of Federal Domestic.Assistance(CFDA)Number: 14239 CFDA Title HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 4 of 16 (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally- assisted and conducted programs and activities. (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701u)(Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women-owned business enterprises. (I) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A-87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A-110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations), A-122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non-profit Institutions), and audit requirements described in OMB Circular A-128 implemented at 24 CFR Part 44 and OMB Circulars A-133 (Audits of Institutions of Higher Learning and Other Non-profit Institutions). (J) The RHCDC will provide a drug-free workplace in accordance with the Drug-Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. (K) The RHCDC will comply with the requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. Cateloa of Federal Domestic Assistance(CFDA)Number. 14.239 CFDA Title HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page5 of 16 (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government-wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). (N) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three-year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; (c) are not presently indicated for otherwise criminally or civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three-year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. (0) The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis-Bacon Act (40 U.S.C. 276 a-5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and/or City program guidelines. F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. Catalog of Federal Domestic Assistance(CFDA)Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 6 of 16 G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and/or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A-133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. I. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Catalog of Federal Domestic Assistance(CFDA)Number 14219 CFDA Title'. HOME Investment Partnerships Program Rio Ilondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 7 of 16 Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set-aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME-eligible activities.) Section 2. If the RHCDC should receive project—specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Catalog of Federal Domestic Assistance(CFDA)Number_ 14239 CFDA Title_ HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 8 of 16 Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set-aside funds. Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME-eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for one year thereafter. Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. O. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a CHDO shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for a CHDO designation and/or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part 92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms of this Agreement. Catalog of Federal Domestic Assistant(CFDA)Number_ 14239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 9 of 16 P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (30) days before the effective date of such termination. Section 2. The CITY may also suspend or terminate this Agreement, in whole or in part, if the RHCDC materially fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges, and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Catalog of Federal Domestic Assistance(CFDA)Number_ 14239 CFDA Title: HOME Investment Partnerships Program Rio 1-Tondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 10 of 16 Section 2. The RHCDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance. RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of$1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability. The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self-insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. Catalog of Federal Domestic Assistance(CFDA)Number'. 14,239 CEDA Title. HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page I I of 16 (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self-insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self-insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the CITY. Catalog of Federal Domestic Assistance(CFDA)Number 14.239 CFDA Title'. HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 12 of 16 Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: Rio Hondo Community Development Corporation 11706 Ramona Boulevard, Suite 107 El Monte, California 91732 Attn: Steve Cooper, Executive Director CITY: City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Community Development Director Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Catalog of Federal Domestic Assistance(CFDA)Number. 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 13 of 16 Section 2. This Agreement creates a non-exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section 4. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its officials, officers, Catalog of Federal Domestic Assistance(CFDA)Number: 14.239 CFDA Title: HOME Investment Parmerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 14 of 16 employees, agents, RHCDC's and contractors arising out of or in connection with the performance of this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section 8. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section 10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Catalog of Federal Domestic Assistance(CFDA)Number: 14.239 CI-DA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 15 of 16 Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for RHCDC, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. Section 19. RHCDC has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Catalog of Federal Domestic Assistance(CFDA)Number'. 14.239 CFDA Title: HOME Investment Partnerships Program • Rio Hondo Community Development Corporation Community Housing Development Organization FY 2016-17 Page 16 of 16 Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have caused this Agreement to be executed by their duly authorized representatives. This Agreement is effective as of July 1, 2016. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: 1-255 2 . .-r(-NCL ; BY: .G1J.47/4e - Bill R. Manis Steve Cooper City Manager President— eXacerT 6 ateela2 Attest: �f/j��-- By: �/ r C/ Ericka Hernandez Acting City Clerk Approved as to Form: By: .4100.1": ! -AJman Burke, filliams & Sorensen, LLP City Attorney Catalog of Federal Domestic Assistance(CFDA)Number_ 14.239 CFDA Title- HOME Investment Partnerships Program AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 28th day of April 2015, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY ", and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non - profit corporation, hereinafter referred to as "RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD "); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT "); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92 for the Fiscal Year 2015 -2016; NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS: Section 1. The RHCDC shall propose projects which meet HOME requirements and conform to the CITY's Consolidated Plan which includes the following activities: (1) the acquisition and rehabilitation of existing substandard single- family housing units for resale to first -time homebuyers; (2) new construction of single - family housing units for sale to first -time homebuyers; (3) the acquisition and rehabilitation of substandard multi- family rental properties; or (4) new construction of multi - family rental properties. Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set - aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 2 of 16 Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and /or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terms shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Parts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Snvesmant Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 3 of 16 Section 2. The amount of HOME funds the RHCDC may invest on a per -unit basis in affordable housing may not exceed the per -unit dollar limits established by HUD and further defined in 24 CFR -92, Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR 92.355 upon project completion. Section 2. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001 -4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related environmental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601 -19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101 -07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24. CFR Part 8, which prohibit discrimination based on handicap in Federally - assisted and conducted programs and activities. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 4 of 16 (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701 u) (Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women -owned business enterprises. (1) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A -87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A -110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Non - profit Organizations), A -122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non - profit Institutions), and audit requirements described in OMB Circular A -128 implemented at 24 CFR Part 44 and OMB Circulars A -133 (Audits of Institutions of Higher Learning and Other Non - profit Institutions). (J) The RHCDC will provide a drug -free workplace in accordance with the Drug -Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. (K) The RHCDC will comply with the requirements of the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government -wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 5 of 16 (N) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three -year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen - property; (c) are not presently indicated for otherwise criminally or, civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three -year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. (0) The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis -Bacon Act (40 U.S.C. 276 a -5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and /or City program guidelines. F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and /or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 6 of 16 Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A -133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. 1. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 7 of 16 Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set -aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME - eligible activities.) Section 2. If the RHCDC should receive project— specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 8 of 16 Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set -aside funds. Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME - eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for one year thereafter. Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. O. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a CHDO shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for a CHDO designation and /or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part 92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms of this Agreement. P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (30) days before the effective date of such termination. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 9 of 16 Section 2. The CITY may also suspend or terminate this Agreement, in whole or in part, if the RHCDC materially fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. - Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges, and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Section 2. The RHCDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 10 of 16 also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for. bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self- insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto Catalog of Federal Domestic Assistance (CIDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 11 of 16 owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self- insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self- insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self- insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the CITY. Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized. by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 12 of 16 received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: Rio Hondo Community Development Corporation 11706 Ramona Boulevard, Suite 107 El Monte, California 91732 Attn: Donna L. Duncan, President CITY: City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Community Development Director Such notice shall be deemed made when personally delivered or when mailed, forty -eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Section 2. This Agreement creates a non - exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 13 of 16 recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non - exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY -shall -not be limited -in -any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section 4. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its officials, officers, employees, agents, RHCDC's and contractors arising out of or in connection with the performance of this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 14 of 16 instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and /or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section B. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section 10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 15 of 16 Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for RHCDC, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self- insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. Section 19. RHCDC has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Community Housing Development Organization FY 2015 -16 Page 16 of 16 U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have caused this Agreement to be executed by their duly authorized representatives. This Agreement is effective as of July 1, 2015. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: � Jef Allred City Manager Attest: By: tel: -- G loria Molleda City Clerk Approved as to Form: l ` Rachel Richman Burke, Williams & Sorensen, LLP City Attorney BY: z " Z I, CLct, a Donna L. Duncan President Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA'ritle: HOME Investment Partnerships Program AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 23 day of April 2013, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY', and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non - profit corporation, hereinafter referred to as " RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD "); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT "); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92 for the Fiscal Year 2013 -2014; NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS: Section 1. The RHCDC shall propose projects which meet HOME requirements and conform to the CITY's Consolidated Plan which includes the following activities: (1) the acquisition and rehabilitation of existing substandard single - family housing units for resale to first -time homebuyers; (2) new construction of single - family housing units for sale to first -time homebuyers; (3) the acquisition and rehabilitation of substandard multi- family rental properties; or (4) new construction of multi - family rental properties. Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set - aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Rio Hondo Community Development Corporation Community Housing Development Organization Page 2 of 17 Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and/or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terms shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Parts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). Rio Hondo Community Development Corporation Community Housing Development Organization Page 3 of 17 C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Section 2. The amount of HOME funds the RHCDC may invest on a per -unit basis in affordable housing may not exceed the per -unit dollar limits established by HUD and further defined in 24 CFR -92, Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR 92.355 upon project completion. Section 2. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001 -4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related environmental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601 -19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. Rio Hondo Community Development Corporation Community Housing Development Organization Page 4 of 17 (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101 -07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally- assisted and conducted programs and activities. (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701u)(Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women -owned business enterprises. (I) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A -87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A -110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Non - profit Organizations), A -122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non - profit Institutions), and audit requirements described in OMB Circular A -128 implemented at 24 CFR Part 44 and OMB Circulars A -133 (Audits of Institutions of Higher Learning and Other Non -profit Institutions). (J) The RHCDC will provide a drug -free workplace in accordance with the Drug -Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. Rio Hondo Community Development Corporation Community Housing Development Organization Page 5 of 17 (K) The RHCDC will comply with the requirements of the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government -wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). (N) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three -year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; (c) are not presently indicated for otherwise criminally or civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three -year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. (0) The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis -Bacon Act (40 U.S.C. 276 a -5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and /or City program guidelines. Rio Hondo Community Development Corporation Community Housing Development Organization Page 6 of 17 F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and /or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A -133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. Rio Hondo Community Development Corporation Community Housing Development Organization Page 7 of 17 Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. I. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set -aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. Rio Hondo Community Development Corporation Community Housing Development Organization Page 8 of 17 K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME- eligible activities.) Section 2. If the RHCDC should receive project — specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set -aside funds. Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME- eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for.one year thereafter. Rio Hondo Community Development Corporation Community Housing Development Organization Page 9 of 17 Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. O. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a RHCDC shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for RHCDC designation and/or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part 92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms of this Agreement. P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (3 0) days before the effective date of such termination. Section 2. The CITY may also suspend or terminate this Agreement, in whole or in part, if the RHCDC materially fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. Rio Hondo Community Development Corporation Community Housing Development Organization Page 10 of 17 Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges, and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Section 2. The RHCDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall also require all of its subcontractors to procure and maintain the salve insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation Rio Hondo Community Development Corporation Community Housing Development Organization Page ] ] of 17 and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self - insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self - insurance maintained by the CITY, its directors, officials, officers, Rio Hondo Community Development Corporation Community Housing Development Organization Page 12 of 17 employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self - insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than ANIII, licensed to do business in California, and satisfactory to the CITY. Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. Rio Hondo Community Development Corporation Community Housing Development Organization Page 13 of 17 S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: Rio Hondo Community Development Corporation 11706 Ramona Boulevard, Suite 107 El Monte, California 91732 Attn: Donna L. Duncan, President CITY: City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Community Development Director Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Section 2. This Agreement creates a non - exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise Rio Hondo Community Development Corporation Community Housing Development Organization Page 14 of 17 recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non - exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section 4. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other parry, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its officials, officers, employees, agents, RHCDC's and contractors arising out of or in connection with the performance of this Agreement, including without limitation the payment of all Rio Hondo Community Development Corporation Community Housing Development Organization Page 15 of 17 consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section 8. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section 10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assigmnent, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Rio Hondo Community Development Corporation Community Housing Development Organization Page 16 of 17 Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for RHCDC, any fee, cominission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self - insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. Rio Hondo Community Development Corporation Community Housing Development Organization Page 17 of 17 Section 19. RHCDC has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on this 23 Day of April 2013. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: 93&/ BY: klt C ' A rP rr ff A red Donna L. Duncan City Manager President Attest: Gloria ON • -•. City Clerk Approved to Form: By: Rachel Richman Burke, Williams & Sorensen, LLP City Attorney 2c)(, CITY OF ROSEMEAD FISCAL YEAR 2015 -2016 OPERATING EXPENSES AGREEMENT FOR COMMUNITY HOUSING DEVELOPMENT ORGANIZATION BY AND BETWEEN THE CITY OF ROSEMEAD, A California Municipal Corporation -AND - THE RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California Public Benefit Corporation THIS OPERATING EXPENSES AGREEMENT (hereinafter, the "Agreement ") is executed and entered into on this 28 th day of April, 2015 by and between the City of Rosemead, A California Municipal Corporation ( "CITY ") and the Rio Hondo Community Development Corporation, A California Public Benefit Corporation ( "RHCDC "). CITY and RHCDC may be referred to collectively as the "Parties" or individually as a "Party." WHEREAS, CITY has determined that RHCDC is a Community Housing Development Organization ( "CHDO ") within the meaning of Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, Under HOME regulations, the CITY is allowed to use up to five percent of its annual HOME allocation to enhance a Community Housing Development Organization's capacity by offsetting operating expenses it incurs (24 CFR § 92.208). The CITY can commit and expend $2,000 its annual HOME allocation from Fiscal -Year 2015 -2016, for the payment of operating expenses of the RHCDC as a certified Community Housing Development Organization. The funds will assist the RHCDC in its continuing efforts related to ownership, development and sponsorship of affordable housing projects located within the CITY. WHEREAS, CITY has elected to allocate Fiscal -Year 2015 -16 HOME Investment Partnerships Program Funds ( "HOME Funds ") to RHCDC to defray certain costs incident to the operation of a CHDO as outlined in Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, CITY has determined that the HOME Funds to be provided to RHCDC satisfy the requirements and limitations outlined in Section 92.300(e) and (f) of Title 24 of the United States Code of Federal Regulation. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: SECTION 1. SCOPE OF OPERATING EXPENSE ACTIVITY (a) The above recitals are true and correct and hereby incorporated by this reference. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2015 -16 Page 2 of 6 (b) Level of Assistance CITY shall provide RHCDC with the sum total of Two Thousand Dollars & 00 /100's ($2,000.00) (hereinafter, the "Funds ") to be utilized for RHCDC's documented Eligible Operating Expenses (budget) related to the ownership, development and sponsorship of affordable housing projects located within the City of Rosemead. The Funds shall be derived from CITY's Fiscal -Year 2015 -16 HOME Funds. (c) Term: This Agreement shall have a term of twelve (12) months from its effective date.. For the purposes of this Agreement, the "effective date" shall be July 1, 2015. (d) Eligible Operating Expenses For the purposes of this Agreement the term "Eligible Operating Expenses" as defined by Title 24 CFR Section 92.208 means reasonable and necessary costs for the operation of the RHCDC. Such costs may include: Salaries / wages and other employee compensation for the following: i) Managing Director, (employee, contract employee, independent contractor or consultant); ii) Administrative support (employee, contract employee, independent contractor, consultant and /or vendor); and iii) Other employees, contract employees, independent contractors, consultant and /or vendor essential to carrying out HOME Investment Partnership Program eligible projects. 2. Board and employee education and training 3. Travel expenses associated with the development of affordable housing 4. Rent and utilities 5. Communication costs 6. Taxes, licenses and related fees 7. Insurance 8. Equipment, materials and supplies 9. Legal, accounting and audit costs 10. Any other reasonable, customary, and documented costs associated with owning, operating, developing and /or sponsoring HOME Investment Partnership Program eligible projects Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2015 -16 Page 3 of 6 SECTION 2. PLACE OF WORK The Parties understand and agree that RHCDC shall conduct its operations primarily at RHCDC's offices located 11706 Ramona Boulevard, Suite 107, El Monte, California 91732, but may, upon request to the CITY, meet with CITY representatives at the offices of CITY, or such other locations as may be designated by CITY. SECTION 3. TIME DEVOTED TO WORK RHCDC agrees to devote such time as is reasonably necessary to develop affordable housing projects in a timely manner and as requested by CITY. SECTION 4. METHOD OF PAYMENT CITY shall provide reimbursement funding to RHCDC up to a maximum payment of Two Thousand Dollars & 00 /100's ($2,000.00) for expenses incurred while working with the CITY on an affordable housing project. The Funds shall be utilized exclusively for Eligible Operating Expenses incurred during the FY 2015 -16 program year. Funding requests must be accompanied by a detailed expense report. SECTION 5. TERMINATION Either Party may terminate this Agreement with or without cause upon thirty (30) days prior written notice to the other Party. At such time, CITY shall be entitled to reimbursement for all unexpended Funds. To this end, RHCDC shall maintain records of all of its Eligible Operating Expenses and the draw -down of the Funds to pay for such expenses. CITY shall have a right to review all such records upon forty -eight (48) hours prior written notice to RHCDC. SECTION 6. STATUS OF RHCDC RHCDC has been certified as an eligible Community Housing Development Organization and complies with all regulations of the federal HOME Investment Partnership Program relating to CHDO status. The Parties agree that RHCDC, its officers, employees, agents and /or associates are not employees or agents of the CITY for any purposes. SECTION 7. INDEMNIFICATION RHCDC shall indemnify, defend and hold free and harmless CITY, its officers, elected officials, employees, agents and volunteers from and against any and all liability, claims, suits, actions, administrative actions or administrative enforcement proceedings, fines, penalties, damages or causes of action arising out of (a) any bodily injury, death, economic loss, or damage to property caused by RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants in the performance of its duties and /or obligations under this Agreement or in the performance of RHCDC's Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOW Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2015 -16 Page 4 of 6 housing development activities; (b) the negligent or intentional failure of RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants to adhere to applicable laws in the performance of RHCDC's duties and /or obligations under this Agreement; (c) any claim employment related claims or suits, including claims or suits for wrongful termination, harassment and /or unpaid compensation brought by any agent, employee, volunteer, contractor, subcontractor or subconsultant of RHCDC; and (d) all other claims connected with RHCDC under this Agreement, including but not limited to RHCDC's breach of this Agreement. It is understood that the duty of RHCDC to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. In the event RHCDC fails to provide such a defense to CITY, RHCDC shall be liable to CITY for CITY's reasonable attorneys' fees and costs incurred to defend itself. Acceptance of insurance certificates and endorsements shall not relieve RHCDC from liability under this indemnification and hold harmless provision. SECTION 8. INSURANCE RHCDC shall procure and, for the duration of this Agreement, maintain the following policies of insurance: (a) General Liability Insurance in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence, combined single limit; (b) Workers' Compensation Insurance as required pursuant to Section 3700 et seq. of the California Labor Code in the event RHCDC hires employees. Prior to commencing any work under this Agreement, RHCDC shall deliver to the CITY such Certificates of Insurance confirming the coverage required by this Agreement and providing to the CITY, thirty (30) days prior, with written notice of limitation of scope or coverage, cancellation or termination. The certificates shall name the CITY, its officers, employees and agents as additional insured. SECTION 9. NON- DELIGATION OF DUTIEES CITY agrees to pay for such Eligible Operating Expenses incurred by RHCDC for work, services, and costs incident to the development of HOME Fund funded affordable housing projects. Without the prior written authorization of the CITY, no person(s) or entities, other than RHCDC's officers, agents or employees shall be engaged in such development activities. The foregoing shall not apply to clerical duties and other like activities. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2015 -16 Page 5 of 6 SECTION 10. NOTICES Any notice(s) from one Party to another under this Agreement that may be necessary or convenient under shall be transmitted to a party at the applicable addresses indicated in this Section 22. Each notice shall bear a date and shall be in writing and shall be deemed received by the party on the date on which: (i) the notice is personally served on the party; or (ii) the notice is sent by FAX, and confirmed; (iii) by deposit within forty -eight (48) hours thereafter into the United States Mail for delivery by first class postage prepaid of a hard copy of such notice; or (iv) five (5) calendar days after the notice is deposited into United States Mail as certified mail, return - receipt requested and postage prepaid. For the purpose of the Agreement, the following are the mailing addresses to which notices and other correspondence for each of the Parties: TO CITY: City of Rosemead 8838 E. Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Community Development Director TO RHCDC: Rio Hondo Community Development Corporation 11706 Ramona Boulevard, Suite 107 El Monte, California 91732 Attn: Donna L. Duncan, President SECTION 11. INTEGRATION PROVISION This Agreement constitutes the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the Agreement. No statements, representations or other agreements, whether oral or written, made by any Party, which are not embodied herein shall be valid or binding. No amendment to, or modification of, this Agreement shall be valid or binding unless in writing and duly signed and executed by each of the Parties. SECTION 12. WAIVERS / MODIFICATONS No waiver of any duty or obligation under this Agreement shall be valid, unless expressly waived in writing by the Party to whom the duty or obligation is owed. No alteration, amendment or modification of this Agreement shall be valid or binding, unless mutually approved by the Parties in writing. SECTION 13. GOVERNING LAW This Agreement shall be governed by the laws of the State of California. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2015 -16 Page 6 of 6 SECTION 14. INTERPRETATION In preparing and executing this Agreement, each of the Parties received the opportunity to consult with their respective legal counsel. Accordingly, this Agreement, shall not be in favor of one Party over the other in the event of ambiguity, but instead shall be interpreted as if both Parties prepared this Agreement together. SECTION 15. AUTHORITY TO EXECUTE AGREEMENT: RHCDC warrants, represents and agrees that it has duly approved the execution of this Agreement and that upon the execution of this Agreement, RHCDC shall provide CITY with a corporate resolution authorizing the execution of this Agreement on its behalf under the terms and conditions stated herein. RHCDC's signatory to this Agreement personally warrants, represents and agrees that he or she is duly authorized to execute this Agreement on behalf of RHCDC and thereby bind RHCDC to the terms and conditions contained herein. IN WITNESS WHEREOF, the CITY and RHCDC have caused this Agreement to be executed by their duly authorized representatives. This Agreement is effective as of July 1, 2015. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION Attest: By. �a't �" \ w " Gloria Molleda CITY CLERK Approved as to Form: achel Richman Burke, Williams & Sorensen, LLP City Attorney BY: L--el e D nna L. Duncan PRESIDENT Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program ---- 1 ® PATE(MMmorcrvn "`°RO CERTIFICATE OF LIABILITY INSURANCE ? 8/26/2014 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. .PORTANT: If the Certificate holder Is an ADDITIONAL INSURED,the pollcy(les) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). IONTACT Jane Garretson PRODUCER NAME'. Hayward Tilton & Rolapp Insurance Associates, Pwwoctrp Enl. (714)905-1923 FAX No);01E9°5-1910 CA Dept. of Ins. Lic. #0619365 ADD, janeg @htrinsure.com 888 S. Disneyland Dr. , Ste 900 -184o ECEIVED INSURER(S)AFFOROINC COVERAGE talc♦ Anaheim CA 92802 INSUERAth American Elite Ins Co 29700 INSURED el I T O} RUSEMtAU INSURERS Nonprofits Insurance Alliance Rio Hondo Community Development C5:5I. 0 4 2014 INSmERC Hartford Fire Insurance Co 19682 11706 Ramona Blvd. Ste 107 INSURERD' CITY CLERKS OFFICE INSURERS: El Monte CA 91732 INSURER F: COVERAGES CERTIFICATE�yi4��Nt,MDCR.1"/le ^T , HNOA,1IL-1B, WC REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. IR A Y POLICY L TYPE OF I. w' POLICY NUMBER IMMIWIWYY) IMMDoIYYWI LIMITS GENERALIABILITY EACH OCCURRENCE 1,000,000 X COMMERCIAL GENERAL LWHIU I r PREMISES( aEIUED 500,000 DAMA&E1O LN ED occurrence} A CLANG MADE © OCCUR X 201414161NP0 8/26/2014 0/26/2015 MED EXP(My one person, 20,000 PERSONAL&ADV IN.LRY 1,000,000 GENFPAL AGGREGATE 2,000,000 GEINt AGGREGP=IJMIT APPLIES PER PRODUCTS-COMPJOPAGG 2,000,000 RO_IOY[ 1 n Lac COMENY I: AUTOMOBILELIABILITY (Eeerc*n)SINS F.MU $ 1,000,000 ANY AUTO BODIL Y N-ORr per-persona $ - ALL OWED SCHEDULED 201414181N20 0/26/2014 8/26/2015 BODILY INJURY Pei acddentl $ _ AOTCS AUTOS PROPERTY DAMAGE H.RED AUTOS X AUTOSW D (Per acodenn $ X S X UMBRELLA LIMB X OCCUR EACH OCCURRENCE $ 1,000,000 B EXCESS LIA6 CLAIMSMAf1E AGGREGATE $ 1,000,000 [RD I XI PEI ENTION$ 10,000 20141418117AmNP0 B/26/2014 8/26/2015 $ WORKERS COMPENSATION X iATLc T C AND RROPPIEOR.PARTINER Try EL EACH ACCIDENT $ 1,000,000 O MFME NIExECATIVF Chia £Fm FM6H2 ExGLVCECP NIA 72WFDSY7876 6/23/2014 6/23/2015 LL [CEASE-EACMttOYEE $ 1,000,000 DCscRIPTION OF OPERATIONS below EL DISEASE-POLICY LIMIT $ 1,000,000 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES (Attach ACCORD r01,Additional Remvka Schedule,It more apace Is required) RE: Covered Locations- SEE ATTACHED Certificate Holder is Included as Additional Insured as required per written contract or agreement per Form CG2026 07/04 *CANCELLATION: 10-days Notice for Non-Payment of Premium and/or Non-Reporting of Payroll or 30 days for all other reasons. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Rosemead Attn: Michelle Ramirez AUTHORIZED REPRESENTATIVE 8838 East Valley Rosemead, CA 91770 Jane Garretson/JEG Gclosee—. r - ACORD 25(2010105) ©1988-2010 ACORD CORPORATION. All rights reserved. INS0251;u s141 The ACORD name and logo are registered marks of ACORD COMMENTS/REMARKS Covered Locations: 9331 Glendon Way, Rosemead, CA. 91770 628 Landis View Lanc, Rosemead, CA. 919/0 OF REMARK COPYRIGHT 2000, AMS SERVICES INC. ADDITIONAL COVERAGES Ref# Description Coverage Code Form No. Edition Date Liquor Liability LIQUR Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium ,00Q000 1,000,000 Ref# Descdption Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref it Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit I Limit 2 Limit Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref It Description Coverage Code Form No. Edition Date Limit I Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref It Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Fonn No. Edition Date Limit I Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Cede Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium OFADTLCV Copyright 2001,AMS Services,Inc. POLICY NUMBER: COMMERCIAL GENERAL LIABILITY CG 20 26 07 04 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s)Or Organization(s) Any person or organization that you are required to add as an additional insured on this policy, under a written contractor agreement currently in effect, or becoming effective during the term of this policy. The additional insured status will not be afforded with respect to liability arising out of or related to your activities as a real estate manager for that person or organization. Information required to complete this Schedule, if not shown above,will be shown in the Declarations. Section II — Who Is An Insured is amended to in- clude as an additional insured the person(s) or organi- zation(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury' caused, in whole or in part, by your acts or omissions or the acts or omis- sions of those acting on your behalf: A. In the performance of your ongoing operations;or B. In connection with your premises owned by or rented to you. CG 20 26 07 04 ©ISO Properties, Inc.,2004 Page 1 of 1 ❑ A`°R°M CERTIFICATE OF LIABILITY INSURANCE Ida B/28/2014' THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED,the pollcy(les) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER CONTACT Jane Garretson UNAME. Hayward Tilton & Holapp Insurance Associates, eI(ME 1 (714)905-1923 IP°c vet. 1114)905-1910 CA Dept. of Ins. Lic. $0614365 come=janeg€htrinsure.corn 888 S. Disneyland Dr. , Ste 400 ��ss INSURP C WIC*SIAFFOROINSOVERAGE IC* Anaheim CA 92802-184RECEIVFD INSuRERA North American Elite Ins Co 29700 INSURREO CITY or ROSEMEAD INSURERS Nonprofits Insurance Alliance Rio Hondo Community Developament Cp�p,. 08 o INSURERC Hartford Fire Insurance Co 19682 11706 Ramona Blvd. Ste 107 :. JEF O r INSURERO. INSURER E'. El Monte CA 91732 CITY CIFRHrg grrice INSURERF:. COVERAGES CERTIFICPBV:NUMBER:14 15 , HNOA,UDIH, WC REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTEDtttOW-HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REOUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO VIHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN.THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POILLLICIES.LIMBS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ILTR OF INSURANCE AINSRI5'AWI) POLICY NUMBER XwMJILOOTTYYYY) IMMIWIYYWI LIMITS GENERAL LIABILITY EACH°aCHJPRENCE 1,000,000 X CNMCRCLV.arNERn Llv'BLIT Y PPEInn.ES'ER O��r'rnsel 500,000 A 1C AMSNN1. IXI OGI.R X 2 0 14 14 16 1NP0 8/26/2014 8/26/2015 (Any on pm.or 20,000 PERSONA-a ADJ INWPY 1,000,000 6ENERN AeGRECATE 2,000,000 G _ u.T fl FR/RR PRepIcTS-CMFIOF 4GG 2,000,000 x.I I poi i n'F'i n LC0C AUTOMOBILELIABILITY f1.M AR-LA y GLE OA (EaOCh)nn $ 1,o°0,00o A _ AN,AUTO BODILY NJU Y V er/Hrev.l 5 MJEO SCHEDULED 2 014 14 1 61NPO 8/26/2014 B/26/2015 BODILY MJURY;PEr QWenI) $ AVCa ALTOS NON OWIED OPERTY DUAASF 6 I RE➢aUTD5 X AUTOS IFBra_aderl) DC $ X UMBRELLA LIAR X ,'Cup LACY(oPa4RENCE a 1,000,.000 B EXCESS LIAB CINMSAINJ= 4OGPE ATE $ 1,000,000 ;Ffa X RETEn910Nf la.woo 201414181010NP° 8/26/2014 0/26/2015 f C WORMERS'COMPENSATION x NCE-dJ OTI-.� AND EMPLOYERS'.LIABILITY yip 1()F?'usnlaI I IS ANY PPOPR ETOrwMT RF OJR/E Li EL.EACH ACCIDENT $ 1,000,000 OFPCEPAHEMBER EXO A IR RA NIA T2wECIYl6l6 6/23/2014 6/21/2015 (Mandatory in and [LDISEASE S EMPVJ/FE $ 1,000,000 Yµs.desciu under FCRIPTION OF OPERATIC/SYden ELJ5EPSE-POLICY IMIT 1 1.,000,000 1 DESORPTION OF OPELocatI LOCATIONS/VEHICLES(mote ACORD 101 Additional Remarks Schedule,Ifmde space lueyWred) HE: Covered. Locations- SEE Certificate Holder is includdeed d as Additional Insured as required per written contract or agreement per. Form CG2026 07/04 `CANCELLATION: 10-days Notice for Non-Payment of Premium and/or Non-Reporting of Payroll or 30 days for all other reasons. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Rosemead Attn: Michelle Ramirez 8838 East Valley AUTHORIZED REPRESENTATIVE Rosemead, CA 91770 Jane Garret son/JEG CY"°°O ACORD 25(2010/05) ©1988-2010 ACORD CORPORATION. All rights reserved. 1N5025 2m0pss,n The ACORD name and logo are registered marks of ACORD COMMENTS/REMARKS Covered Locations: 9331 Elondon Way, Rosemead, C.9.. 917FC 622 Landis View lane, Rosemead, CA. 91770 OFREMARN COPYRIGHT 2000, ANS SERVICES INC. ADDITIONAL COVERAGES Ref# Description Coverage Code Form No, Edition Date Liquor Liability LOUR Limit Limit 2 Limit3 Deductible Amount Deductible Type Premium 1,000,000 1,000.000 Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Typo Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref ft Description Coverage Code Form No. Edition Date Limit 1 Limit2 Limit3 Deductible Amount Deductible Type Premium Ref ft Description Coverage Code Form No. Edition Date Limit 1 Limit2 Limit 3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref It Description Coverage Code Form No. Edition Date Limit I Limit 2 Limit3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit3 Deductible Amount Deductible Type Premium Ref# Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit3 Deductible Amount Deductible Type Premium Ref if Description Coverage Code Form No. Edition Date Limit I Limit 2 Limit 3 Deductible Amount Deductible Type Premium OFADTLCV CopyrlgM 2001,AMS Services,Inc. POLICY NUMBER'. COMMERCIAL GENERAL LIABILITY CG 20 26 07 04 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s)Or Organization(s) Any person or organization that you are required to add as an additional insured on this policy, under a written contractor agreement currently in effect, or becoming effective during the term of this policy. The additional insured status will not be afforded with respect to liability arising out of or related to your activities as a real estate manager for that person or organization. Information required to complete this Schedule, if not shown above,will be shown in the Declarations. Section II — Who Is An Insured is amended to in- clude as an additional insured the person(s) or organi- zation(s) shown in the Schedule, but only with respect to liability for "bodily injury', "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the ads or omis- sions of those acting on your behalf: A. In the performance of your ongoing operations: or B. In connection with your premises owned by or rented to you. CG 20 26 07 04 ©ISO Properties, Inc.,2004 Page 1 of 1 ❑ • M 11 OR: ilk City ofsemead WILLIAM AI ARcoN 'In OR PRO TETT: Mnxc■ - CLARK 8838 II VALLEY R011lNVARJ)I'D BOX 399 COUNCIL MEMBERS: kOSEM11UAq CALIFORNIA91]]0 SANDRA ARMEN L1 � � 1FLEPI LOVE(626)569-2100 JEAN IIAL. FAX(626)307-9218 POLLY LOB' May 20, 2014 Rio Hondo Community Development Corp. Anna Palmer 11706 Ramona Blvd. Ste 107 El Monte, CA 91732 Re: Certificate of Insurance To Whom It May Concern: It is required that you provide the City of Rosemead with the following updated insurance certificate. Our files indicate that the following certificate(s) will expire June 23, 2014: 0 Workers Compensation Insurance Policy Number 72 W ECIY7876 Please forward a corrected certificate to the attention of the City Clerk. If you have received this letter in error and have submitted a corrected certificate prior to the date above, or are no longer contracting with the city, please check the bottom portion of this notice and fax it to (626) 307-9218. For questions, please contact the City Clerk's Office at City of Rosemead 8838 E. Valley Blvd. Rosemead, CA 91770 or by phone at (626) 569-2177. Thank you for your prompt attention to this matter. Sincerely, Stephanie Harris ri Corrected Certificate has been sent. Company is no longer contracting with the City. qC� DATE(MMIDDIYYYY) �. CERTIFICATE OF LIABILITY INSURANCE 1 8/25/2013 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsements).. PRODUCER. CONTACT Jane Garretson NAME: Hayward Tilton &Rolapp Insurance Associates, PHONE (714 ' AIL 905 -1923 FA AIC No X plat sos -lvlq : CA Dept. of Ins. Lie. #0614365 .janeg @htrinsure.com 888 S. Disneyland Dr., Ste 400 INSURERS AFFORDING COVERAGE NAIC# Anaheim CA 92802 -1846 INSURERA Von ro£its' Ins Alliance of CA 11845 INSURED INSURER B Fire Insurance CO 19682 Rio Hondo Community Development COrp. INSURER O: Anna Palmer INSURERD: 11706 Ramona Blvd. Ste 107 INSURERE: El Monte CA 91732 INSURERF: rvonolr Are wlnenco-1 i/1 A all T.TNF.R RFVISION NIIMRER THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO VIHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR Um TYPE OF INSURANCE ADDL INNSR POLICY NUMBER MMIDDIYYYY MMIDDIYYYY LIMITS GENERAL LIABILITY Jane Garretson /JEG EACH OCCURRENCE $ 1,000,000 DAM AGE _191 EWED PREMISES [Ea occurrence $ 500,000 X COMMERCIALGENERALLIABILITY MED EXP(MV one person) $ 20,000 A CLAIM &MADE aOCCUR X 0131418INP0 /26/2013 /26/2014 PERSONAL &ADV INJURY $ 1,000,000 GENERAL AGGREGATE $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER'. PRODUCTS- COMP/OP AGO $ 2,000,000 $ X POLICY JEC LOG - AUTOMOBILE LIABILITY _ Ea accideDISINGLE LIMIT 1, 000,000 BODILY INJURY (Per person) $ A ANY AUTO BODILY INJURY (Par accident) $ ALLOWED SCHEDULED. 01314181NPO - /26/2013 /26/2014 AUTOS AUTOS PROPERTY D/WIAGE Per accitlen[ $ HIREDAUTOS X AUTOSED $ X X UMBRELLA LAB OCCUR EACH OCCURRENCE $ 1,000,000 AGGREGATE $ 1,000,000 A EXCESS LIAR CWMSJdADE DED I X I RETENTION$ 10,000 $ 01314181U11B /26/2013 /26/2014 B WORKERS COMPENSATION X I RYLAMIUS O AND EMPLOYERS' LIABILITY ANY PROPRIETOR)PARTNER�CUTIVE YIN E.L. EACH ACCIDENT $ 1 EL DISEASE - EA EMPLOYEE $ 1, 000,00 OFFICERMEMBER EXCLUDED? (Mandatory In NH) NIA 2WECIY7876 6/23/2013 6/23/2019 E.L. DISEASE - POLICY LIMIT $ 1, 000 , 00 l Yes, describe under DESCRIPTION OF OPERATIONS below, DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (Adach ACORD 101, Addhlonal Remarks Schedule, If more space Is required) Property: 9331 Glendon Way, Rosemead, CA. 91770 Property: 8628 Landis View Lane, Rosemead, CA. 91770 Certificate Holder is Included as Additional Insured as required per written contract or agreement per Form CG2026 07/04 *CANCELLATION: 10 -days Notice for Non - Payment of Premi and /or Non - Reporting of Payroll or 30 days for all other reasons. - ACORD 25 (2010105) O 1998 -ZUIU AL:UKU GUKPUKAIIUIN. All ngnts reserVea. I NS025 (201005(01 The ACORD name and logo are registered marks of ACORD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Rosemead Attn: Michelle Ramirez AUTHORIZED REPRESENTATIVE 8838 East Valley Rosemead, CA 91770 Jane Garretson /JEG ACORD 25 (2010105) O 1998 -ZUIU AL:UKU GUKPUKAIIUIN. All ngnts reserVea. I NS025 (201005(01 The ACORD name and logo are registered marks of ACORD 206 CITY OF ROSEMEAD FISCAL YEAR 2013 -2014 OPERATING EXPENSES AGREEMENT FOR COMMUNITY HOUSING DEVELOPMENT ORGANIZATION BY AND BETWEEN THE CITY OF ROSEMEAD, A California Municipal Corporation -AND - THE RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California Public Benefit Corporation THIS OPERATING EXPENSES AGREEMENT (hereinafter, the "Agreement ") is executed and entered into on this 23rd day of April 2013, by and between the City of Rosemead, A California Municipal Corporation ( "CITY ") and the Rio Hondo Community Development Corporation, A California Public Benefit Corporation ( "RHCDC "). CITY and RHCDC may be referred to collectively as the "Parties" or individually as a "Party." WHEREAS, CITY has determined that RHCDC is a Community Housing Development Organization ( "CHDO ") within the meaning of Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, Under HOME regulations, the CITY is allowed to use up to five percent of its annual HOME allocation to enhance a Community Housing Development Organization's capacity by offsetting operating expenses it incurs (24 CFR § 92.208). The CITY can commit and expend $4,190, which is 2% of its annual HOME allocation from Fiscal -Year 2013 -2014, for the payment of operating expenses of the RHCDC as a certified Community Housing Development Organization. The funds will assist the RHCDC in its continuing efforts related to ownership, development and sponsorship of affordable housing projects located within the CITY. WHEREAS, CITY has elected to allocate Fiscal -Year 2013 -14 HOME Investment Partnerships Program Funds ( "HOME Funds ") to RHCDC to defray certain costs incident to the operation of a CHDO as outlined in Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, CITY has determined that the HOME Funds to be provided to RHCDC satisfy the requirements and limitations outlined in Section 92.300(e) and (f) of Title 24 of the United States Code of Federal Regulation. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2013 -14 Page 2 of 7 SECTION 1. SCOPE OF OPERATING EXPENSE ACTIVITY (a) The above recitals are true and correct and hereby incorporated by this reference. (b) Level of Assistance CITY shall provide RHCDC with the sum total of Four Thousand One Hundred and Ninety Dollars & 001100's ($4,190.00) (hereinafter, the "Funds') to be utilized for RHCDC's documented Eligible Operating Expenses (budget) related to the ownership, development and sponsorship of affordable housing projects located within the City of Rosemead. The Funds shall be derived from CITY's Fiscal -Year 2013 -14 HOME Funds. (c) Term: This Agreement shall have a term of twelve (12) months from its effective date. For the purposes of this Agreement, the "effective date" shall be July 1, 2013. (d) Eligible Operating Expenses For the purposes of this Agreement the term "Eligible Operating Expenses" as defined by Title 24 CFR Section 92.208 means reasonable and necessary costs for the operation of the RHCDC. Such costs may include: 1. Salaries / wages and other employee compensation for the following: i) Managing Director, (employee, contract employee, independent contractor or consultant); ii) Administrative support (employee, contract employee, independent contractor, consultant and /or vendor); and iii) Other employees, contract employees, independent contractors, consultant and /or vendor essential to carrying out HOME Investment Partnership Program eligible projects. 2. Board and employee education and training 3. Travel expenses associated with the development of affordable housing 4. Rent and utilities 5. Communication costs 6. Taxes, licenses and related fees 7. Insurance Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement— FY 2013 -14 Page 3 of 7 8. Equipment, materials and supplies 9. Legal, accounting and audit costs 10.Any other reasonable, customary, and documented costs associated with owning, operating, developing and /or sponsoring HOME Investment Partnership Program eligible projects SECTION 2. PLACE OF WORK The Parties understand and agree that RHCDC shall conduct its operations primarily at RHCDC's offices located 11706 Ramona Boulevard, Suite 107, El Monte, California 91732, but may, upon request to the CITY, meet with CITY representatives at the offices of CITY, or such other locations as may be designated by CITY. SECTION 3. TIME DEVOTED TO WORK RHCDC agrees to devote such time as is reasonably necessary to develop affordable housing projects in a timely manner and as requested by CITY. SECTION 4. METHOD OF PAYMENT CITY shall provide reimbursement funding to RHCDC up to a maximum payment of Four Thousand One Hundred and Ninety Dollars & 001100's ($4,190.00) for expenses incurred while working with the CITY on an affordable housing project. The Funds shall be utilized exclusively for Eligible Operating Expenses incurred during the FY 2013 -14 program year. Funding requests must be accompanied by a detailed expense report. . SECTION 5. TERMINATION Either Party may terminate this Agreement with or without cause upon thirty (30) days prior written notice to the other Party. At such time, CITY shall be entitled to reimbursement for all unexpended Funds. To this end, RHCDC shall maintain records of all of its Eligible Operating Expenses and the draw -down of the Funds to pay for such expenses. CITY shall have a right to review all such records upon forty -eight (48) hours prior written notice to RHCDC. SECTION 6. STATUS OF RHCDC RHCDC has been certified as an eligible Community Housing Development Organization and complies with all regulations of the federal HOME Investment Partnership Program relating to CHDO status. The Parties agree that RHCDC, its officers, employees, agents and /or associates are not employees or agents of the CITY for any purposes. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2013 -14 Page 4 of 7 SECTION 7. INDEMNIFICATION RHCDC shall indemnify, defend and hold free and harmless CITY, its officers, elected officials, employees, agents and volunteers from and against any and all liability, claims, suits, actions, administrative actions or administrative enforcement proceedings, fines, penalties, damages or causes of action arising out of (a) any bodily injury, death, economic loss, or damage to property caused by RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants in the performance of its duties and /or obligations under this Agreement or in the performance of RHCDC's housing development activities; (b) the negligent or intentional failure of RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants to adhere to applicable laws in the performance of RHCDC's duties and /or obligations under this Agreement; (c) any claim employment related claims or suits, including claims or suits for wrongful termination, harassment and /or unpaid compensation brought by any agent, employee, volunteer, contractor, subcontractor or subconsultant of RHCDC; and (d) all other claims connected with RHCDC under this Agreement, including but not limited to RHCDC's breach of this Agreement. It is understood that the duty of RHCDC to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. In the event RHCDC fails to provide such a defense to CITY, RHCDC shall be liable to CITY for CITY's reasonable attorneys' fees and costs incurred to defend itself. Acceptance of insurance certificates and endorsements shall not relieve RHCDC from liability under this indemnification and hold harmless provision. SECTION 8. INSURANCE RHCDC shall procure and, for the duration of this Agreement, maintain the following policies of insurance: (a) General Liability Insurance in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence, combined single limit; (b) Workers' Compensation Insurance as required pursuant to Section 3700 et seq. of the California Labor Code in the event RHCDC hires employees. Prior to commencing any work under this Agreement, RHCDC shall deliver to the CITY such Certificates of Insurance confirming the coverage required by this Agreement and providing to the CITY, thirty (30) days prior, with written notice of limitation of scope or coverage, cancellation or termination. The certificates shall name the CITY, its officers, employees and agents as additional insured. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2013 -14 Page 5 of 7 SECTION 9. NON -DELIGATION OF DUTIEES CITY agrees to pay for such Eligible Operating Expenses incurred by RHCDC for work, services, and costs incident to the development of HOME Fund funded affordable housing projects. Without the prior written authorization of the CITY, no person(s) or entities, other than RHCDC's officers, agents or employees shall be engaged in such development activities. The foregoing shall not apply to clerical duties and other like activities. SECTION 10. NOTICES Any notice(s) from one Party to another under this Agreement that may be necessary or convenient under shall be transmitted to a party at the applicable addresses indicated in this Section 22. Each notice shall bear a date and shall be in writing and shall be deemed received by the party on the date on which: (i) the notice is personally served on the party; or (ii) the notice is sent by FAX, and confirmed; (iii) by deposit within forty -eight (48) hours thereafter into the United States Mail for delivery by first class postage prepaid of a hard copy of such notice; or (iv) five (5) calendar days after the notice is deposited into United States Mail as certified mail, return - receipt requested and postage prepaid. For the purpose of the Agreement, the following are the mailing addresses to which notices and other correspondence for each of the Parties: TO CITY: City of Rosemead c/o Community Development Department 8838 E. Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Community Development Director TO RHCDC: Rio Hondo Community Development Corporation 11706 Ramona Boulevard, Suite 107 El Monte, California 91732 Attn: Donna L. Duncan, President SECTION 11. INTEGRATION PROVISION This Agreement constitutes the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the Agreement. No statements, representations or other agreements, whether oral or written, made by any Party, which are not embodied herein shall be valid or binding. No amendment to, or modification of, this Agreement shall be valid or binding unless in writing and duly signed and executed by each of the Parties. Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2013 -14 Page 6 of 7 SECTION 12. WAIVERS / MODIFICATONS No waiver of any duty or obligation under this Agreement shall be valid, unless expressly waived in writing by the Party to whom the duty or obligation is owed. No alteration, amendment or modification of this Agreement shall be valid or binding, unless mutually approved by the Parties in writing. SECTION 13. GOVERNING LAW This Agreement shall be governed by the laws of the State of California. SECTION 14. INTERPRETATION In preparing and executing this Agreement, each of the Parties received the opportunity to consult with their respective legal counsel. Accordingly, this Agreement, shall not be in favor of one Party over the other in the event of ambiguity, but instead shall be interpreted as if both Parties prepared this Agreement together. SECTION 15. AUTHORITY TO EXECUTE AGREEMENT: RHCDC warrants, represents and agrees that it has duly approved the execution of this Agreement and that upon the execution of this Agreement, RHCDC shall provide CITY with a corporate resolution authorizing the execution of this Agreement on its behalf under the terms and conditions stated herein. RHCDC's signatory to this Agreement personally warrants, represents and agrees that he or she is duly authorized to execute this Agreement on behalf of RHCDC and thereby bind RHCDC to the terms and conditions contained herein. IN WITNESS WHEREOF, CITY and RHCDC have caused this Agreement to be executed by their duly authorized representatives. This Agreement is effective as of July 1, 2013. (SIGNATURES ON NEXT PAGE) Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnersbips Program Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2073 -74 Page 7 of 7 CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: BY: Xaxzl� 4L e�— Donna L D uncan PR ESIDENT CITY MANAGER Attest Gloria-M6114.. - •&• ;. Approved as to Form: By: achel Richman Burke, Williams & Sorensen, LLP City Attorney Catalog of Federal Domestic Assistance (CFDA) Number: 14.239 CFDA Title: HOME Investment Partnerships Program AC40R" EVIDENCE OF PROPERTY INSURANCE f d 6 DATE(MM /DD/YYYY) 8/27/2012 THIS EVIDENCE OF PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE ADDITIONAL INTEREST. AGENCY PHONE (714)905 -1923 COMPANY A/C No Ext : Hayward Tilton & Rolapp Insurance Associates, North American Elite Ins Co CA Dept. of Ins. Lic. #0614365 PO Box 8507 888 S. Disneyland Dr., Ste 400 Anaheim CA 92802 -1846 Santa Cruz CA 95061 F AX ..,.(714)905 -1910 E- MAII FSS. ericm@htrinsure.com CODE: SUB CODE: DEDUCTIBLE Building, Replacement Cost, Special form Loss of Rents, Special form AGENCY 00006107 CUSTOMER ID #: INSURED Rio Hondo Community Attn : Tom Morgan 11706 Ramona Blvd. El Monte Development Corp. Ste 107 CA 91732 LOAN NUMBER POLICY NUMBER CWB00035850714181 EFFECTIVE DATE 8/2612012 EXPIRATION DATE 8/26/2013 CONTINUED UNTIL F TERMINATED IF CHECKED THIS REPLACES PRIOR EVIDENCE DATED: PROPERTY INFORMATION LOCATIONIDESCRI PTION Loc# 00009 /Bldg# 00001 9331 Glendon Way Rosemead, CA 91770 See Attached Overflow Pages THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. COVERAGE INFORMATION COVERAGE /PERILS /FORMS AMOUNT OF INSURANCE DEDUCTIBLE Building, Replacement Cost, Special form Loss of Rents, Special form 235,200 10,788 1,000 uona CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLI PROVISIONS. ADDITIONAL INTEREST City of Rosemead Attn: Michelle Ramirez 8838 East Valley Rosemead, CA 91770 MORTGAGEE LOSS PAYEE ADDITIONAL INSURED Addl insured & mortgagee d Hx LOAN# AUTHORIZED REPRESENTATIVE Connie Jones, CIC /COJ ACORD 27 (2009/12) V 9993 -ZUUV ACORD CORPORATION. All rights reserved. INS027 (200912).02 The ACORD name and logo are registered marks of ACORD ADDITIONAL COVERAGES Ref # 10 Description 8628 Landis view Lane, Building, 428,000 Coverage Code SPC Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount 1,000 Deductible Type Premium Ref # 10 Description 8628 Landis view Lane, Loss of Rents, 11,460 Coverage Code SPC Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 1 - 6eductibleAmount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium Ref # Description Coverage Code Form No. Edition Date Limit 1 Limit 2 Limit 3 Deductible Amount Deductible Type Premium �OFADTLCV Copyright 2001, AMS Services, Inc. A� " CERTIFICATE OF LIABILITY INSURANCE 8/28/ ' THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Hayward Tilton & Rolapp Insurance Associates, CA Dept. of Ins. Lic. #0614365 888 S. Disneyland Dr., Ste 400 Anaheim CA 92802 -1846 CONTACT Connie Jones CIC NAME: I P A NE (714) 905 -1923 AC No: (719)905 - 1910 Ext, A E b m ,% L ESS , conniej @htrinsure.com INSURERS AFFORDING COVERAGE NAIC# INSURER A:NO rofits' Ins Alliance of CA 11845 INSURED Rio Hondo Community Development Corp. Attn : Tom Morgan 11706 Ramona Blvd. Ste 107 E1 Monte CA 91732 INSURER B: Connie Jones, CIC /COJ INSURER C: INSURER D: INSURER E: $ 1,000,000 INSURER F: $ 500,000 COVERAGES CERTIFICATE NUMBER-CL1282724526 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL SUBR POLICY NUMBER POLICY EFF MM /DD/YYYY POLICY EXP MMIDD/YWY LIMITS GENERAL LIABILITY Connie Jones, CIC /COJ EACH OCCURRENCE $ 1,000,000 DAMAGE TO RENTED PREMISES Ea occurrence $ 500,000 X COMMERCIAL GENERAL LIABILITY A CLAIMS -MADE ❑X OCCUR X 201014181NPO /26/2012 /26/2013 MED EXP (Any one person) $ 20,000 PERSONAL & ADV INJURY $ 1,000,000 GENERAL AGGREGATE $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS- COMP/OPAGG $ 2,000,000 $ X1 POLI PRO LOC AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT Ea accident $ BODILY INJURY (Per person) $ ANY AUTO ALL OWNED SCHEDULED AUTOS BODILY INJURY (Per accident) $ PROPERTY DAMAGE Per accident $ NON OWNED HIREDAUTOS AUTOS UMBRELLA LIAB H OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESS LIAB CLAIMS -MADE DED I I RETENTION $ $ WORKERS COMPENSATION I WC STATU- I OTH- ER AND EMPLOYERS' LIABILITY y / N ANY PROPRIETOR/PARTNERIEXECUTIVE E.L. EACH ACCIDENT $ OFFICER/MEMBER EXCLUDED? F—] NIA (Mandatory in NH) E.L. DISEASE - EA EMPLOYE $ If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $ DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (Attach ACORD 101, Additional Remarks Schedule, if more space is required) Property: 9331 Glendon Way, Rosemead, CA. 91770 Property: 8628 Landis View Lane, Rosemead, CA. 91770 Certificate Holder is Included as Additional Insured as required per written contract or agreement per Form CG2026 07/04 *CANCELLATION: 10 -days Notice for Non - Payment of Premium and /or Non - Reporting of Payroll or 30 days for all other reasons. CERTIFICATE HOLDER CANCELLATION ACORD 25 (2010/05) INS025 (201005).ot ©1988 -2010 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Rosemead Attn: Michelle Ramirez AUTHORIZED REPRESENTATIVE 8838 East Valley Rosemead, CA 91770 Connie Jones, CIC /COJ ACORD 25 (2010/05) INS025 (201005).ot ©1988 -2010 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD 2011 AFFORDABLE HOUSING DEVELOPMENT LOAN AGREEMENT CITY OF ROSEMEAD, ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION THIS 2011 AFFORDABLE HOUSING DEVELOPMENT LOAN AGREEMENT (the "Agreement ") is dated as of March 22, 2011 by and between the Rio Hondo Community Development Corporation, a California non -profit public benefit corporation (the "Borrower "); the City of Rosemead, a public body (the "City"), and the Rosemead Community Development Commission, a public body (the "CDC ") (the City and the CDC also collectively referred to as the "Beneficiaries "), and is made and executed in light of the factors set forth in the following Recitals: - RECITALS - 1. Borrower has requested the City provide a zero percent (0 %) loan, subject to a final balloon payment at the expiration of the fifty -five (55) year term limit, in a total principal amount not to exceed the sum of Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00), and the CDC provide a zero percent (0 %) forgivable loan in a total principal amount not to exceed the sum of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00), for a total sum of Four Hundred Twenty-Eight Thousand Four Hundred Dollars ($428,400.00), in support of affordable rental housing and affordable single family housing preservation, rehabilitation, development and operations program of the Borrower which will support and implement the affordable housing preservation, rehabilitation and development goals of the City and the CDC. 2. The City and CDC are willing to loan such an amount to Borrower under the terms and conditions specified in this Agreement and in the "Related Loan Documents" as this term is hereinafter defined. 3. Borrower understands and agrees that: (A) in providing the Loan as defined and set forth in this Agreement, the City and CDC are relying upon Borrower's representations, warranties, and agreements as provided below; and, (B) such Loan shall be and remain subject to the terms and conditions of this Agreement. FOLLOWS: THE BORROWER, THE CITY, AND THE CDC HEREBY AGREE AS Section 1. EFFECTIVE DATE AND TERM. This Agreement shall be dated as of March 22, 2011, and shall be effective as of the specific date provided in Section 12(19), below, (the "Effective Date ") and shall continue thereafter until the indebtedness of the Borrower to the City and the CDC has been paid in full, and the parties terminate this Agreement in writing. 1 Section 2. DEFINITIONS. In addition to the words defined elsewhere in this Agreement, the following words shall have the following meanings when used in this Agreement. All references to dollar amounts shall mean amounts in lawful money of the United States of America. • Advance. The word "Advance" refers to the disbursement by the City and the CDC of the proceeds of the Loan to the Borrower. • Agreement. The word "Agreement" means this 2011 Affordable Housing Development Loan Agreement, together with all exhibits and schedules attached to this Agreement from time to time. • Borrower. The word "Borrower" means the Rio Hondo Community Development Corporation, a California non -profit public benefit corporation. • Budget. The word "Budget" means and refers to the Program Budget attached as Exhibit "B" relating to the Advance, which has been prepared by the Borrower and approved by the City and the CDC. • Collateral. The word "Collateral" means and includes without limitation all property and assets granted as collateral security for the Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust received, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. • Collateral Documents. The words "Collateral Documents" mean and refer to each of the following: (i) the Deed of Trust; and (ii) all other documents and instruments securing any of the Indebtedness. • Deed of Trust. The words "Deed of Trust" mean and refer to the Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement, date the date of the Promissory Note, by and among the Borrower, as Trustor, United Title Company, as Trustee, and the City and the CDC, as Beneficiaries. • Environmental Conditions. The words "Hazardous Substance," mean (1) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws (defined below) as a "hazardous substance," "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic substance," "toxic pollutant" or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or "EP toxicity" and (2) any petroleum product, natural gas, natural gas liquids, liquified natural gas and 2 synthetic gas usable for fuel (or mixtures of natural gas such as synthetic gas) which is not stored in a motor vehicle for use in the regular course of operation of such motor vehicle; and the words "Environmental Laws" as used herein mean any and all present and future federal, state and local laws (whether under common law, statute, rule, regulation or otherwise), requirements of permits issued with respect thereto, and other requirements of governmental authorities relating to the environmental regulation of any Hazardous Substance (including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601, et sec.) ( "CERCLA ") and the applicable provisions of the California Health and Safety Code and the California Water Code, all as heretofore or hereafter amended from time to time). • Event of Default. The words "Event of Default' mean and include without limitation any of the Events of Default set forth below in Section 9, titled "Events of Defaults." • HOME Regulatory Agreement. The words "HOME Regulatory Agreement' mean and refer to the HOME Investment Partnership and Redevelopment Low and Moderate Income Housing Funds Regulatory Agreement, dated March 22, 2011 by and between the Borrower and the City of Rosemead. The HOME Regulatory Agreement evidences the covenant of the Borrower to preserve, operate and maintain the Rental Housing Property at affordable rents available to persons and households of very low- and low - income for the period set forth therein. • Improvements. The word "Improvements" means and includes without limitation all existing structures, facilities, fixtures, additions and similar construction on the Rental Housing Property which are owned by the Borrower. • Indebtedness. The word "Indebtedness" means and includes the amounts payable under the Promissory Note described in Section 3 and all amounts disbursed by the City and the CDC in respect of the Loan or otherwise payable to the City and the CDC by the Borrower under the Promissory Note or any of the Related Loan Documents. • Loan. The word "Loan" means the loan to be made to Borrower by the City under this Agreement and the Related Documents as described below in a maximum principal amount not to exceed Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00). The word "Loan" also means the loan to be made to Borrower by the CDC under this Agreement and the Related Documents as described below in a maximum principal amount not to exceed Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00). • Promissory Note. The words "Promissory Note" mean the promissory note, described below in Section 3, in an original principal amount not to exceed Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00) from the City, and Two Hundred One Thousand Three Hundred Fourteen Dollars 91 ($201,314.00) from the CDC, for a sum total amount of Four Hundred Twenty - Eight Thousand Four Hundred Dollars ($428,400.00), together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for the Promissory Note. The form of the Promissory Note is attached as Exhibit "C " . • Rental Housing Property or Property. The words "Rental Housing Property" or "Property" mean and refer to the one (1) improved legal parcel of land which is situated in the City of Rosemead and generally identified as follows: (i) 8628 Landis View Lane, Rosemead, California (there is 1 single family rental dwelling unit situated on this parcel); and together with all accessions, parts, and additions to, all replacements of, and all substitutions for any of such property identified in the preceding subparagraph, and all proceeds (including insurance proceeds and refunds of premiums) from any sale, casualty loss, condemnation or other disposition of such property. A legal description of the Rental Housing Property is attached to this Agreement as Exhibit "A " • Related Loan Documents. The words "Related Loan Documents" mean and include without limitation all instruments, agreements and documents, whether now or hereafter existing, executed by the Borrower and delivered to the City and the CDC in connection with the Loan and the Indebtedness, including, without limitation, this Agreement, the Promissory Note and the Collateral Documents. • Title Company. The words "Title Company" mean and refer to a title insurance company escrow department designated by the City and the CDC which shall serve as the loan escrow accommodation agent of the parties for the exchange and recordation of the various Collateral Documents and Related Loan Documents, and the disbursement of the proceeds of the Loan to the Borrower as set forth in Section 5. Section 3. THE LOAN. (a) The Loan shall be in a principal amount not to exceed the sum of Two Hundred Twenty -Seven Thousand and Eighty-Six Dollars ($227,086.00) provided by the City, and Two Hundred and One Thousand Three Hundred and Fourteen Dollars ($201,314.00) provided by the CDC, for a total sum of Four Hundred Twenty-Eight Thousand Four Hundred Dollars ($428,400.00), or so much thereof as the Beneficiaries may make available to the Borrower as the net proceeds (after certain costs and reserves are established) disbursed by the Beneficiaries, on or before March 22, 2011. The Loan, or so much of the Loan as may be disbursed to the Borrower, shall be evidenced by the Promissory Note in the form attached hereto as Exhibit "C " . The Loan shall have a term of fifty -five (55) years from the date of the initial Advance. The Loan shall be evidenced by the Promissory Note. The date of the Promissory Note shall be the date on which the CDC makes the Advance of proceeds under the 0 Loan to the Borrower as provided in Section 5. The CDC Loan amounts shall be forgivable if a Default does not occur prior to the 55 -year term limit as described in the Promissory Note. The City Loan amounts shall be payable in full at the end of the 55 -year term limit as described in the Promissory Note. If a Default occurs prior to the end 55 -year term limit, the City and CDC shall have the right full payment of all Loan amounts. The Promissory Note shall be secured by the Deed of Trust, pursuant to which the Borrower grants to the CDC a first lien position in the Rental Housing Property. (b) The Loan shall be payable as set forth in the Promissory Note. (c) The Borrower shall use the proceeds of the Loan solely for the purposes set forth below: The Loan shall be used and applied by the Borrower to acquire 8628 Landis View Lane, Rosemead, California for development, improvement, operation and/or resale to qualified very low -and low- income purchasers or renters, as applicable, of the Affordable Housing Units. Section 4. GENERAL REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to the City and the CDC, as of the date of this Agreement and the date of the Promissory Note and at all times that any balance of the Loan is outstanding: (1) Borrower is and shall maintain during the period of time when any principal balance of the Loan may remain outstanding its status as a California non - profit public benefit corporation, duly organized and existing and authorized to transact business in California and the Borrower has previously qualified as a 501(c)(3) tax exempt entity under applicable federal tax laws; (2) Borrower is a "Community Housing Development Organization" ( "CHDO "), as this term is defined at 24 CFR Part 92.2, and the Borrower shall continuously maintain its status as a CHDO during the term of time when any principal balance of the Loan may remain outstanding; (3) the corporate charter and by -laws of the Borrower authorize the Borrower to enter into this Agreement and to undertake the affordable housing preservation, operation and development activities contemplated hereunder, and the governing board and membership of the Borrower has previously taken all action necessary to authorize the execution of this Agreement by the Borrower; (4) the Borrower is qualified to undertake and complete the affordable housing preservation, operation and development activities contemplated under this Agreement; 5 (5) each financial statement of Borrower supplied to the City and the CDC truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to the City and the CDC. Borrower has no material contingent obligations except as disclosed in such financial statements; (6) the Borrower has conducted a due and diligent inquiry and investigation of the environmental condition of the Rental Housing Property relating to the potential presence of Hazardous Substances and the use thereon of Hazardous Substances and based upon such inquiry, the Borrower represents to the City and the CDC that as of the date of the Promissory Note, the Borrower is unaware of any adverse environmental conditions relating to the presence or potential presence of Hazardous Substances; (7) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened and no other event has occurred which may materially adversely affect Borrower's financial condition, or the Rental Housing Property, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by the City and the CDC in writing; (8) Borrower has on the date of the Promissory Note and the Advance good and marketable title to the Rental Housing Property free and clear of all defects, liens, and encumbrances, excepting only liens for taxes, assessment, or governmental charges or levies not yet delinquent or payable without penalty or interest and such liens and encumbrances as may be approved in writing by the City and the CDC prior to the date of the Promissory Note and the Advance; (9) no tenant in lawful possession of the Rental Housing Property shall be in arrears in its rental obligation to the Borrower unless Borrower has initiated reasonable measures acceptable to the City and the CDC to correct such arrearage in rent, and each rental agreement is in full force and effect without any other default by the renter unless Borrower has initiated reasonable measures to obtain the cure of any such other default; (10) the information set forth in the Budget generally describes the proposed housing improvements and activities to be undertaken by the Borrower. The Borrower shall not materially alter or modify the programs set forth in the Budget without consent of the City and the CDC; (11) Borrower understands and agrees that the City and the CDC are each relying upon the above representations and warranties in extending the Loan and making the Advance to Borrower. Borrower further agrees that the foregoing representations and warranties shall be continuing in nature and shall remain in full force and effect until such time as the Loan and Promissory Note shall be paid in full, or until the Agreement is terminated, whichever is the last to occur. Section 5. CONDITIONS PRECEDENT TO THE LOAN AND DISBURSEMENT OF THE ADVANCE. (a) The proceeds of the Loan shall be disbursed to the Borrower in a single Advance. The aggregate amount of the Advance under Section 5(b) shall not exceed the sum of Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00) from the City, and the sum of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00) from the CDC, for a total sum of Four Hundred Twenty -Eight Thousand Four Hundred Dollars ($428,400.00). The Advance shall occur by a date no later than June 1, 2011. The obligation of the CDC to make the Loan and provide the Advance under Section 5(b) shall be subject to the fulfillment and satisfaction by the Borrower of all of the conditions set forth in this Agreement and the following: (1) Borrower shall have provided to the City and the CDC an ALTA Extended Coverage Lender's Policy with such endorsements as the City and the CDC may require, issued by a title insurance company acceptable to the City and the CDC and in a form, amount, and content satisfactory to the Executive Director of the CDC insuring or agreeing to insure that the City's and the CDC's Deed of Trust on the Rental Housing Property is, or will be upon its recordation be, a valid first priority lien on the Rental Housing Property free and clear of all defects, liens, encumbrances, and exceptions except as to those security lien obligations approved by the Executive Director in writing; (2) Unless waived by the City and the CDC in writing, Borrower shall have delivered to the City and the CDC the insurance policies or evidence thereof as described in the Deed of Trust; (3) There shall not exist on the date of the Promissory Note and the Advance a condition which would constitute an Event of Default under this Agreement; (4) Each of the representations and warranties of the Borrower set forth in Section 4 shall be true and correct. (5) Prior to or currently with the Advance the Borrower shall have executed the Promissory Note and all of the Related Loan Documents; (6) Prior to or currently with the Advance the Borrower shall have delivered to the City and the CDC an approving legal opinion of its legal counsel in a form reasonably acceptable to the City and the CDC stating that the Borrower has taken all necessary action to approve the Loan and transaction contemplated under this Agreement, that the Loan, the Agreement and each of the Related Loan Documents, are properly 7 executed by the Borrower and each evidences a valid, lawful and binding obligation of the Borrower, and such other matters as required by the City and the CDC; and (7) At least ten (10) days prior to the Advance, the Borrower shall have submitted to the City and the CDC its appropriately detailed Budget for the use of the proceeds of the Advance, and the Executive Director shall have approved such Budget for the Advance, and such approval of the Executive Director shall not be unreasonably conditioned, withheld or delayed. (8) (b) Provided that all of the conditions for the Advance have been satisfied, the City shall disburse the sum of $227,086.00, and the CDC shall disburse the sum of $201,314.00, or such lesser sum as the Borrower may request, on or before June 1, 2011. Section 6. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with the City and the CDC that, while this Agreement is in effect, Borrower will: (1) promptly inform the City and the CDC in writing of (A) all material adverse changes in Borrower's financial condition, and (B) all existing and threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower which could materially affect the financial condition of Borrower; (2) maintain its books and records in accordance with generally accepted accounting principles, applied on a consistent basis and permit the City and the CDC to examine and audit Borrower's books and records at all reasonable times; (3) furnish such additional information and statements, list of assets and liabilities, agings of receivables and payables, inventory schedules, budgets, forecasts, tax returns, and other reports with respect to Borrower's financial condition and business operations which the City and the CDC may request from time to time; (4) comply with all laws, ordinances, and regulations, now or hereafter in effect of governmental authorities applicable.to the use or occupancy of the Rental Housing Property including without limitation `Environmental Laws" as defined in Section 2, above. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified the City and the CDC in writing prior to doing so and so long as, in the City's and the CDC's sole opinion, the City's and the CDC's interests in the Rental Housing Property are not jeopardized. The City and the CDC may require Borrower to post adequate security or a surety bond, reasonably satisfactory to the City and the CDC, to protect the City's and the CDC's interest; (5) use the proceeds of the Loan solely for the purposes set forth in Section 3 and for expenses directly related to the Loan and the execution and delivery of the Promissory Note and the Deed of Trust and the Related Loan Documents; (6) pay and discharge when due all of Borrower's other indebtedness, obligations, and claims (exclusive of the Deed of Trust) which, if unpaid, might become a lien or charge upon the Rental Housing Property; provided, however, that Borrower shall not be required to pay and discharge any such indebtedness, obligation, or claim so long as (A) its legality is being contested by Borrower in good faith by appropriate proceedings, (B) the indebtedness, obligation, or claim does not become a lien or charge upon any of the Rental Housing Property, and (C) Borrower shall have established on its books adequate reserves with respect to the amount contested in accordance with generally accepted accounting practices; (7) perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Borrower and the City and the CDC, including without limitation the HOME Regulatory Agreement and the Related Loan Documents, and in all other loan agreements now or hereafter existing between Borrower and any other party. Borrower shall notify the City and the CDC immediately in writing of any default in connection with any such agreement; (8) make, execute, and deliver to the City and the CDC such security agreements, instruments, documents, and other agreements reasonably necessary to document and secure the Loan and to perfect the security interest of the City and the CDC in any of the Rental Housing Property; (9) submit affordable rental housing continuous compliance reports with respect to the Rental Housing Property as provided under the HOME Regulatory Agreement for and approved by the City and the CDC; (10) The Borrower shall improve the Rental Housing Property in a good and workman -like manner and shall complete the improvements thereon within 90 calendar days following the date of recordation of the HOME Regulatory Agreement on such Rental Housing Property; (11) The Borrower hereby covenants and agrees to use the rental or net sales proceeds realized by the rental or sale of the Rental Housing Property (after the payment of permitted development costs) for the affordable housing development purposes of the Borrower, as a community E housing development organization, for other affordable housing improvement projects in the City of Rosemead. Borrower shall provide the City and the CDC with written confirmation that it is in compliance with this covenant annually, until the fifty -fifth (55th) anniversary of the date on which the Deed of Trust is recorded =. Section 7. NEGATIVE COVENANTS. Borrower covenants and agrees with the City and the CDC that while this Agreement is in effect, Borrower shall not, without the prior written consent of the City and the CDC: (1) Indebtedness and Liens. (A) Incur or assume indebtedness for borrowed money, including capital leases, (B) sell, transfer, mortgage, assign, pledge, or lease any of the Rental Housing Property (except for leases of rental dwelling units on any of the Rental Housing Property to qualified tenants), (C) grant a security interest in, or encumber any of Borrower's assets, or (D) sell with recourse any of Borrower's accounts. (2) Continuity of Operations. (A) engage in any business activities substantially different than those in which Borrower is presently engaged, (B) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change ownership, change its name, dissolve or transfer or sell any property or assets out of the ordinary course of business, or (C) make any distribution with respect to any capital account, whether by reduction of capital or otherwise. (3) Loans, Acquisitions and Guaranties. (A) loan, invest in or advance money or assets to third - parties except to first time homebuyers under a mortgage program approved by the City and the CDC, (B) purchase, create or acquire any interest in any other enterprise or entity, or (C) incur any obligation as surety or guarantor other than in the ordinary course of business. (4) Liens. Create or allow to be created any lien or charge upon any of the Rental Housing Property, except for liens and charges in favor of the City and the CDC. (5) Hazardous Substances. Use, store, dispose of or release, or permit the use, storage, disposal or release, of any Hazardous Substance in, on, under or about the Rental Housing Property, except to the extent the same is in strict compliance with all applicable Environmental Laws. Section 8. GENERAL LOAN PROVISIONS. The following provisions relate to the Loan: (1) General Indemnity. Borrower shall indemnify, defend with counsel selected by the City and the CDC, protect and hold the City and the CDC, and their respective officials, officers, employees, agents and successors, 10 harmless from and against any and all claims, losses, liabilities, fines, penalties, damages, actions, judgments, costs and expenses (including attorneys' fees and expenses) asserted against them, or any of them, by any person, entity, or governmental body, arising out of or in connection with the use, operation or ownership of the Rental Housing Property by the Borrower or its agents, employees, tenants or permittees. The City and the CDC shall be entitled to appear in any action or proceeding to defend itself against such claims, and all costs incurred by the City and the CDC in connection with such defense, including attorneys' fees, shall be paid by Borrower to the City and the CDC. The City and the CDC shall, in their sole discretion, be entitled to settle or compromise any asserted claims, and such settlement shall be binding upon Borrower for purposes of the indemnification under this Section 8(1). All amounts paid by the City and the CDC under this Section 8(1), if any, shall be secured by the Deed of Trust and be payable upon demand, and shall bear interest at the maximum rate permitted by law. (2) Special Environmental Indemnity. Borrower shall indemnify, defend with counsel selected by the City and the CDC, protect and hold harmless the City and the CDC, and their respective officials, officers, employees, agents and successors (collectively, "Indemnified Parties" or singularly, "Indemnified Party ") from and against all claims, damages (including without limitation, special and consequential damages), punitive damages, injuries, costs, response costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal and administrative proceedings, interest, fines, charges, penalties and expenses (including without limitation (A) attorney's, engineer's, consultant's and expert witness fees and costs incurred in defending against any of the foregoing or in enforcing this indemnity and (B) any diminution in the value of the Property) of any kind whatsoever paid, incurred or suffered by any Indemnified Party, or asserted against the Property, directly or indirectly arising from or attributable to (i) any breach by the Borrower of any of its agreements, representations or warranties set forth in Section 4(6) or Section 7(5), or (ii) any repair, cleanup, remediation, detoxification, closure or preparation and implementation of any plan therefor undertaken by any Indemnified Party concerning Hazardous Substances on, under or about any of the Rental Housing Property. The foregoing indemnity shall apply whether acts of any Indemnified Party are undertaken because of proceedings initiated by any federal, state or other government authority or by any private persons(s). The foregoing indemnity is intended by the parties to be an agreement pursuant to Section 107(e) of CERCLA, 42 U.S.C. Section 9607(e) and California Health and Safety Code Section 25364. (3) Special Covenant to Give Notice to the City and the CDC. The Borrower shall promptly give the City and the CDC (i) a copy of any notice, correspondence or information the Borrower receives from any federal, state or other government authority regarding Hazardous 11 Substances on, under or about the Rental Housing Property or regarding any actions, instituted, completed or threatened by any such governmental authority concerning Hazardous Substances which affect or may affect the Rental Housing Property, (ii) written notice of any knowledge or information the Borrower obtains regarding Hazardous Substances on, under or about the Rental Housing Property or expenses or losses incurred or expected to be incurred by the Borrower, third party or any government agency to study, assess, contain or remove any Hazardous Substances on, under or about the Rental Housing Property for which expense or loss the Borrower may be liable or for which a lien may be imposed on the Rental Housing Property, (iii) written notice of all claims made or threatened by any third party (other than government authority) against the Borrower or the Rental Housing Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Substance and (iv) written notice of the Borrower's discovery of any occurrence or condition on any land adjacent to the Rental Housing Property that could cause the Rental Housing Property to be classified as "border -zone property" under the provisions of California Health and Safety Code Sections 25220, et seg., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Rental Housing Property under any of the statutes referred to in the preceding paragraph or any regulation adopted pursuant thereto. (4) Actions. The City and the CDC shall have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the parties to this Agreement. In connection with this right, the City and the CDC may incur and pay reasonable costs and expenses, including, but not limited to, attorneys' fees, for both trial and appellate proceedings. Borrower covenants to pay to the City and the CDC on demand all such expenses, together with interest from the date the City and the CDC may incur the expense at the maximum rated permitted by law. Section 9. EVENTS OF DEFAULT. (a) Default By City or the CDC. The following shall constitute a default by the City or the CDC: failure to fund the Loan as provided in Section 5 of this Agreement. (b) Default By Borrower. The following shall constitute a default by the Borrower: failure by the Borrower to perform or a delay in performing or a failure to comply with any term or provision of this Agreement or any of the Related Agreements, including the failure to operate or make the Rental Housing Property available for occupancy to persons and households of very low- and low - income, or a default or breach under the Promissory Noteor under the HOME Regulatory Agreement where such failure or delay or noncompliance is not corrected within thirty (30) days 12 of notice thereof by the City and the CDC. The City and the CDC reserve the right to exercise any and all remedies under the law against RHCDC, as provided for in Section 10 of this Agreement. Section 10. REMEDIES BY BORROWER OR CDC (a) Remedies of Borrower. Upon a default by the City and the CDC, the Borrower may seek appropriate legal or equitable relief for the default of the City and the CDC. (b) Remedies of the City and the CDC. Upon a default by the Borrower, the City and the CDC may, at their option, and in addition to all other rights and remedies available to them, all of which are cumulative and not alternative: (i) declare all sums due under the Promissory Note immediately due and payable; (ii) institute suit for the foreclosure of the Deed of Trust or deliver to the trustee under the Deed of Trust a written declaration of default by Borrower and of election to cause the Rental Housing Property to be sold, all as provided in the Deed of Trust; (iii) institute any proceeding at law or in equity to enforce the obligations and covenants of the Borrower under this Agreement, the Promissory Note, the Deed of Trust, or any Affordable Housing Regulatory Agreement. (c) In any action brought under this Agreement, the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses (including reasonable attorney's fees) in bringing such action. Additionally, the City and the CDC shall be entitled to any costs, including reasonable attorney's fees, incurred in collecting amounts due the City and the CDC under the Promissory Note. For the purpose of the preceding sentences, the words "reasonable attorney's fees" means and includes, without limitation, the salary and expenses of in -house lawyers employed by the City and the CDC who may perform legal services in connection with such an action computed on an hourly basis. Section 11. TERMINATION OF AGREEMENT. Exempt for the provisions of Section 6(11) which shall survive and remain in effect for a period of five (5) years following the repayment in full of the Loan and the provisions of Sections 8(1) and 8(2) and Section 12(2) which shall survive and remain in effect in perpetuity, the remaining provisions of this Agreement shall terminate upon the payment in full by the Borrower of all amounts due under the Promissory Note. Section 12. HOUSING AFFORDABILITY COVENANT OF THE BORROWER AND MISCELLANEOUS PROVISIONS. The following provisions are a part of this Agreement: (1) Housing Affordability Covenant. Concurrently with the Advance, the Borrower shall cause to be recorded the HOME Regulatory Agreement which shall affect Borrower's title in the Rental Housing Property. The HOME Regulatory Agreement contains certain affordable rental housing 13 regulatory and affordability covenants which shall run with the land and the Rental Housing Property for a term of fifty five (55) years following its recordation. The text of the HOME Regulatory Agreement is incorporated into this Agreement by this reference. During the term of this Agreement, any amendment of the HOME Regulatory Agreement shall be subject to the prior written approval of the CDC as provided in Sectionl2(4) of this Agreement. (2) Discrimination Prohibited. The Borrower covenants and agrees that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability" in the use, operation, occupation, lease, sublease, transfer or sale of the Rental Housing Property, nor shall the Borrower, or any third party related to the Borrower establish or permit any such practice of discrimination or segregation to occur on the Rental Housing Property in connection with the selection, location, number or occupancy of residents in any of the rental dwelling units on the Rental Housing Property. The text of Health and Safety Code Section 33375 which sets forth the general form of non - discrimination clauses to be included in each lease or contract entered into by the Borrower with respect to the Rental Housing Property, is hereby incorporated in this Agreement by this reference. (3) No Joint Venture. Nothing in this Agreement shall be construed to constitute the creation of a partnership or joint venture between the City, CDC and Borrower. The City and the CDC are not agents or representatives of Borrower and the Borrower is not an agent or representative of the City or the CDC. This Agreement does not create a contractual relationship with and shall not be construed to benefit or bind the City and the CDC in any way with or create any contractual duties by the City and the CDC to any contractor, subcontractor, materialman, laborer, or any other person. (4) Amendment. This Agreement may be amended as deemed necessary only by written instruments duly approved by the Borrower, the City and the CDC. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by the parties hereto and only after the approval thereof by official action of the City and the CDC; provided however, that the Executive Director in consultation with legal counsel for the City and the CDC, is authorized to make non- substantive revisions and changes to the text of any instrument attached hereto as an exhibit prior to the delivery of such instrument by the Borrower. (5) Applicable Law. This Agreement has been delivered to the City and the CDC and accepted by the City and the CDC in the State of California. If 14 there is a lawsuit arising under this Agreement, the Superior Court of Los Angeles County, State of California shall have jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California. (6) Authority to File Notices. Borrower appoints and designates the City and the CDC as its attorney -in -fact to file for record any notice that the City and the CDC deem necessary to protect their interests under this Agreement. This power shall be deemed coupled with an interest and shall be irrevocable while any sum or performance remains due and owing under the Promissory Note or any of the Related Loan Documents. (7) Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. The recitals and exhibit to this Agreement are a part of this Agreement. (8) Consent to Sale of Loan and Promissory Note by the City and the CDC. Borrower agrees and consents to the sale, transfer or collateral assignment, whether now or later by the City and the CDC of the Loan, the Promissory Note and the Deed of Trust (or to any participating interest therein) to a third party including without limitation Community Reinvestment Fund, Inc., and Borrower further waives all right of offset or counterclaim that it may have now or later against the City and the CDC or against any purchaser of the Loan, the Promissory Note and the Deed of Trust (or a participating interest therein) and Borrower unconditionally agrees that the City and the CDC, and each such purchaser (including successors to purchasers), may enforce Borrower's obligations to the City and the CDC hereunder. Borrower further agrees that such purchaser from the City and the CDC may enforce its interests irrespective of any personal claim or defense that Borrower may have against the City and the CDC. (9) INTENTIONALLY BLANK (10) Costs and Expenses. The City and the CDC may pay someone else to help collect the Loan and to enforce this Agreement, and Borrower will pay that amount. This includes, subject to any limits under applicable law, attorneys' fees and legal expenses of the City and the CDC, whether or not there is a lawsuit, including reasonable attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services. Borrower also will pay any court costs, in addition to all other sums provided by law. For the purposes hereof, the words, "reasonable attorney's fees" in the case of the City and the CDC means and includes the salaries and benefits payable to the lawyers employed in the office of the City Attorney and the Legal Counsel to the CDC, as allocated on an 15 hourly basis for any such legal services performed on behalf of the City and the CDC hereunder. (11) Entire Agreement. This Agreement and the Related Documents constitute all of the agreements between the parties relating to the subject matter hereof and thereof and supersede all other prior or concurrent oral or written agreements or understandings with respect to that subject matter. The City and the CDC have no obligation to extend any additional credit to the Borrower for any other purpose. (12) Notices. All notices, requests, demands and other communications required or permitted to be given under the terms of this Agreement by one party to the other shall be in writing addressed to the recipient parry's Notice Address set forth below and shall be deemed to have been duly given or made (a) if delivered personally (including by commercial courier or delivery service) to the party's Notice Address, then as of the date delivered (or if delivery is refused, on presentation), or (b) if mailed by certified mail to the party's Notice Address, postage prepaid and return receipt requested, then at the time received at the parry's Notice Address as evidenced by the return receipt, or (c) if mailed by first class mail to the parry's Notice address, postage prepaid, then on the third (3rd) business day following deposit in the United States Mail. Any party may change its Notice Address by a notice given in the foregoing form and manner. The Notice Addresses of the parties are: TO CDC: Rosemead Community Development Commission 8838 E. Valley Boulevard Rosemead, California 91770 Arm.: Executive Director (626) 569 -2106 TO BORROWER: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn.: President (626) 401 -2784 TO CITY: City of Rosemead Administration Department 8838 E. Valley Boulevard Rosemead, California 91770 Arm.: City Manager (626) 569 -2106 (13) Successors and Assigns. All covenants and agreements contained by or on behalf of Borrower shall bind its successors and assigns and shall inure to the benefit of the City and the CDC, its successors and assigns. Borrower shall not, however, have the right to assign its rights under this 16 Agreement or any interest therein, without the prior written consent of the City and the CDC. (14) Severability. If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. (15) Survival. All warranties, representations, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to the City and the CDC under this Agreement shall be considered to have been relied upon by the City and the CDC and will survive the making of the Loan and delivery to the City and the CDC of the Related Loan Documents, regardless of any investigation made by the City and the CDC (16) Time is of Essence. Time is of the essence in the performance of this Agreement. (17) Waiver. The City and the CDC shall not be deemed to have waived any rights under this Agreement, either orally or by a course of conduct, but only if such waiver is given in writing and signed by the City and the CDC. No delay or omission on the part of the City and the CDC in exercising any right shall operate as waiver of such right or any other right. A waiver by the City or the CDC of a provision of this Agreement shall not prejudice or constitute a waiver of the right of the City and the CDC otherwise to thereafter demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by the City or the CDC shall constitute a waiver of any of the rights of the City and the CDC or of any obligations of Borrower as to any future transactions. Whenever the consent of the City and the CDC is required under this Agreement, the granting of such consent by the City and the CDC in any instance shall not constitute continuing consent in subsequent instances where such consent is required, and in all cases, such consent may be granted or withheld in the sole discretion of the City and the CDC. (18) List of Exhibits. Each of the following documents is attached as an exhibit to the Agreement and each in incorporated herein by this reference: Exhibit "A" - Legal Description of the Rental Housing Property Exhibit `B" - Program Budget Exhibit "C" - Promissory Note 17 Exhibit "D" - Deed of Trust (19) Effective Date of Agreement. This Agreement shall have no force or effect until it has been approved at a public meeting in the sole and absolute discretion of the City and the CDC and executed by the authorized officers of the City and the CDC and the authorized officers of the Borrower. The Effective Date of this Agreement shall be either the date of such approval by the City Council and the CDC Council of the CDC or such other date as may be expressly provided for in such approval of the City and the CDC of the Agreement by the City and the CDC. Signatures of Following page. 18 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF MARCH 22, 2011. CDC Rosemead Community Development Commission 4i:ow, "v Rio Hondo Community Development Corporation, a California public benefit corporation CITY OF RPSEMEAD By: ,Skv"en Ly Mayor and Chairman By: ff A red City Manager and Executive Director By DOP Its: f lees t 1�1 C Its: Approved As To Form: A )ved As To Fo achel Richman Burke, Williams & Sorensen, LLP City Attorney and Legal Counsel Counsel to the Borrower 19 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT 1 P M 20 -65 TH N 0 04' W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04'E TO A PT S 89 56'W FROM BEG TH N 89 56' E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -174 APN: 5281- 032 -033 EXHIBIT B" Residential Development Budget Rosemead RDA RHCDC l Owner Equity 197,914 - - 2 750 197,914 3,400 2,750 11,310 5,060 3,400 16,370 - 375 1,145 1,520 800 SUBTOTAL 800 800 - - Total Development Cost 449,840 449,840 227,086 201,314 50% 45% NOTES: 800 21,440 5% Construction Loan Amount Total Interest Rate 5.5% Months of Construction Development Residential 68.0% Construction Interest Cost Total Rosemead HOME Acquisition Costs: Purchase Pdce 425,000 425,000 227,086 Liens - Closing, Title & Recording Costs 2,750 - Extension payment - Other: - BUST OTAL- ACQUISITION &RELATED COSTS 427,750 427,750 227,086 Construction - Rehabilitation / Repairs 14,710 Bond Premium - Infrastructure Improvements - Hazardous Abate. & Monitoring 5,060 5,060 Construction Contingency (10 %) - - Sales Taxes - Other Construction Costs: - Other Construction Costs: - SUBTOTAL- REHABILITATION COSTS 19,770 19,770 - Development - Appraisal 375 375 Phase 1 - - LSP &Asbestos Testing 1,145 1,145 - Geotechnical Study Boundary & Topographic Survey Legal Developer Fee - - - Pro)ectManagement - - - Technical Assistance Other: Misc. Soft Costs - Other. Soft Cost Contnigency (3 %) - - - SUBTOTAL SOFT COST 1,520 1,520 - Other Development Real Estate Tax Insurance - - - Relocation - Bidding Costs - Pennies, Fees & Hookups 800 800 - ImpactiMitigatlon Fees - Development Period Utilities - - - Construction Loan Fees - - - Construction Interest - - - Other Loan Fees - - - LIHTC Fees Accounting /Audit Marketing/Leasing Expenses - - - Carrying Costs at Rent up - - - Operating Reserves Replacement Reserves Rosemead RDA RHCDC l Owner Equity 197,914 - - 2 750 197,914 3,400 2,750 11,310 5,060 3,400 16,370 - 375 1,145 1,520 800 SUBTOTAL 800 800 - - Total Development Cost 449,840 449,840 227,086 201,314 50% 45% NOTES: 800 21,440 5% Construction Loan Amount $ Interest Rate 5.5% Months of Construction 12 Average Outstanding Balance 68.0% Construction Interest $ - Use of Public Funds City of Budget Rosemead Rosemead Line Item (s) Amount HOME RDA 1. Property Acquisition $ 427,750 $ 227,086 $ 197,914 2. Rehabilitation / Repairs Z� 14,ily 4� a, Total Project Budget: $442,46 1227.08 8 $201,31 w ii c m Ez C C Q —= e �? co C �IL N o AF = �' d t d Av � s� C C 0—:) H oLL 0 :5 0 n c ° ° e q a� O Cr O. h �° d T � da a ayQ a ®�C d N_ O 7 7 £ O t O O . = z d c F (a 6-1 H P!i i vj� V> rs Ln Lo rn yen » N rn �tA SA aaa_ zzz I • c A ° g o� v Z ° c y 0 0 O O 'oE d c r> ui E 0 d z 0 d 42 z c A ° g o� v Z ° c y 0 0 O O T O N M z O_ O c � O y o O C Q � vc M B Q�EM!�Z ZLL a®'FSoJmi ZOKO'OW 6 ° •� 1WY W O 5 U' W h 2 iL d m vt Q O C + N N } it N C1 O m O cli v } Q y V P P ' i } �O N b O tnVDN E R P n E V O O m 4 b } m < N -•��10 n m m ' I -m O N ip b :8 Yi � i f tl 0 i O v d -- M y m N, N IA 1'fNN� •M CL P P P o P Iv v v r O 'I P W T O N M z O_ O c � O y o O C Q � vc M B Q�EM!�Z ZLL a®'FSoJmi ZOKO'OW 6 ° •� 1WY W O 5 U' W h 2 iL d EXHIBIT "C" PROMISSORY NOTE HOME INVESTMENT PARTNERSHIP PROGRAM PROMISSORY NOTE Secured by a Deed of Trust For Multiple Real Property Parcels Executed By Rio Hondo Community Development Corporation In Favor of the City of Rosemead, California And the Rosemead Community Development Commission [55 -YEAR TERM] Amount: $ Date: March 22, 2010 NOT TO EXCEED $201,314 Low /Mod Set -Aside Funding $227,086 HOME Funding $428,400 Total BORROWER(S) PROMISE TO REPAY FOR VALUE RECEIVED, the undersigned, Rio Hondo Community Development Corporation (hereinafter, "RHCDC "), a California public benefit corporation, whose address is 11401 Valley Boulevard, Suite 201, Rosemead, California, 91731 (hereafter referred to as "BORROWER "), hereby promises to pay to the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a public body (hereinafter, "CDC "), or its order, the sum total of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00), and to the CITY OF ROSEMEAD, a public body (hereinafter, "CITY'), or its order, the sum total of Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00), and in such manner as set forth in this promissory note and the Related Documents (defined below), in lawful money of the United States of America. A. DEFINITIONS The following definitions shall apply throughout this Note: 1. Propert y . "Property" shall collectively mean the real property parcel described in Exhibit "A" attached to this NOTE and made a part of hereof. This Property shall serve as security for the NOTE by way of a single deed of trust. 2. REGULATORY AGREEMENT "REGULATORY AGREEMENT" means that certain HOME Investment Partnership Funds Regulatory Agreement, dated as of the date hereof, by and between the City of Rosemead, the CDC, and Rio Hondo Community Development Corporation. 3. DEED OF TRUST The term "DEED OF TRUST" means that trust deed, dated as of the date hereof, evidencing the real property security for this Note with Borrower as Trustor, CITY and CDC as Beneficiaries, and United Title Company as Trustee. (The form of the DEED OF TRUST is attached hereto as Exhibit "B'�. Page 1 4. Principal Sum. The term "Principal Sum" means the principal indebtedness of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00) and Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00), for a sum total of Four Hundred Twenty -Eight Thousand Four Hundred Dollars ($428,400.00), evidenced by this NOTE, excluding any interest or other fees the CITY or the CDC may be owed pursuant to this NOTE and /or the Related Documents. 5. Loan The term "Loan" means the loan evidenced by this NOTE and granted to the BORROWER pursuant to the terms, conditions, restrictions and covenants of the REGULATORY AGREEMENT and the Related Documents. 6. Promissory Note "NOTE" means the instant promissory note. 7. Affordability Period The term "Affordability Period" means the fifty -five (55) year period commencing from the date the REGULATORY AGREEMENT is recorded. 8. Related Documents The term "Related Documents" means the CONVENANTS, CONDITIONS AND RESTRICTIONS, DEED OF TRUST, LOAN AGREEMENT and the REGULATORY AGREEMENT. TERMS A. INTEREST Interest shall accrue at a rate of ZERO PERCENT (0 %) per annum on all outstanding indebtedness evidenced by this NOTE. B. TIME AND MANNER OF PAYMENT The indebtedness evidenced by this NOTE shall be repaid by the BORROWER in the following manner: 1. BORROWER shall repay the sum loaned by the CITY in the amount of Two Hundred Twenty -Seven Thousand Eighty -Six Dollars ($227,086.00) at the end of the fifty- five -year term of this NOTE. In the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS as further described in Section E, the CITY is entitled to immediate repayment. 2. BORROWER shall only be required to pay back the sum loaned by the CDC in the amount of Two Hundred One Thousand Three Hundred Fourteen Dollars ($201,314.00) in the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS as further described in Section E. C. ASSIGNMENT BORROWER may not assign or otherwise transfer (collectively, an Page 2 "assignment ") all or any part of its interest or obligations in this NOTE without the prior written consent of the CITY and the CDC. Any request for assignment must be made to the CITY and the CDC in writing no less than sixty (60) days prior to the proposed assignment date. Any request for assignment must be accompanied by financial documentation demonstrating the creditworthiness and financial assets of the proposed assignee and the assignees ability to properly operate the Property. The decision to approve the assignment shall be at the sole discretion of the CITY and the CDC. D. SECURITY This NOTE is secured by a voluntarily subordinated DEED OF TRUST in the Property. E. DEFAULT UNDER NOTE, DEED OF TRUST, REGULATORY AGREEMENT CONVENANTS CONDITIONS AND RESTRICTIONS OR LOAN AGREEMENT Notwithstanding any other provisions of this NOTE, if default occurs in any of the covenants or agreements contained herein or in any of the Related Documents, the Principal Sum shall be immediately due and payable in full at the option of the CITY and the CDC. Failure by the CITY and the CDC to exercise its option to accelerate in the event of a default shall not constitute waiver of any other available right or remedy or of the right to exercise such option in the event of the same or any other default. Further, the occurrence of a default shall not relieve the BORROWER or any subsequent owner of the Property from adhering to the affordability restrictions contained herein or in the Related Documents. F. DUE ON SALE CITY and CDC may, at their option, declare immediately due and payable the Principal Sum and other all sums secured by the DEED OF TRUST upon the sale or transfer, without the CITY's and the CDC's prior written consent, of all or any part of the Property, or any interest in the Property. Except as set forth in the REGULATORY AGREEMENT a "sale or transfer" means the conveyance of Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest, lease option contact, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Property or by other method of conveyance of property interest. G. ATTORNEYS FEES If any default or dispute gives rise to litigation, the prevailing party in such litigation shall pay reasonable attorney fees and costs and expenses incurred by the non - prevailing in connection with any such default or any other action or other proceeding brought to enforce any of the provisions of this NOTE. The prevailing party's right to such fees shall be valued at customary and reasonable rates for private sector legal services. H. MODIFICATION: This NOTE may not be modified or amended, except by mutual agreement of the parties and then only if such agreement is made by written instrument expressing such intention. Any modification or amendment shall be attached to this Note and become a part hereof, but the failure to so attach any such Page 3 modification or amendment shall not affect the validity or binding nature of such modification or amendment. I. SEVERABILITY The covenants, terms and provisions of this NOTE are severable. Invalidation of any covenant, term or provision or any part thereof by law, judgment, or court order shall not affect any other covenants. J. PLACE OF REPAYMENT BORROWER shall make payment of all amounts due to CITY and the CDC under this NOTE to the City of Rosemead, 8838 E. Valley Boulevard, Rosemead, CA 91770, or such other address as CITY or the CDC may designate in writing to BORROWER. K. BORROWER'S WAIVERS BORROWER waives any rights to require the CITY or the CDC to do the following: (1) to demand payment of amounts due (known as a "presentment "); (2) to give notice that amounts due have not been paid (known as "notice of dishonor "); (3) to obtain an official certificate of nonpayment (known as a "protest "). L. GIVING OF NOTICES Any notice that must be given to the CITY and the CDC under this NOTE will be given by hand delivery or mailing it certified mail to the Rosemead Development Services Department at 8838 E. Valley Boulevard, Rosemead, CA 91770. Any notice that must be given to the BORROWER will be given by hand delivery or mailing it certified mail to the BORROWER at Rio Hondo Community Development Corporation, a California public benefit corporation, whose address is 11401 Valley Boulevard, Suite 201, El Monte, California, 91731. Each party agrees to provide the other with thirty (30) days written notice of any change of address. M. NON- RECOURSE PROVISION The indebtedness evidenced by this NOTE and secured by the DEED OF TRUST is a non - recourse obligation of the BORROWER. Neither the BORROWER nor any other party shall have any personal liability for repayment of the loan indebtedness. Except as otherwise provided in this NOTE or the Related Documents, the sole recourse of the CITY and the CDC for repayment of the principal and interest shall be the exercise of the CITY'S or the CDC's right to foreclose on the Property and all structures and improvements constructed thereon. The following shall apply notwithstanding the foregoing: (a) If the BORROWER executes, or has executed, a Project - related loan agreement, which provides that the BORROWER'S board shall be personally liable for repayment of the loan, such provisions shall be deemed to apply to the BORROWER with equal force. (b) Nothing in this Section shall be interpreted as relieving the BORROWER from all other duties imposed upon them under this NOTE or the Related Documents. Page 4 N. UNAPPROVED SALES OR TRANSFERS Except for the provisions regarding tenancy set forth in the REGULATORY AGREEMENT, if the BORROWER otherwise sells or transfers the Property, any portion thereof, or any structures and improvements constructed thereon without the prior written approval of the CITY and the CDC, the Principal Sum and all other amounts owing on the NOTE shall be immediately due and payable to the CITY and the CDC. The phrase "sells or transfers" means the conveyance of Property (or any portion thereof) or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest, lease option contract, or by sale, assignment or transfer or any beneficial interest in or to any land trust holding title to the Property or by other method of conveyance of a property interest. The phrase "sells or transfers" does not include a conveyance of an interest in the Property or any structures and improvements constructed thereon if such conveyance is authorized by the CITY and the CDC in writing. O. AUTHORIZATION BORROWER'S signatories to this NOTE warrant, represent and agree that they are duly authorized to bind BORROWER in the manner set forth in this NOTE. [Signatures are on the Next Page] Page 5 BY SIGNING BELOW, THE BORROWER ACCEPTS AND AGREES TO THE TERMS CONTAINED IN THIS NOTE. BORROWER RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California public benefit corporation r By: — Donna Duncan, President Rio Hondo Community Development Corporation, Date: By: J ,& - ' 60+ oaul 91 , Secretary Date: Page 6 LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (1 SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT 1 P M 20 -65 TH N 0 04'W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04'E TO A PT S 89 56'W FROM BEG TH N 89 56' E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -F4 APN: 5281 - 032 -033 Page 7 EXHIBIT `B' DEED OF TRUST Page 8 EIWH This page is part of your document - DO NOT DISCARD � OF lOS 1 � G 20 110571354 + Recorded /Filed in Official Records Recorder's Office, Los Angeles County, k f x California C A/ /FOftN� 04/20/11 AT 08:OOAM FEES: TAXES: OTHER: PAID: LEADSHEET IIIIII 11 00004053458 I VIII VIII VIII III II II III VIII VIII I III) VIII IIII IIII 003270940 SEQ: 04 DAR - Title Company (Hard Copy) IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIillllllllllllllllllllllllllllllllllllllllllllllllllllll THIS FORM IS NOT TO BE DUPLICATED T01 P 0039 0.00 0.00 0.00 0.00 F1 Recording Requested By WHEN RECORDED MAIL TO CITY OF ROSEMEAD Attention: Michelle Ramirez 8838 E. Valley Boulevard Rosemead, California 91770 r I U 1 t D - 1 11111111111 � (SPACE ABOVE THIS LINE RESERVED FOR DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (RIO HONDO CDC: RENTAL-HOUSING PROPERTY) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ( "Deed of Trust') is made as of March 22, 2010, by the Rio Hondo Community Development Corporation, a California public benefit corporation (hereinafter referred to as "Trustor "), whose address is 11401 Valley Boulevard, Suite 201, El Monte, California 91731, to United Title Company, whose address is 500 North Brand Boulevard, Suite 1150, Glendale, California 91203 (hereinafter referred to as "Trustee "), for the benefit of the City of Rosemead, a municipal corporation ( "City "), and the Rosemead Community Development Commission, a public entity ( "CDC" and, collectively with City, herein called `Beneficiaries "), whose address is 8838 E. Valley Boulevard, Rosemead, California 91770. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, and for the purpose of securing, in such priority as Beneficiaries may elect, each of the following: 1. The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in that certain Promissory Note (the "Promissory Note ") of even date herewith evidencing a loan (the "Loan ") in the principal amount not to exceed Four Hundred Twenty -Eight Thousand Four Hundred Dollars ($428,400), executed by Trustor, as maker, to the order of Beneficiaries and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Promissory Note or otherwise; and 2. The payment of all other sums, with interest thereon at the rate of interest, if any, provided for herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of Trust, the 2011 Affordable Housing Development Loan Agreement (the "Loan Agreement') dated as of March 22, 2010, by and between Trustor and the Beneficiaries or any other document or instrument heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note; and 3. The payment of such additional sums and interest thereof which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiaries, whether or not evidenced by a promissory note or notes which are secured by this Deed of Trust; and 4. The due, prompt and complete observance, performance and discharge of each and every obligation, covenant and agreement of Trustor contained in the Loan Agreement, the Promissory Note, this Deed of Trust or any other document or instrument heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note (collectively, the "Loan Documents "). TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain, sell, convey and assign to Trustee, in trust, with power of sale and right of entry and possession, and does grant to Beneficiaries a security interest for the benefit and security of Beneficiaries under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Property" whether now owned or held or hereafter acquired and wherever located, including any and all substitutions, replacements and additions to same: (a) That certain real property located in Los Angeles County, State of California, and more particularly described in Exhibit "A " , attached hereto and incorporated herein by this reference (the "Real Property "), together with all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including specifically but not limited to all appurtenant water, water rights and water shares or stock of Trustor, any and all general intangibles relating to the use and /or development of the real property, including development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, surveys and /or soil and substrata studies, and all other rights, privileges and appurtenances related to the said real property and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired; (b) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the Real Property (hereinafter referred to as the "Improvements "), including all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of the Improvements or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the Real Property as between the parties hereto and all persons claiming by, through or under such parties; (c) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof (other than personal property which is or at any time has become toxic waste, waste products or hazardous substances), including without limitation all installations, shelving, partitions, door -tops, vaults, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, drapery rods and brackets, screens, water heaters, wall coverings, carpeting, linoleum, tile, other floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of 2 R property, the specific enumerations herein not excluding the general, now or at any time hereafter placed upon or used in any way in connection with the ownership, operation or maintenance of the Real Property or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the Real Property and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, the Real Property shall not include (i) personal property which may be owned by lessees or other occupants of the Real Property; (ii) inventory of any lessee or occupant of the Real Property used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the Real Property only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or proper maintenance, of the Real Property; (d) All right, title and interest of Trustor, now owned or hereafter acquired in and to and lying within the right -of -way of any street, road, alley or public place, opened or proposed, vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the Real Property or now or hereafter used in connection with or now or hereafter belonging or appertaining to the Real Property; and all right, title and interest in the Trustor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the Real Property; (e) All judgments, awards of damages, settlements and any and all proceeds derived therefrom hereafter made as a result of or in lieu of any taking of the Real Property or any part thereof, interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the Real Property or the Improvements thereon, including change of grade of streets, curb cuts or other rights of access for any public or quasi - public use or purpose under any law; (f) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the Real Property, or arising from any lease or similar agreement pertaining thereto and all right, title and interest of Trustor in and to all leases of the Real Property now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Trustee or Beneficiaries may demand, sue for and recover such payments but shall not be required to do so; and (g) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims. 3 Trustor makes the foregoing grant to Trustee for the purposes herein set forth; provided, however, that if the Trustor shall pay or cause to be paid to the holder of the Promissory Note all amounts required to be paid under the provisions of the Promissory Note, this Deed of Trust and any other Loan Documents, and at the time and in the manner stipulated therein, and shall further pay or cause to be paid all other sums payable hereunder and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of the Trustee and Beneficiaries in the Property shall cease, determine and become void, and upon proof being given to the satisfaction of the Beneficiaries that all amounts due to be paid under the Promissory Note have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustee or Beneficiaries, and of any other sums as herein provided, the Trustee shall, upon receipt of the written request of the Beneficiaries, cancel, reconvey and discharge this Deed of Trust. TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. To protect the security of this Deed of Trust, Trustor agrees: 1. Trustor's Covenant of Payment Trustor shall perform all of its obligations under the Loan Agreement, the Promissory Note and this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay the Loan and all other debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 2. Trustor's Warranties of Title Trustor warrants to Beneficiaries that it is the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except (a) as otherwise provided in this section, (b) those approved in writing by Beneficiaries, and (c) the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiaries' prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiaries' interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 3. Trustor's Right to Contest Statutory Liens As used herein the words "mechanic's lien" and "materialman's lien" mean and include a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialman's lien against the Property or a stop notice against the Trustor or the Beneficiaries and /or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a California admitted surety acceptable to Beneficiaries in an amount not less than 125% of the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a court order to release said lien of record; (c) Trustor provides to Beneficiaries and pays for an endorsement to Beneficiaries' title insurance policy, in a form satisfactory to Beneficiaries, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Truster pays in full any judgment rendered for the lien claimant within ten (10) days following entry of any such judgment. 4. rRRESERVED —NO TEXT 5. Maintenance and Inspection of Improvements Trustor shall maintain the Improvements now or hereafter constituting a part of the Property in a good and reasonable condition and state of repair. Trustor shall not commit or suffer any waste respecting the Property; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof; and shall pay all fees or charges of any kind in connection therewith. 6. Construction and Repairs Trustor shall complete or restore promptly and in a good and workmanlike manner any Improvements that may now or hereafter be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7. Alterations No Improvements shall be structurally altered, removed or demolished without the Beneficiaries' prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiaries' prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiaries. 8. Compliance With Laws Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any Improvements constituting a part of the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenants Representations Warranties and Indemnity (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any Improvements constituting a part of the Property. (b) Truster shall, at its sole expense, comply and cause each tenant leasing space within any Improvements to comply with all applicable laws, regulations, codes and ordinances 5 relating to any Hazardous Materials or to any Environmental Activities (as defined below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for the Real Property and Improvements to assure and monitor continued compliance by Trustor and each tenant leasing space in the Improvements with all such laws, regulations, codes and ordinances. (c) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, certifying that the Real Property and Improvements and each part thereof is not then being used nor has it ever been used for any Environmental Activities. Beneficiaries reserve the right, in their reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and /or to conduct its own investigation of the Real Property and Improvements, or any part thereof, for Hazardous Materials. Trustor hereby grants to Beneficiaries, their agents, employees, consultants and contractors the right to enter upon the Real Property and Improvements to perform such tests as are reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiaries of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiaries a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiaries a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiaries may reasonably request. The plan shall be subject to Beneficiaries' written approval, which approval may be granted or withheld in Beneficiaries' sole but reasonable discretion. Beneficiaries shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiaries. If Beneficiaries disapprove the plan, Beneficiaries' notice to Trustor of such disapproval shall include a brief explanation of the reasons therefor. Trustor shall submit to Beneficiaries a revised final written environmental plan that remedies the defects identified by Beneficiaries as reasons for Beneficiaries' disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiaries within said thirty (30) day period, or if such revised plan is submitted to Beneficiaries and Beneficiaries disapproves said plan, such failure or disapproval shall, at Beneficiaries' option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiaries do not notify Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiaries of Beneficiaries' failure to respond, at which time Beneficiaries shall have an additional forty -five (45) days after receipt of such notice from Trustor to notify Trustor of their approval or disapproval of the final plan within said additional forty -five (45) day period. If Beneficiaries fail to notify Trustor of their disapproval or approval of said plan within said forty -five (45) day period the plan shall be deemed approved. Once any such plan is approved no in writing or deemed approved by Beneficiaries, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiaries, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiaries with respect to the approval or disapproval of the environmental plan set forth herein and the actions of Beneficiaries pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiaries a right to manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Real Property or the Improvements. Beneficiaries reserve the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Real Property and Improvements. Trustor hereby grants to Beneficiaries, their agent, employees, consultants and contractors the right to enter upon the Real Property and Improvements and to perform such tests as Beneficiaries deem are necessary to conduct such a review and/or investigation. Beneficiaries shall hold in confidence any report delivered by Trustor to Beneficiaries pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiaries to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiaries, (c) regulatory officials having jurisdiction over Beneficiaries who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiaries' or any participant's interests hereunder. "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by- products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Enviroornental Response, Compensation and Liability Act of 1980 ( "CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfand Amendments and Reauthorization Act of 1986 ( "SARA "), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or 7 b (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. "Environmental Laws" as used herein shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. "Environmental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Real Property or the Improvements. (f) Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiaries' choice), Beneficiaries, and each of them and their respective successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee ", and collecfively,.the "Indemnitees ") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims ") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters;" but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiaries: (i) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Real Property or Improvements or on, in, under or affecting all or any portion of any property adjacent or proximate to the Real Property or Improvements, if such Hazardous Materials originated or allegedly originated on or from the Real Property or Improvements; (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Real Property or Improvements or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Real Property or Improvements or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Real Property or Improvements including, without limitation, all Environmental Laws; (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any $ E of the Environmental Matters described herein in connection with the Real Property or Improvements or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Real Property or Improvements or any other property adjacent or proximate to the Real Property or Improvements , if such Hazardous Materials originated or allegedly originated on or from the Real Property or Improvements ; (vi) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Real Property or Improvements of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Real Property or Improvements or any portion thereof, (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Real Property or Improvements or into the air, any body of water, any other public domain or any property adjacent or proximate to the Real Property or Improvements ; (viii) Any failure of any Hazardous Materials generated or moved from the Real Property or Improvements to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust. The indemnity contained herein shall survive the expiration or termination of the Loan Documents and the repayment of the Loan. (g) Trustor hereby represents and warrants as follows: (i) Neither the Real Property nor the Improvements, or any part of either of them, has been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Real Property and Improvements , and each part thereof, are in compliance with all Environmental Laws; (iii) Trustor has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims ") pending or threatened against Trustor or any previous owner or user of the Real Property or Improvements (and relating to Trustor's and/or such previous owner's or user's ownership of the Real Property or Improvements), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Trustor has not received any written notice (i) pursuant to which the Real Property or Improvements have been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 etseq., or any regulation adopted in accordance therewith; (ii) of a hearing at which the Real Property or Improvements will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Real Property or Improvements that could cause the Real Property or Improvements or any part thereof to be designated as "border zone property." The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 10. Insurance 10.1. Casualty Insurance Trustor shall at all times keep the Real Property and Improvements insured for the benefit of Trustee and Beneficiaries as follows, despite governmental requirements that may detrimentally affect Trustor's ability to obtain or may materially increase the cost of such insurance coverage: 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Real Property and Improvements, with a deductible amount not to exceed an amount satisfactory to Beneficiaries; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiaries; 10.1.3. Against damage or loss by flood, if the Real Property and Improvements are located in an area identified by the Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiaries may require; 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiaries may require; 10.1.5. During any alteration, construction, or replacement of the Improvements, or any substantial portion thereof, a Builder's All Risk policy with extended coverage with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the Improvements with provision for replacement with the coverage described 10 lapsed coverage, completed portion Improvements and of Im in Section 10.1.5, without gaps or p co rage, for any co p p p workers' compensation, in statutory amounts; and 10.1.6. Against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiaries, if such insurance is required by Beneficiaries in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Real Property and Improvements are located. 10.2. Liability Insurance Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiaries against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Real Property or Improvements, or any street, drive, sidewalk, curb, or passageway adjacent to them, in standard form and with such insurance company or companies and in an amount of at least $2,000,000 combined single limit, or such greater amount as Beneficiaries may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such coverage or its amount shall in no way limit such indemnification). 10.3. Other Insurance Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Real Property and Improvements, as (a) may be required by the terms of any construction contract for any improvements on the Real Property and Improvements or by any governmental authority, other than Beneficiaries or (b) may be reasonably required by Beneficiaries from time to time. 10.4. Form of Policies All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiaries from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiaries shall approve in Beneficiaries' sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiaries, each insurer shall have a Best Insurance Guide, current edition, rating of at least A(viii), or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiaries; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name Beneficiaries and Trustee as insureds; and (d) include such deductibles as Beneficiaries may approve. If a policy required under this paragraph contains a co- insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiaries. 10.5. Duplicate Originals or Certificates Duplicate original policies evidencing the insurance required under this Section 10 and any additional insurance that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiaries and, in addition, Trustor shall deliver to Beneficiaries (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to 11 Beneficiaries of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiaries under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiaries' reasonable judgment, is sufficient to allow Beneficiaries to ascertain whether such policies comply with the requirements of this Section 10. 10.6. Increased Coverage If Beneficiaries determine that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiaries, procure such additional coverage as Beneficiaries may require in Beneficiaries' sole and absolute discretion. 10.7. No Separate Insurance Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section 10, unless endorsed in favor of Trustee and Beneficiaries, as required by this Section 10 and otherwise approved by Beneficiaries in all respects. 10.8. Transfer of Title In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Trustor's obligation to repay the Loan, all right, title, and interest of Trustor in and to all insurance policies required under this Section 10 or otherwise then in force with respect to the Real Property and Improvements and all proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 10.9. Replacement Cost For purposes of this Section 10, the term "full insurable value" means the actual cost of replacing the Real Property and /or Improvements in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiaries' request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiaries. Trustor shall pay the cost of such appraisal. 10.10. Approval Not Warranty No approval by Beneficiaries of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiaries as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11. Beneficiaries' Right To Obtain Insurance Trustor shall deliver to Beneficiaries original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiaries or if any such policy is canceled, whether or not Beneficiaries have the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiaries, without notice to or demand on Trustor, may (but are not obligated to) obtain such insurance insuring only Beneficiaries and Trustee with such company as Beneficiaries may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by 12. r I Trustor. Trustor acknowledges that, if Beneficiaries obtain insurance, it is for the sole benefit of Beneficiaries and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiaries to protect Trustor in any way. 10.12. Duty To Restore After Casualty If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Real Property and/or Improvements , Trustor shall immediately give notice of such loss or damage to Beneficiaries and, if Beneficiaries so instruct, shall promptly, at Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repair, replace, and rebuild the Real Property and/or Improvements as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction. 11. Assignment of Insurance and Condemnation Proceeds Should the Property or any part or appurtenance thereof or right or interest therein be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiaries or Trustee may, at their option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief therefor. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Real Property and Improvements, are hereby assigned to Beneficiaries, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiaries any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiaries and all refunds or rebates made of taxes or assessments on the Property, and Beneficiaries may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiaries shall be deemed to be held in trust and Beneficiaries may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such farther assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiaries or Trustee may require. 12. Use of Insurance Proceeds After any damage by casualty to the Real Property and/or Improvements, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiaries generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Real Property and/or Improvements . Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiaries shall make available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: 13 (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds ") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (i) There exists no default under the Loan Agreement, this Deed of Trust or the Promissory Note at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiaries of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiaries of proof reasonably satisfactory to Beneficiaries that there exists and will continue to exist, until the Real Property and /or Improvements are reasonably expected to be restored and fully occupied, a source of funds sufficient to pay the Loan as and when due. Such computation shall include Beneficiaries' estimate of the amount necessary to pay all of Trustor's operating expenses and pay all of the sums due on the Loan over the projected period of reconstruction, and Beneficiaries may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Loan; (iv) Receipt by Beneficiaries from Trustor of sufficient cash funds to cover one hundred percent (100 %) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiaries in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiaries with said amount and any interest earned thereon shall be released to Beneficiaries, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiaries. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Loan; (v) Receipt by Beneficiaries of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiaries in writing stating that the work described in the Trustor's certificate is adequate to restore the Real Property and Improvements to substantially the same 14 size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (vi) Such additional conditions as may reasonably be imposed by Beneficiaries to provide assurance that the Proceeds will be used to restore the Real Property and Improvements to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiaries' prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiaries shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiaries' discretion, be subject to reasonable holdbacks required by Beneficiaries, not exceeding ten percent (10 %) of the total estimated cost of completion and which will be released upon lien -free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiaries' written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiaries in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiaries in connection with its construction loans, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiaries. Trustor shall, during the progress of the work, also submit to the Beneficiaries, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiaries furnished by an architect or engineer approved by Beneficiaries in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and (c) After completion of the restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Loan Agreement, this Deed of Trust or the Promissory Note, Beneficiaries shall pay to Trustor (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiaries upon delivery to Beneficiaries of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Real Property and Improvements; (iii) a certificate executed by an architect or engineer approved by Beneficiaries confirming that the Real Property and Improvements have been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Real Property and Improvements for its intended purposes and use. 15 I£ (i) any of the conditions in subparagraph 12(b), above, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note; or (ii) Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) Trustor is otherwise in default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements set forth therein or herein, then in any such event Beneficiaries may, at their option, apply the Proceeds and any deposits made by Truster hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiaries under the Loan and all other debts of Trustor to Beneficiaries are discharged, Beneficiaries shall not have the right to require the Real Property and Improvements to be repaired under the terms of this Deed of Trust, but Beneficiaries' rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiaries consent in writing thereto, which consent may be withheld by Beneficiaries in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Trustor to subject the Real Property and Improvements to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph 12. In any event in which the Beneficiaries are not otherwise obligated to authorize the insurance proceeds to be applied to the restoration of the Real Property and Improvements as hereinabove described and, at the option of Beneficiaries, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiaries, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of Trust or the obligation of the Trustor or any other person for payment- of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards Should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiaries shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees to pay Beneficiaries' costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiaries 16 toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiaries, renders or will render the Property not economically viable or which substantially impairs Beneficiaries' security or lessens to any extent the value, marketability or intended use of the Property, Beneficiaries may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiaries may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiaries or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Loan plus all other sums due to Beneficiaries from Trustor shall be paid to Trustor or Trustor's assignee. 14. Property Taxes and Assessments Trustor shall pay in full on or before the due date thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiaries with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts Truster agrees to consent to inclusion of the Real Property and Improvements in any local improvement or special assessment district and to the imposition of any special or local improvement assessment against the Real Property and Improvements , upon the Beneficiaries' written request. 16. Mortgage Taxes In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiaries or any payments secured hereby, Trustor shall bear and pay the full amount of such taxes. 17. Special Assessment and Insurance Reserves Truster shall, at the request of the Beneficiaries, pay to Beneficiaries equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiaries next to become due, in addition to any other periodic payment or performances owed by Truster under the Loan Agreement, the Promissory Note or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiaries will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the additional payment to be made on account of assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiaries deem necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiaries of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiaries on account of assessments or insurance premiums may be commingled and invested with Beneficiaries' own funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiaries shall not exercise the rights granted in this paragraph so long as all of the following conditions are met: 17 (a) There is no other default under the Loan Agreement, this Deed of Trust or the Promissory Note; and (b) Trustor pays all assessments and insurance premiums prior to delinquency. Upon Trustor's failure to comply with either of the conditions (a) and (b), above, Beneficiaries may, at their option, then or thereafter exercised, require Trustor to pay the additional sums described in this paragraph. 18. Trustor's Right to Contest Taxes Trustor shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 19. Report of Real Estate Transaction Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiaries, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this paragraph are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiaries. 20. Leases/Rental Agreements With respect to any leases and /or rental agreements currently or hereafter relating to any portion of the Real Property, Trustor agrees that: (a) Trustor shall take all reasonable measures to cause each dwelling unit on the Real Property to be made available for rent and occupancy by a "low- or moderate - income household" as this term is defined in Health and Safety Code Section 50093. For purposes of this subparagraph (a), compliance by the Trustor of the applicable provisions of the HOME Regulatory Agreement of even date herewith relating to the rental and occupancy of each such dwelling unit on the Real Property shall be deemed to be compliance with the provisions of this subparagraph (a); (b) Each lease or rental agreement for each dwelling unit on the Real Property shall comply with the covenants of the Trustor under the Loan Agreement, this Deed of Trust the Promissory Note and the HOME Regulatory Agreement of even date herewith; -1 ! �F f (c) Trustor shall fully comply with all of its obligations under all leases or rental agreements on the Real Property so that the same shall not become in default and shall do all that is necessary to preserve the same in force; (d) Trustor shall not permit an assignment of any leases, or any subletting thereunder; and (e) Beneficiaries and their successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interests following any foreclosure or trustee's sale hereunder. 21. Collateral Assignment of Leases and Rents to Beneficiaries Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which, it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiaries confer upon Truster a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiaries upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiaries may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiaries upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Loan Agreement or the Promissory Note, and Beneficiaries shall, in their sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiaries shall determine. In the event the Beneficiaries exercise or are entitled to exercise any of their rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Loan Agreement, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiaries shall have, and are hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Truster in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiaries in writing, Beneficiaries' exercise of any of the rights provided in this paragraph shall preclude Truster from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiaries any duty to produce rents from the Property, and such assignment shall not cause Beneficiaries to be a "mortgagee in IM possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiaries in any separate assignment of leases and rents. 22. Impairment of Security Trustor shall not, without first obtaining Beneficiaries' written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiaries' lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiaries, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non - conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiaries or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. Trustor, following mutual negotiations with Beneficiaries, has waived and does hereby waive any immunity to such liability to Beneficiaries under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiaries' rights against Trustor. Should Beneficiaries elect to appear in or defend any such action or proceeding or be made a party to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiaries and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay costs of suit, cost of evidence of title expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiaries to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. 24. Due on Sale and Sale of Premises or Additional Financing Not Permitted Trustor specifically agrees that: (a) In order to induce Beneficiaries to make the loan secured hereby, Trustor agrees that if the Real Property or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered with financing other than that secured 20 � r hereby or otherwise alienated by Trustor whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or without the prior written consent of Beneficiaries, then Beneficiaries, at their option, may declare the Promissory Note secured hereby and all other obligations hereunder to be forthwith due and payable. Except as shall be otherwise specifically provided herein, any (a) change in the legal or equitable ownership of the Real Property whether or not of record, or (b) change in the form of entity or ownership (including the hypothecation or encumbrance thereof) of any ownership interest in Trustor shall be deemed a transfer of an interest in the Real Property ; provided, however, that any transfer of the Real Property or any interest therein to an entity which controls, is controlled by, or is under common control with Trustor shall not be considered a transfer hereunder. In connection herewith, the financial stability and managerial and operational ability of Trustor is a substantial and material consideration to Beneficiaries in their agreement to make the loan to Trustor secured hereby. The transfer of an interest in the Real Property may materially alter and reduce Beneficiaries' security for the indebtedness secured hereby. Moreover, Beneficiaries have agreed to make its loan based upon the presumed value of the Real Property and the rents and profits thereof. Therefore, it will be a diminution of Beneficiaries' security if junior financing, except as shall be permitted by Beneficiaries, or if other liens or encumbrances should attach to the Real Property. (b) Trustor may request Beneficiaries to approve a sale or transfer of the Real Property to a party who would become the legal and equitable owner of the real property described in Exhibit "A" and would assume any and all obligations of Trustor under the Loan Documents (the "Purchaser "). Beneficiaries shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Beneficiaries may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the Real Property, or any part thereof, becomes vested in a person or persons other than Trustor, the Beneficiaries may deal with such successor or successors in interest with reference to the Note or this Deed of Trust in the same manner as with Trustor, without in any way releasing, discharging or otherwise affecting the liability of Trustor under the Promissory Note, this Deed of Trust or the other Loan Documents. No sale of Trustor's interest in the Real Property, no forbearance on the part of Beneficiaries, no extension of the time for the payment of the Deed of Trust indebtedness or any change in the terms thereof consented to by Beneficiaries shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of the Trustor herein, either in whole or in part. Any deed conveying the Real Property, or any part thereof, shall provide that the grantee thereunder assume all of Trustor's obligations under the Note, this Deed of Trust and all other Loan Documents. In the event such deed shall not contain such assumption, Beneficiaries shall have all rights reserved to it hereunder in the event of a default or if Beneficiaries shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the Real Property or such portion thereof subject to this Deed of Trust. Nothing contained in this section shall be construed to waive the restrictions against the transfer of the Real Property contained in paragraph 24(a). 25. Further Encumbrances Trustor acknowledges that Beneficiaries relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not 21 1 �l limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiaries in bankruptcy; the risks to Beneficiaries in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiaries' rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiaries' option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiaries' requirements ofTrustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Truster's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiaries to make the Loan secured by this Deed of Trust, and with the knowledge that Beneficiaries will materially rely upon this paragraph in so doing, Trustor covenants not to further encumber the Property without first receiving Beneficiaries' express written consent in each instance, which consent may be withheld by Beneficiaries in their sole discretion. A breach of this covenant shall constitute a default under the Loan Agreement and this Deed of Trust, and Beneficiaries may exercise all remedies available to Beneficiaries under the Loan Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgage, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiaries shall encumber the Property. 26. RESERVED —NO TEXT 27. Event of Default An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfy any performance or payment obligation required under the HOME Regulatory Agreement, the subordinate deed of trust referenced in paragraph 25 of this Deed of Trust [[IS THERE A SUBORDINATE DEED OF TRUST ? ?]], the Loan Agreement or the Promissory Note when due; (b) Failure of Trustor to properly perform its obligations under this Deed of Trust, the Loan Agreement or the Promissory Note by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty (3 0) days from the date of such notice, and shall be determined by Beneficiaries in their sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice may be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice; (c) The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by Beneficiaries) portion of the Property; 22 (d) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is herein called the "Bankruptcy Code "), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (e) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the Property, of any other real property of Truster, of any other significant asset of Truster, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (f) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Truster or any other person under this Deed of Trust or as security for performance or payment of the Loan, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets; (g) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (h) The determination by Beneficiaries that any representation, warranty or statement contained in this Deed of Trust or the Loan Agreement or in any other writing delivered to Beneficiaries in connection with the Loan or the Promissory Note was incomplete, untrue or misleading in any material respect as of the date made; (i) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiaries the payment of the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiaries' interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Loan Agreement or the Promissory Note or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiaries by reason of their ownership of this Deed of Trust, the Loan Agreement or the Promissory Note and, in such event, Truster, after demand by Beneficiaries, does not pay such taxes or assessments or reimburse Beneficiaries therefor or, 23 in the opinion of counsel for Beneficiaries, it might be unlawful to require Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law; 0) The occurrence of a default by Trustor under any of the contracts and agreements assigned to Beneficiaries under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other party thereto; and (k) Truster acknowledges and agrees that all material non - monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiaries shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non - monetary default. 28. Rights and Remedies on Default Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiaries may exercise any one or more of the following rights and remedies: (a) Loan Agreement Beneficiaries may exercise any right or remedy provided for in the Loan Agreement or the Promissory Note; (b) Acceleration Beneficiaries may declare the Loan and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) Foreclosure Rights Beneficiaries may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a 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 in case of foreclosure by exercise of the power of sale herein. Should Beneficiaries elect to foreclose by exercise of the power of sale herein, Beneficiaries shall also deposit with. Trustee this Deed of Trust, the documents evidencing the Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale at public auction to the highest bidder upon any terms and conditions specified by Beneficiaries and permitted by applicable law. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness 24 r thereof. Any person, including Truster, Trustee or Beneficiaries, may purchase all or any portion of the Property, as applicable, at sale. (d) Right to Rescind Beneficiaries, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiaries of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiaries to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Loan Agreement and /or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) UCC Remedies Beneficiaries shall have all the rights and remedies under this Deed of Trust as a secured party under the California Uniform Commercial Code, including, without limitation, Section 9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiaries at a place to be designated by Beneficiaries that is reasonably convenient to both parties. Upon repossession, Beneficiaries may propose to retain the collateral in partial satisfaction of the Loan or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiaries dispose of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (ii) to the reasonable attorneys' fees and legal expenses incurred by Beneficiaries; and (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. (f) Remedial Advances Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiaries or Trustee, without obligation so to do and without demand upon Trustor and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiaries or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding 25 f purporting to affect the security hereof or the rights or powers of Beneficiaries or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiaries shall be subrogated to the rights and lien interests of any person who is paid by Beneficiaries pursuant to the terms of this paragraph, Trustor shall repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiaries, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment thereof shall be secured hereby. (g) Summary Possession Beneficiaries may, at their option, either in person or by agent, employee or court- appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (h) Collection of Rents Beneficiaries may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiaries, regardless of whether Beneficiaries has taken possession of the Property. If any rents are collected by Beneficiaries, then Trustor hereby irrevocably designates Beneficiaries as Trustor's attorney - in -fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Beneficiaries in response to Beneficiaries' demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiaries may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) Beneficiaries' Enforcement. of Leases Beneficiaries are hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court- appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Loan Agreement. Trustor hereby grants to Beneficiaries full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Loan Agreement and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability f►17 3� ! of Trustor to Beneficiaries, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any principal and interest payments due from Trustor to Beneficiaries under the Loan Agreement, the Promissory Note and this Deed of Trust, all in such order as Beneficiaries may determine. Beneficiaries shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiaries nor shall it operate to make Beneficiaries liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiaries after taking possession of the Property hereunder. 0) Beneficiaries' Enforcement of Contracts Beneficiaries shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiaries or, at Beneficiaries' option, in the name of Trustor, in the event any architect, engineer, contractor or other parry breaches their respective contract or contracts, regardless of whether Beneficiaries acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiaries as its attorney -in -fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiaries do not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiaries be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiaries in writing, following any default by Trustor under the Loan Agreement or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiaries in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiaries under the Loan Agreement and Promissory Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Loan. (k) Appointment of Receiver Beneficiaries have the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Loan. The receiver may serve without bond, if permitted by law. 27 Beneficiaries' right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. Employment by Beneficiaries shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiaries may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiaries' option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiaries deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiaries or otherwise, as Beneficiaries may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. (1) Specific Enforcement Beneficiaries may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection therewith. (m) General Creditors - Remedies Beneficiaries shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof. 29. Application of Sale Proceeds After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiaries and any other person or persons legally entitled thereto. 30. Remedies Cumulative No remedy herein conferred upon or reserved to Trustee or Beneficiaries is intended to be exclusive of any other remedy provided herein or under the Loan Agreement or the Promissory Note, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Loan, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiaries or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiaries and either of them may pursue inconsistent remedies. MM 30 31. No Waiver No waiver of any default or failure or delay to exercise any right or remedy by Beneficiaries shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other, occurrence. 32. Marshaling In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one parcel. Neither Trustee nor Beneficiaries shall be required to marshal Trustor's assets. 33. SUBMISSION TO JURISDICTION (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARIES TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARIES OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 34. Trustor's Indemnification Trustor agrees to indemnify and hold harmless Trustee and Beneficiaries from and against any and all losses, liabilities, penalties, claims, charges, costs and expenses (including attorneys' fees and disbursements) (the "Losses ") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiaries by reason or on account of, or in connection with: (a) any default by Trustor hereunder or under the Loan Agreement; (b) Trustee's 29 it n and/or Beneficiaries' good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties hereunder or under any other documents to which Trustor is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent thereto, except for the willful misconduct or gross negligence of the indemnified person. Any amount payable to Trustee, Beneficiaries or counsel for Beneficiaries under this paragraph shall be due and payable within ten (10) days after demand therefor and receipt by Trustor of a statement from Trustee, Beneficiaries and/or counsel for Beneficiaries setting forth in reasonable detail the amount claimed and the basis therefor, and such amounts shall bear interest at the rate of 10% per annum from and after the date such amounts are paid by Beneficiaries, Trustee or counsel for Beneficiaries, until paid in full by Trustor. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiaries that is subject to the indemnity set forth in this paragraph, Trustor shall resist or defend against the same, if necessary, in the name of Trustee and /or Beneficiaries, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiaries. Notwithstanding the foregoing, Trustee and Beneficiaries, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiaries for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's payment of the Loan secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. Attorneys' Fees; Costs Trustor agrees to reimburse Beneficiaries for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiaries incur in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Loan Agreement or the Promissory Note, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiaries prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work -out, compromise, settlement or satisfaction of the debt secured hereby or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Loan Agreement or the Promissory Note. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 36. Acceptance by Trustee Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 30 3 v 37. Successor Trustee Trustee may resign by an instrument in writing addressed to Beneficiaries, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Benefrciaries.and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiaries shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee herein named or any substitute or successor trustee, then Beneficiaries shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiaries and the recordation of such writing in the office where this Deed of Trust is recorded, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiaries shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiaries by an officer of Beneficiaries, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of Beneficiaries. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but, nevertheless, upon the written request of Beneficiaries or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee hereunder to said successor or substitute trustee. All references herein to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and confirms any and all acts that Trustee herein named or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue hereof. 38. Reconvgyance Upon written request of Beneficiaries, stating that all performances and sums secured hereby have been satisfied and paid, and upon surrender of this Deed of Trust 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 any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39. No Releases The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Loan Agreement or any other obligation secured hereby, except in the manner herein specified. Without affecting the liability of any other person for the payment and performance of any obligation herein mentioned (including Trustor should it convey said Property) and without affecting the lien or priority hereof upon any Property not released, Beneficiaries may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, grant other indulgences, make fixture or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of 31 j7 J� Y f F the said Property described herein, take or release any other security or make compositions or other arrangements with debtors. Beneficiaries may also accept additional security, either concurrently herewith or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale hereunder. 40. Beneficiaries Consent At any time, upon written request of Trustor, Trustor's payment of Beneficiaries' fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person for the payment of the indebtedness, Beneficiaries may: (a) consent to the making of any map or plat of said Property; (b) join in granting any easement or creating any restriction thereon, (c) join in any other agreement affecting this Deed of Trust or the lien or charge thereof, and (d) reconvey, without warranty, all or any part of the Property. 41. jRESERVED NO TEXT] 42. Further Assurances Trustor, from time to time, within fifteen (15) days after request by Beneficiaries, shall execute, acknowledge and deliver to Beneficiaries, such chattel mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiaries, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiaries, is essential to the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiaries, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiaries may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiaries on demand all reasonable costs and expenses incurred by Beneficiaries in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiaries, nor the failure of Beneficiaries to make such request shall be construed as a release of such Property, or any part thereof, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiaries are cumulative and given as additional security. 43. Time of Performance Time is of the essence hereof in connection with all obligations of the Trustor herein and under the Loan Agreement and Promissory Note. 44. Notices The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth. Any notices to be given to Trustor by Beneficiaries hereunder shall be sufficient, if personally delivered or mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address that Trustor has requested in writing to Beneficiaries. Anytime period provided in the giving of any notice hereunder shall commence upon the date such notice is delivered or deposited with the United 32 States Postal Service for delivery by regular first -class postage pre -paid mail, as officially recorded on the certified mail receipt. 45. Beneficiaries' Right to Inspect Beneficiaries and their agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiaries' interest and to inspect the Property. 46. Reports and Statements Trustor shall deliver to Beneficiaries, within ninety (90) days after the end of each of Truster's fiscal years, and within twenty (20) days after Beneficiaries' request, following an Event of Default, reasonably detailed operating statements and occupancy reports in a form satisfactory to Beneficiaries covering the Property, both certified as correct by Trustor. At Beneficiaries' option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Truster's expense. If Beneficiaries so request, such statements shall specify, in addition to other information requested by Beneficiaries, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terms of the respective leases or the rental arrangements. Truster shall permit Beneficiaries or their representative to examine all books and records pertaining to the Property, and shall deliver to Beneficiaries all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any tenants of the Property, and rental, income; and expense statements, audits, and tax returns relating to the Property. 47. Assignment by Beneficiaries; Participation Beneficiaries may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Truster's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiaries may make available to any person all credit and financial data furnished or to be furnished to Beneficiaries by Trustor. Truster agrees to provide to the person designated by Beneficiaries any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Truster may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiaries, under the terms of this Deed of Trust. 48. jRESERVED NO TEXT] 49. Legal Relationships The relationship between Beneficiaries and Truster is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiaries. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by the execution of this Deed of Trust, other than by the assignment by Beneficiaries of this Deed of Trust. 50. (RESERVED NO TEXT] 33 51. Modification This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by all of the parties hereto. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiaries and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiaries' delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiaries' failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor's breach or default. 52. Successors Subject to the prohibitions against Trustor's assignments herein, this Deed of Trust shall inure to the benefit of and bind all of the parties, their successors, estates, heirs, personal representatives and assigns. 53. Partial Invalidity If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 54. Mutual Negotiation Beneficiaries and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 55. Paragraph Headings The paragraph headings are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 56. Applicable Law This Deed of Trust and the rights of the parties hereunder shall be governed by, construed and enforced in accordance with the laws of the State of California. 57. Entire Agreement This Deed of Trust, including any exhibits or addenda, contains the entire agreement of the parties with respect to the subject matter hereof 58. Counterparts This Deed of Trust may be executed in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 59. Fixture Filing and Recording This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 34 60. Survival of Representations and Warranties All ofTrustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Loan secured hereby, until performance of all obligations set forth in the Loan Agreement and in the Promissory Note or, alternatively, full repayment of the Loan and release and reconveyance of this Deed of Trust. IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust and Assignment of Rents as of the day and year first above written. HaiI.Y 6314 Rio Hondo Community Development Corporation, a California public benefit corporation 1 � 1 In [NOTARY JURAT ATTACHED] 35 J 71 CALIFORNIA ALL- PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA } } S.S. COUNTY OF Los Angeles } On March 31, 2011 before me, Maria Raygoza, notary public, personally appeared Donna L. Duncan, President, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person 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. v ,� MARIA RAYGOZA WITNESS my hand and official seal. COMM. * r- ; .. NOTARY PUPLIC - CALIFORNIA LOS ANGEI.E.S COUNTY l PAy Comm. Expires January I, 2013 Signature V C his area for official notarial seal. TO ONLY BE ATTACHED TO DEED OF TRUST DATED MARCH 22, 2011 i EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 8628 Landis View Lane (I SFD unit on lot) Legal Description: TRACT NO 701 LOT COM S 89 56' FT FROM SW COR OF LOT I P M 20 -65 TH N 0 04'W TO S LINE OF LANDISVIEW LANE TH W THEREON 56 FT TH S 0 04' E TO A PT S 89 56' W FROM BEG TH N 89 56' E 56 FT TO LOT 49 City: Rosemead County: Los Angeles State: California Zip Code: 91770 -3724 Census Tract: 4824.02 Map Reference: 46 -174 APN: 5281- 032 -033 36 EXHIBIT A c rtuiied Order No.: 7101101127 Parcel 1: That portion of Lot 45, Tract No. 701, in the City of Rosemead, County of Los Angeles, State of California, as shown by map on file in book 16, pages 110 and 111 of maps, in the office of the county recorder of said county., lying southerly of a line that is parallel to the north line of said Lot and passing through a point in the easterly line of said lot, distant northerly thereon 172.86 feet from the southeasterly corner of said lot. Except that portion of said land lying westerly of a line that is parallel with and distant 262.00 feet easterly measured at right angles, from the most westerly line and the southerly prolongation thereof, of said lot. Also except therefrom that portion thereof lying easterly of a line that is parallel with and distant 318.00 feet easterly measured at right angles, from the most westerly line and the southerly prolongation thereof, of said Lot. Also, except therefrom that portion conveyed to the State of California by deed recorded October 7, 1966 as instrument no. 458, in Book D3448, page 625, Official Records. Parcel 2: That portion of Lot 49 of Tract No. 701, in the City of Rosemead, County of Los Angeles, State of California, as shown by map on file in book 16, pages 110 and 111 of maps, in the office of the county recorder of said county described as follows: Beginning at a point in the northerly line of said lot, said point being the intersection thereof with the southerly prolongation of the westerly line of that certain parcel of land acquired by the State of California by deed recorded in Book D3448 Page 625 of Official Records in said office; thence along said northerly line easterly to the southerly prolongation of the easterly line of said certain parcel; thence southerly along last said southerly prolongation to a line that is parallel with a distant southerly 8.54 feet measured at right angles from said northerly line; thence along said parallel line westerly to first said southerly prolongation; thence northerly along last said prolongation of said westerly line to the point of beginning. 0 0 CITY OF ROSEMEAD FISCAL YEAR 2011 -2012 OPERATING EXPENSES AGREEMENT FOR COMMUNITY HOUSING DEVELOPMENT ORGANIZATION BY AND BETWEEN THE CITY OF ROSEMEAD, A California Municipal Corporation -AND - THE RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California Public Benefit Corporation THIS OPERATING EXPENSES AGREEMENT (hereinafter, the "Agreement ") is executed and entered into on this 10 day of May 2011, by and between the City of Rosemead, A California Municipal Corporation ( "CITY ") and the Rio Hondo Community Development Corporation, A California Public Benefit Corporation ( "RHCDC "). CITY and RHCDC may be referred to collectively as the "Parties" or individually as a "Party." WHEREAS, CITY has determined that RHCDC is a Community Housing Development Organization ( "CHDO ") within the meaning of Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, Under HOME regulations, the CITY is allowed to use up to five percent of its annual HOME allocation to enhance a Community Housing Development Organization's capacity by offsetting operating expenses it incurs (24 CFR § 92.208). The CITY can commit and expend $24,044 which is 5% of its annual HOME allocation from Fiscal -Year 2011 -2012 for the payment of operating expenses of the RHCDC as a certified Community Housing Development Organization. The funds will assist the RHCDC in its continuing efforts related to ownership, development and sponsorship of affordable housing projects located within the CITY. WHEREAS, CITY has elected to allocate Fiscal -Year 2011 -12 HOME Investment Partnerships Program Funds ( "HOME Funds ") to RHCDC to defray certain costs incident to the operation of a CHDO as outlined in Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, CITY has determined that the HOME Funds to be provided to RHCDC satisfy the requirements and limitations outlined in Section 92.300(e) and (f) of Title 24 of the United States Code of Federal Regulation. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2011 -12 Page 2 of 7 SECTION 1. SCOPE OF OPERATING EXPENSE ACTIVITY (a) The above recitals are true and correct and hereby incorporated by this reference. (b) Level of Assistance CITY shall provide RHCDC with the sum total of Twenty - Four Thousand Forty -Four Dollars & 00 /100's ($24,044.00) (hereinafter, the "Funds ") to be utilized for RHCDC's documented Eligible Operating Expenses (budget) related to the ownership, development and sponsorship of affordable housing projects located within the City of Rosemead. The Funds shall be derived from CITY's Fiscal -Year 2011 -12 HOME Funds. (c) Term: This Agreement shall have a term of twelve (12) months from its effective date. For the purposes of this Agreement, the "effective date" shall be July 1, 2011. (d) Eligible Operating Expenses For the purposes of this Agreement the term "Eligible Operating Expenses" as defined by Title 24 CFR Section 92.208 means reasonable and necessary costs for the operation of the RHCDC. Such costs may include: 1. Salaries / wages and other employee compensation for the following: i) Managing Director, (employee, contract employee, independent contractor or consultant); ii) Administrative support (employee, contract employee, independent contractor, consultant and /or vendor); and iii) Other employees, contract employees, independent contractors, consultant and /or vendor essential to carrying out HOME Investment Partnership Program eligible projects. 2. Board and employee education and training 3. Travel expenses associated with the development of affordable housing 4. Rent and utilities 5. Communication costs 6. Taxes, licenses and related fees 7. Insurance 8. Equipment, materials and supplies Rio Hondo Community Development Corporation Operating Expense Agreement— FY 2011 -12 Page 3 of 7 9. Legal, accounting and audit costs 10. Any other reasonable, customary, and documented costs associated with owning, operating, developing and /or sponsoring HOME Investment Partnership Program eligible projects SECTION 2. PLACE OF WORK The Parties understand and agree that RHCDC shall conduct its operations primarily at RHCDC's offices located 11401 Valley Boulevard, Suite. 201, El Monte, California 91731, but may, upon request to the CITY, meet with CITY representatives at the offices of CITY, or such other locations as may be designated by CITY. SECTION 3. TIME DEVOTED TO WORK RHCDC agrees to devote such time as is reasonably necessary to develop affordable housing projects in a timely manner and as requested by CITY. SECTION 4. METHOD OF PAYMENT CITY shall provide reimbursement funding to RHCDC up to a maximum payment of Twenty -Four Thousand Forty -Four Dollars & 00 1100's ($24,044.00) for expenses incurred while working with the CITY on an affordable housing project. The Funds shall be utilized exclusively for Eligible Operating Expenses incurred during the FY 2011- 2012 program year. Funding requests must be accompanied by a detailed expense report. SECTION 5. TERMINATION Either Party may terminate this Agreement with or without cause upon thirty (30) days prior written notice to the other Party. At such time, CITY shall be entitled to reimbursement for all unexpended Funds. To this end, RHCDC shall maintain records of all of its Eligible Operating Expenses and the draw -down of the Funds to pay for such expenses. CITY shall have a right to review all such records upon forty -eight (48) hours prior written notice to RHCDC. SECTION 6. STATUS OF RHCDC RHCDC has been certified as an eligible Community Housing Development Organization and complies with all regulations of the federal HOME Investment Partnership Program relating to CHDO status. The Parties agree that RHCDC, its officers, employees, agents and /or associates are not employees or agents of the CITY for any purposes. Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2011 -12 Page 4 of 7 SECTION 7. INDEMNIFICATION RHCDC shall indemnify, defend and hold free and harmless CITY, its officers, elected officials, employees, agents and volunteers from and against any and all liability, claims, suits, actions, administrative actions or administrative enforcement proceedings, fines, penalties, damages or causes of action arising out of (a) any bodily injury, death, economic loss, or damage to property caused by RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants in the performance of its duties and /or obligations under this Agreement or in the performance of RHCDC's housing development activities; (b) the negligent or intentional failure of RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants to adhere to applicable laws in the performance of RHCDC's duties and /or obligations under this Agreement; (c) any claim employment related claims or suits, including claims or suits for wrongful termination, harassment and /or unpaid compensation brought by any agent, employee, volunteer, contractor, subcontractor or subconsultant of RHCDC; and (d) all other claims connected with RHCDC under this Agreement, including but not limited to RHCDC's breach of this Agreement. It is understood that the duty of RHCDC to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. In the event RHCDC fails to provide such a defense to CITY, RHCDC shall be liable to CITY for CITY's reasonable attorneys' fees and costs incurred to defend itself. Acceptance of insurance certificates and endorsements shall not relieve RHCDC from liability under this indemnification and hold harmless provision. SECTION 8. INSURANCE RHCDC shall procure and, for the duration of this Agreement, maintain the following policies of insurance: (a) General Liability Insurance in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence, combined single limit; (b) Workers' Compensation Insurance as required pursuant to Section 3700 et seq. of the California Labor Code in the event RHCDC hires employees. Prior to commencing any work under this Agreement, RHCDC shall deliver to the CITY such Certificates of Insurance confirming the coverage required by this Agreement and providing to the CITY, thirty (30) days prior, with written notice of limitation of scope or coverage, cancellation or termination. The certificates shall name the CITY, its officers, employees and agents as additional insured. Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2011 -12 Page 5 of 7 SECTION 9. NON -DELIGATION OF DUTIEES CITY agrees to pay for such Eligible Operating Expenses incurred by RHCDC for work, services, and costs incident to the development of HOME Fund funded affordable housing projects. Without the prior written authorization of the CITY, no person(s) or entities, other than RHCDC's officers, agents or employees shall be engaged in such development activities. The foregoing shall not apply to clerical duties and other like activities. SECTION 10. NOTICES Any notice(s) from one Party to another under this Agreement that may be necessary or convenient under shall be transmitted to a party at the applicable addresses indicated in this Section 22. Each notice shall bear a date and shall be in writing and shall be deemed received by the party on the date on which: (i) the notice is personally served on the party; or (ii) the notice is sent by FAX, and confirmed; (iii) by deposit within forty -eight (48) hours thereafter into the United States Mail for delivery by first class postage prepaid of a hard copy of such notice; or (iv) five (5) calendar days after the notice is deposited into United States Mail as certified mail, return - receipt requested and postage prepaid. For the purpose of the Agreement, the following are the mailing addresses to which notices and other correspondence for each of the Parties: TO CITY: City of Rosemead c/o Development Services Business Unit 8838 E. Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Economic Development Administrator TO RHCDC: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn: Donna L. Duncan, President SECTION 11. INTEGRATION PROVISION This Agreement constitutes the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the Agreement. No statements, representations or other agreements, whether oral or written, made by any Party, which are not embodied herein shall be valid or binding. No amendment to, or modification of, this Agreement shall be valid or binding unless in writing and duly signed and executed by each of the Parties. Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2011 -12 Page 6 of 7 SECTION 12. WAIVERS / MODIFICATONS No waiver of any duty or obligation under this Agreement shall be valid, unless expressly waived in writing by the Party to whom the duty or obligation is owed. No alteration, amendment or modification of this Agreement shall be valid or binding, unless mutually approved by the Parties in writing. SECTION 13. GOVERNING LAW This Agreement shall be governed by the laws of the State of California. SECTION 14: INTERPRETATION In preparing and executing this Agreement, each of the Parties received the opportunity to consult with their respective legal counsel. Accordingly, this Agreement, shall not be in favor of one Party over the other in the event of ambiguity, but instead shall be interpreted as if both Parties prepared this Agreement together. SECTION 15. AUTHORITY TO EXECUTE AGREEMENT: RHCDC warrants, represents and agrees that it has duly approved the execution of this Agreement and that upon the execution of this Agreement, RHCDC shall provide CITY with a corporate resolution authorizing the execution of this Agreement on its behalf under the terms and conditions stated herein. RHCDC's signatory to this Agreement personally warrants, represents and agrees that he or she is duly authorized to execute this Agreement on behalf of RHCDC and thereby bind RHCDC to the terms and conditions contained herein. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on this 10` Day of May 2011. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: BY: 4L J Allred Donna L. Duncan CITY MANAGER PRESIDENT Rio Hondo Community Development Corporation Operating Expense Agreement — FY 2011 -12 Page 7 of 7 Attest: By: ( p, P v Gloria Molleda CITY CLERK Approved as to Form: By: Rachel Richman Burke, Williams & Sorensen, LLP City Attorney e AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 10 day of May 2011, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY ", and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non -profit corporation, hereinafter referred to as " RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD "); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT "); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92 for the Fiscal Year 2011 -2012; NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS: Section 1. The RHCDC shall propose projects which meet HOME requirements and conform to the CITY's Consolidated Plan which includes the following activities: (1) the acquisition and rehabilitation of existing substandard single - family housing units for resale to first -time homebuyers; (2) new construction of single- family housing units for sale to first -time homebuyers; (3) the acquisition and rehabilitation of substandard multi- family rental properties; or (4) new construction of multi- family rental properties. Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set - aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Rio Hondo Community Development Corporation Community Housing Development Organization Page 2 of 17 Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and/or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terns shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Parts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). Rio Hondo Community Development Corporation Community Housing Development Organization Page 3 of 17 C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Section 2. The amount of HOME funds the RHCDC may invest on a per -unit basis in affordable housing may not exceed the per -unit dollar limits established by HUD and further defined in 24 CFR -92, Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR 92.355 upon project completion. Section 2. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001 -4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related environmental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601 -19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. Rio Hondo Community Development Corporation Community Housing Development Organization Page 4 of 17 (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101 -07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally- assisted and conducted programs and activities. (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701u)(Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women -owned business enterprises. (I) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A -87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A -110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Non - profit Organizations), A -122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non - profit Institutions), and audit requirements described in OMB Circular A -128 implemented at 24 CFR Part 44 and OMB Circulars A -133 (Audits of Institutions of Higher Learning and Other Non - profit Institutions). (J) The RHCDC will provide a drug -free workplace in accordance with the Drug -Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. Rio Hondo Community Development Corporation Community Housing Development Organization Page 5 of 17 (K) The RHCDC will comply with the requirements of the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government -wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). (l) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three -year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; (c) are not presently indicated for otherwise criminally or civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three -year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. (0) The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis -Bacon Act (40 U.S.C. 276 a -5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and/or City program guidelines. Rio Hondo Community Development Corporation Community Housing Development Organization Page 6 of 17 F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and /or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A -133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. Rio Hondo Community Development Corporation Community Housing Development Organization Page 7 of 17 Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. 1. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set -aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. Rio Hondo Community Development Corporation Community Housing Development Organization Page 8 of 17 K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME- eligible activities.) Section 2. If the RHCDC should receive project — specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set -aside funds. Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME- eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for one year thereafter. Rio Hondo Community Development Corporation Community Housing Development Organization Page 9 of 17 Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. O. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a RHCDC shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for RHCDC designation and /or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part 92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms. of this Agreement. P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (30) days before the effective date of such termination. Section 2. The CITY may also suspend or terminate this Agreement, in whole or in part, if the RHCDC materially fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. Rio Hondo Community Development Corporation Community Housing Development Organization Page 10 of 17 Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges, and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Section 2. The RHCDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation Rio Hondo Community Development Corporation Community Housing Development Organization Page 11 of 17 and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self - insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self - insurance maintained by the CITY, its directors, officials, officers, Rio Hondo Community Development Corporation Community Housing Development Organization Page 12 of 17 employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self - insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the CITY. Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. Rio Hondo Community Development Corporation Community Housing Development Organization Page 13 of 17 S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn: Donna L. Duncan, President CITY: City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Economic Development Administrator Such notice shall be deemed made when personally delivered or when mailed, forty -eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Section 2. This Agreement creates a non - exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise Rio Hondo Community Development Corporation Community Housing Development Organization Page 14 of 17 recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non - exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section 4. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its officials, officers, employees, agents, RHCDC's and contractors arising out of or in connection with the performance of this Agreement, including without limitation the payment of all Rio Hondo Community Development Corporation Community Housing Development Organization Page 15 of 17 consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and /or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section 8. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section 10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Rio Hondo Community Development Corporation Community Housing Development Organization Page 16 of 17 Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for RHCDC, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self - insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. Rio Hondo Community Development Corporation Community Housing Development Organization Page 17 of 17 Section 19. RHCDC has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on this 10 Day of May 2011. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: BY: 926' 0 � l r,4'u ca r All Donna L. Duncan ity Manager President Attest: YA- Gl oria Molleda _ City Clerk Approved as to Form: By: Z `L, Rachel Richman Burke, Williams & Sorensen, LLP City Attorney AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 27'h day of April, 2010, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY", and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non-profit corporation, hereinafter referred to as "RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD"); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT"); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92 for the Fiscal Year 2010-2011; NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS: Section 1. The RHCDC shall propose projects which meet HOME requirements and conform to the CITY's Consolidated Plan which includes the following activities: (1) the acquisition and rehabilitation of existing substandard single-family housing units for resale to first-time homebuyers; (2) new construction of single-family housing units for sale to first-time homebuyers; (3) the acquisition and rehabilitation of substandard multi- family rental properties; or (4) new construction of multi-family rental properties. Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set-aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Rio Hondo Community Development Corporation Community Housing Development Organization Page 2 of 17 Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and/or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terms shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Parts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). Rio Hondo Community Development Corporation Community Housing Development Organization Page 3 of 17 C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Section 2. The amount of HOME funds the RHCDC may invest on a per-unit basis in affordable housing may not exceed the per-unit dollar limits established by HUD and further defined in 24 CFR-92. Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR 92.355 upon project completion. Section 2. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001-4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related environmental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. Rio Hondo Community Development Corporation Community Housing Development Organization Page 4 of 17 (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally-assisted and conducted programs and activities. (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701u)(Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women-owned business enterprises. (I) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A-87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A-110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations), A-122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non-profit Institutions), and audit requirements described in OMB Circular A-128 implemented at 24 CFR Part 44 and OMB Circulars A-133 (Audits of Institutions of Higher Learning and Other Non-profit Institutions). (J) The RHCDC will provide a drug-free workplace in accordance with the Drug-Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. Rio Hondo Community Development Corporation Community Housing Development Organization Page 5 of 17 (K) The RHCDC will comply with the requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government-wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). (N) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three-year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; (c) are not presently indicated for otherwise criminally or civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three-year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. (O) The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis-Bacon Act (40 U.S.C. 276 a-5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and/or City program guidelines. Rio Hondo Community Development Corporation Community Housing Development Organization Page 6 of 17 F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and/or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A-133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. Rio Hondo Community Development Corporation Community Housing Development Organization Page 7 of 17 Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. 1. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set-aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. Rio Hondo Community Development Corporation Community Housing Development Organization Page 8 of 17 K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME-eligible activities.) Section 2. If the RHCDC should receive project-specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set-aside funds. Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME-eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for one year thereafter. Rio Hondo Community Development Corporation Community Housing Development Organization Page 9 of 17 Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. 0. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a RHCDC shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for RHCDC designation and/or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part 92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms of this Agreement. P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (30) days before the effective date of such termination. Section 2. The CITY may also suspend or terminate this Agreement, in whole or in part, if the RHCDC materially fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. Rio Hondo Community Development Corporation Community Housing Development Organization Page 10 of 17 Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges, and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Section 2. The RI-ICDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code I (any auto); and (3) Workers' Compensation Rio Hondo Community Development Corporation Community Housing Development Organization Page I 1 of 17 and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance. RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability. The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self-insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self- insurance maintained by the CITY, its directors, officials, officers, Rio Hondo Community Development Corporation Community Housing Development Organization Page 12 of 17 employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty .(30) days prior written notice by certified mail, return receipt requested.. has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self-insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than ANIII, licensed to do business in California, and satisfactory to the CITY. Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. Rio Hondo Community Development Corporation Community Housing Development Organization Page 13 of 17 S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn: Donna L. Duncan, President CITY: City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Economic Development Administrator Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Section 2. This Agreement creates a non-exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise Rio Hondo Community Development Corporation Community Housing Development Organization Page 14 of 17 recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section 4. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its officials, officers, employees, agents, RHCDC's and contractors arising out of or in connection with the performance of this Agreement, including without limitation the payment of all Rio Hondo Community Development Corporation Community Housing Development Organization Page 15 of 17 consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section 8. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section 10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Rio Hondo Community Development Corporation Community Housing Development Organization Page 16 of 17 Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for RHCDC, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. Rio Hondo Community Development Corporation Community Housing Development Organization Page 17 of 17 Section 19. RHCDC has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on this 27th Day of April 2010. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: BY: r4/11(( 12~~ ltl.(u J ff A ed Donna L. Duncan ity Manager President Attest: Bye o \ Gloria Molleda City Clerk Approved daas. to Form: By: Joseph M. Montes Burke, Williams & Sorensen, LLP City Attorney n u MAYOR: MARGARET CLARK MAYOR PRO TEM: GARY TAYLOR COUNCIL MEMBERS: SANDRA ARMENTA POLLY LOW STEVEN LY May 20, 2009 Ms. Donna L. Duncan, President 0 Poscmcad 8838 E. VALLEY BOULEVARD • P.O. BOX 399 ROSEMEAD, CALIFORNIA 91770 TELEPHONE (626) 569-2100 FAX (626) 307-9218 Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Subject: Extension of Agreement for Allocation of Home CHDO Set-Aside Funds Fiscal Year 2009-10 City Of Rosemead Dear Ms. Duncan: Based on Rio Hondo Community Development Corporation's performance over the past year, the City of Rosemead wishes to extend the term of the subject Agreement (attached as Exhibit A) for an additional twelve-month period beginning July 1, 2009 and ending June 30, 2010. The amount of the Agreement during this period may not exceed $335,603, which equals the 15% required CHDO set-aside funding as shown in the City's HOME grant letter of credit, without City Council approval. All other provisions shall remain in full force and effect. If the extension of Agreement on these terms and conditions is acceptable to Rio Hondo Community Development Corporation, please so indicate in the space provided below. If you have any questions, please feel free to contact the City's Economic Development Administrator, Michelle G. Ramirez, at (626) 569-2158. We look forward to continuing our working relationship. Very truly yours, CITY OF ROSEMEAD MATT HAW KES ORTH Interim City Manager Approved and Accepted by, RIO HONDO COMMUNITY DEVELOPMENT CORPORATION u[ Ceti DONNA L. DUNCAN President • • EXHIBIT A AGREEMENT AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 9m day of October, 2007, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY", and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non-profit corporation, hereinafter referred to as "RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD"); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT"); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92; NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS: Section 1. The RHCDC shall propose projects which meet HOME requirements and conform to the CITY's Consolidated Plan which includes the following activities: (1) the acquisition and rehabilitation of existing substandard single-family housing units for resale to first-time homebuyers; (2) new construction of single-family housing units for sale to first-time homebuyers; (3) the acquisition and rehabilitation of substandard multi- family rental properties; or (4) new construction of multi-family rental properties. Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set-aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Rio Hondo Community Developm•Corporation Community Housing Development Organization Page 2 of 18 Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and/or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terms shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Par ts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). Rio Hondo Community DevelopmeTt Corporation Community Housing Development Organization Page 3 of 18 C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Section 2. The amount of HOME funds the RHCDC may invest on a per-unit basis in affordable housing may not exceed the per-unit dollar limits established by HUD and further defined in 24 CFR-92, Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR 92.355 upon project completion. Section 1. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001-4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related enviromnental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. Rio Hondo Community Developm•Corporation Community Housing Development Organization Page 4 of 18 (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally-assisted and conducted programs and activities. (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701u)(Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women-owned business enterprises. (I) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A-87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A-110 (Grants and Cooperative Agreements. with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations), A-122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non-profit Institutions), and audit requirements described in OMB Circular A-128 implemented at 24 CFR Part 44 and OMB Circulars A-133 (Audits of Institutions of Higher Learning and Other Non-profit Institutions). (J) The RHCDC will provide a drug-free workplace in accordance with the Drug-Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. Rio Hondo Community Development Corporation Community Housing Development Organization Page 5 of 18 (K) The RHCDC will comply with the requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government-wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). (N) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three-year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; (c) are not presently indicated for otherwise criminally or civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three-year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. (0) . The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis-Bacon Act (40 U.S.C. 276 a-5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and/or City program guidelines. Rio Hondo Community Development Corporation • Community Housing Development Organization Page 6 of 18 F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing, market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and/or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A-133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. • • Rio Hondo Community Development Corporation Community Housing Development Organization Page 7 of 18 Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. 1. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set-aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. • 0 Rio Hondo Community Development Corporation Community Housing Development Organization Page 8 of 18 K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME-eligible activities.) Section 2. If the RHCDC should receive project-specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set-aside funds. Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME-eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for one year thereafter. Rio Hondo Community Development Corporation Community Housing Development Organization Page 9 of 18 Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. 0. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a RHCDC shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for RHCDC designation and/or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part 92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms of this Agreement. P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (30) days before the effective date of such termination. Section 2. The CITY may also suspend or terminate this Agreement, in whole or in part, if the RHCDC materially. fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said. HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. 0 0 Rio Hondo Community Development Corporation Community Housing Development Organization Page 10 of 18 Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges, and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Section 2. The RHCDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation Rio Hondo Community Development Corporation Community Housing Development Organization Page 1 I of 18 and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance. RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability. The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self-insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self- insurance maintained by the CITY, its directors, officials, officers, Rio Hondo Community Development Corporation Community Housing Development Organization Page 12 of 18 employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self-insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than ANIII, licensed to do business in California, and satisfactory to the CITY. Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. Rio Hondo Community Development Corporation Community Housing Development Organization Page 13 of 18 S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: President Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 CITY: Director, Department of Community Development City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: CDBG Administration Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Section 2. This Agreement creates a non-exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, 0 Rio Hondo Community Development Corporation Community Housing Development Organization Page 14 of 18 including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section 4. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other parry, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its officials, officers, employees, agents, RHCDC's and contractors arising out of or in connection with the • Rio Hondo Community Development Corporation Community Housing Development Organization Page 15 of 18 performance of this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and/or volunteers; for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section 8. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section .10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. . • 0 Rio Hondo Community Development Corporation Community Housing Development Organization Page 16 of 18 Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for RHCDC, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this. Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to . initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware, of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in Rio Hondo Community Development Corporation Community Housing Development Organization Page 17 of 18 accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. Section 19. RHCDC has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as,expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on the date first herein above written. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: Attest: , L d B: A . &0 BY: tflLi-9 .17e 46yt Donna L. Duncan PRESIDENT CITY CLERK Rio Hondo Community Development Corporation Community Housing Development Organization Page 18 of 18 Approved as to Form: By: J ontes CITY ATTRONBY 0 0 CITY OF ROSEMEAD FISCAL YEAR 2009-2010 OPERATING EXPENSES AGREEMENT FOR COMMUNITY HOUSING DEVELOPMENT ORGANIZATION BY AND BETWEEN THE CITY OF ROSEMEAD, A California Municipal Corporation -AND- THE RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California Public Benefit Corporation THIS OPERATING EXPENSES AGREEMENT (hereinafter, the "Agreement") is executed and entered into on this 12th day of May 2009, by and between the City of Rosemead, A California Municipal Corporation ("CITY") and the Rio Hondo Community Development Corporation, A California Public Benefit Corporation ("RHCDC"). CITY and RHCDC may be referred to collectively as the "Parties" or individually as a "Party." WHEREAS, CITY has determined that RHCDC is a Community Housing Development Organization ("CHDO") within the meaning of Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, Under HOME regulations, the CITY is allowed to use up to five percent of its annual HOME allocation to enhance a Community Housing Development Organization's capacity by offsetting operating expenses it incurs (24 CFR § 92.208). The CITY can commit and expend $27,560 which is 5% of its annual HOME allocation from Fiscal-Year 2008-2009 for the payment of operating expenses of the RHCDC as a certified Community Housing Development Organization. The funds will assist the RHCDC in its continuing efforts related to ownership, development and sponsorship of affordable housing projects located within the CITY. WHEREAS, CITY has elected to allocate Fiscal-Year 2009-10 HOME Investment Partnerships Program Funds ("HOME Funds") to RHCDC to defray certain costs incident to the operation of a CHDO as outlined in Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, CITY has determined that the HOME Funds to be provided to RHCDC satisfy the requirements and limitations outlined in Section 92.300(e) and (f) of Title 24 of the United States Code of Federal Regulation. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: Rio Hondo Community Development Corporation Operating Expense Agreement - FY 2009-10 Page 2 of 7 SECTION 1. SCOPE OF OPERATING EXPENSE ACTIVITY (a) The above recitals are true and correct and hereby incorporated by this reference. (b) Level of Assistance: CITY shall provide RHCDC with the sum total of Twenty- Seven Thousand Five Hundred and Sixty Dollars & 00/100's ($27,560.00) (hereinafter, the "Funds") to be utilized for RHCDC's documented Eligible Operating Expenses (budget) related to the ownership, development and sponsorship of affordable housing projects located within the City of Rosemead. The Funds shall be derived from CITY's Fiscal-Year 2009-10 - HOME Funds. (c) Term: This Agreement shall have a term of twelve (12) months from its effective date. For the purposes of this Agreement, the "effective date" shall be July 1, 2009. (d) Eligible Operating Expenses: For the purposes of this Agreement the term "Eligible Operating Expenses" as defined by Title 24 CFR Section 92.208 means reasonable and necessary costs for the operation of the RHCDC. Such costs may include: 1. Salaries / wages and other employee compensation for the following: i) Managing Director, (employee, contract employee, independent contractor or consultant); ii) Administrative support (employee, contract employee, independent contractor, consultant and/or vendor); and iii) Other employees, contract employees, independent contractors, consultant and/or vendor essential to carrying out HOME Investment Partnership Program eligible projects. 2. Board and employee education and training 3. Travel expenses associated with the development of affordable housing 4. Rent and utilities 5. Communication costs 6. Taxes, licenses and related fees 7. Insurance ' A Rio Hondo Community Development Corporation Operating Expense Agreement - FY 2009-10 Page 3 of 7 8. Equipment, materials and supplies 9. Legal, accounting and audit costs 10.Any other reasonable, customary, and documented costs associated with owning, operating, developing and/or sponsoring HOME Investment Partnership Program eligible projects SECTION 2. PLACE OF WORK The Parties understand and agree that RHCDC shall conduct its operations primarily at RHCDC's offices located 11401 Valley Boulevard, Suite. 201, El Monte, California 91731, but may, upon request to the CITY, meet with CITY representatives at the offices of CITY, or such other locations as may be designated by CITY. SECTION 3. TIME DEVOTED TO WORK RHCDC agrees to devote such time as is reasonably necessary to develop affordable housing projects in a timely manner and as requested by CITY. SECTION 4. METHOD OF PAYMENT CITY shall provide reimbursement funding to RHCDC up to a maximum payment of Twenty-Seven Thousand Five Hundred and Sixty Dollars & 00/100's ($27,560.00) for expenses incurred while working with the CITY on an affordable housing project. The Funds shall be utilized exclusively for Eligible Operating Expenses incurred during the FY 2009-2010 program year. Funding requests must be accompanied by a detailed expense report. SECTION 5. TERMINATION Either Party may terminate this Agreement with or without cause upon thirty (30) days prior written notice to the other Party. At such time, CITY shall be entitled to reimbursement for all unexpended Funds. To this end, RHCDC shall maintain records of all of its Eligible Operating Expenses and the draw-down of the Funds to pay for such expenses. CITY shall have a right to review all such records upon forty-eight (48) hours prior written notice to RHCDC. SECTION 6. STATUS OF RHCDC RHCDC has been certified as an eligible Community Housing Development Organization and complies with all regulations of the federal HOME Investment Partnership Program relating to CHDO status. The Parties agree that RHCDC, its officers, employees, agents and/or associates are not employees or agents of the CITY for any purposes. I Rio Hondo Community Development Corporation Operating Expense Agreement - FY 2009-10 Page 4 of 7 SECTION 7. INDEMNIFICATION RHCDC shall indemnify, defend and hold free and harmless CITY, its officers, elected officials, employees, agents and volunteers from and against any and all liability, claims, suits, actions, administrative actions or administrative enforcement proceedings, fines, penalties, damages or causes of action arising out of (a) any bodily injury, death, economic loss, or damage to property caused by RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants in the performance of its duties and/or obligations under this Agreement or in the performance of RHCDC's housing development activities; (b) the negligent or intentional failure of RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants to adhere to applicable laws in the performance of RHCDC's duties and/or obligations under this Agreement; (c) any claim employment related claims or suits, including claims or suits for wrongful termination, harassment and/or unpaid compensation brought by any agent, employee, volunteer, contractor, subcontractor or subconsultant of RHCDC; and (d) all other claims connected with RHCDC under this Agreement, including but not limited to RHCDC's breach of this Agreement. It is understood that the duty of RHCDC to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. In the event RHCDC fails to provide such a defense to CITY, RHCDC shall be liable to CITY for CITY's reasonable attorneys' fees and costs incurred to defend itself. Acceptance of insurance certificates and endorsements shall not relieve RHCDC from liability under this indemnification and hold harmless provision. SECTION 8. INSURANCE RHCDC shall procure and, for the duration of this Agreement, maintain the following policies of insurance: (a) General Liability Insurance in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence, combined single limit; (b) Workers' Compensation Insurance as required pursuant to Section 3700 et seq. of the California Labor Code in the event RHCDC hires employees. Prior to commencing any work under this Agreement, RHCDC shall deliver to the CITY such Certificates of Insurance confirming the coverage required by this Agreement and providing to the CITY, thirty (30) days prior, with written notice of limitation of scope or coverage, cancellation or termination. The certificates shall name the CITY, its officers, employees and agents as additional insured. Rio Hondo Community Development Corporation Operating Expense Agreement - FY 2009-10 Page 5 of 7 SECTION 9. NON-DELIGATION OF DUTIEES CITY agrees to pay for such Eligible Operating Expenses incurred by RHCDC for work, services, and costs incident to the development of HOME Fund funded affordable housing projects. Without the prior written authorization of the CITY, no person(s) or entities, other than RHCDC's officers, agents or employees shall be engaged in such development activities. The foregoing shall not apply to clerical duties and other like activities. SECTION 10. NOTICES Any notice(s) from one Party to another under this Agreement that may be necessary or convenient under shall be transmitted to a party at the applicable addresses indicated in this Section 22. Each notice shall bear a date and shall be in writing and shall be deemed received by the party on the date on which: (i) the notice is personally served on the party; or (ii) the notice is sent by FAX, and confirmed; (iii) by deposit within forty-eight (48) hours thereafter into the United States Mail for delivery by first class postage prepaid of a hard copy of such notice; or (iv) five (5) calendar days after the notice is deposited into United States Mail as certified mail, return-receipt requested and postage prepaid. For the purpose of the Agreement, the following are the mailing addresses to which notices and other correspondence for each of the Parties: TO CITY: City of Rosemead c/o Development Services Business Unit 8838 E. Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Economic Development Administrator TO RHCDC: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn: Donna L. Duncan, President SECTION 11. INTEGRATION PROVISION This Agreement constitutes the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the Agreement. . No statements, representations or other agreements, whether oral or written, made by any Party, which are not embodied herein shall be valid or binding. No amendment to, or modification of, this Agreement shall be valid or binding unless in writing and duly signed and executed by each of the Parties. Rio Hondo Community Development Corporation Operating Expense Agreement - FY 2009-10 Page 6 of 7 SECTION 12. WAIVERS / MODIFICATONS No waiver of any duty or obligation under this Agreement shall be valid, unless expressly waived in writing by the Party to whom the duty or obligation is owed. No alteration, amendment or modification of this Agreement shall be valid or binding, unless mutually approved by the Parties in writing. SECTION 13. GOVERNING LAW This Agreement shall be governed by the laws of the State of California. SECTION 14. INTERPRETATION In preparing and executing this Agreement, each of the Parties received the opportunity to consult with their respective legal counsel. Accordingly, this Agreement, shall not be in favor of one Party over the other in the event of ambiguity, but instead shall be interpreted as if both Parties prepared this Agreement together. SECTION 15. AUTHORITY TO EXECUTE AGREEMENT: RHCDC warrants, represents and agrees that it has duly approved the execution of this Agreement and that upon the execution of this Agreement, RHCDC shall provide CITY with a corporate resolution authorizing the execution of this Agreement on its behalf under the terms and conditions stated herein. RHCDC's signatory to this Agreement personally warrants, represents and agrees that he or she is duly authorized to execute this Agreement on behalf of RHCDC and thereby bind RHCDC to the terms and conditions contained herein. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on this 12th Day of May 2009. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT i CORPORATION BY: BY: T~ - Ot - /L~,Ge.u Ne~- :ltewart t Donna L. Duncan ERIM CITY MANAGER PRESIDENT Attest: Rio Hondo Community Development Corporation Operating Expense Agreement - FY 2009-10 Page 7 of 7 By: l u Vim'/ Gloria Molleda CITY CLERK Approved as to Form: By: Joe Wntes Burke, Williams & Sorensen, LLP Commission General Counsel 0 . 0 CITY OF ROSEMEAD FISCAL YEAR 2008-2009 OPERATING EXPENSES AGREEMENT FOR COMMUNITY HOUSING DEVELOPMENT ORGANIZATION BY AND BETWEEN THE CITY OF ROSEMEAD, A California Municipal Corporation -AND- THE RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California Public Benefit Corporation THIS OPERATING EXPENSES AGREEMENT (hereinafter, the "Agreement") is executed and entered into on this 22nd day of April 2008, by and between the City of --Rosemead, A California Municipal Corporation ("CITY") and the Rio Hondo Community Development Corporation, A California Public Benefit Corporation ("RHCDC"). CITY and RHCDC may be referred to collectively as the "Parties" or individually as a "Party." WHEREAS, CITY has determined that RHCDC is a Community Housing Development Organization ("CHDO") within the meaning of Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, Under HOME regulations, the CITY is allowed to use up to five percent of its annual HOME allocation to enhance a Community Housing Development Organization's capacity by offsetting operating expenses it incurs (24 CFR § 92.208). The CITY can commit and expend $24,806 which is 5% of its annual HOME allocation from Fiscal-Year 2008-2009 for the payment of operating expenses of the RHCDC as a certified Community Housing Development Organization. The funds will assist the RHCDC in its continuing efforts related to ownership, development and sponsorship of affordable housing projects located within the CITY. WHEREAS, CITY has elected to allocate Fiscal-Year 2008-09 HOME Investment Partnerships Program Funds ("HOME Funds") to RHCDC to defray certain costs incident to the operation of a CHDO as outlined in Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, CITY has determined that the HOME Funds to be provided to RHCDC satisfy the requirements and limitations outlined in Section 92.300(e) and (f) of Title 24 of the United States Code of Federal Regulation. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: Rio Hondo Community ielopment Corporation • Operating Expense Agreement- FY 2008-09 Page 2 of 7 SECTION 1. SCOPE OF OPERATING EXPENSE ACTIVITY (a) The above recitals are true and correct and hereby incorporated by this reference. (b) Level of Assistance: CITY shall provide RHCDC with the sum total of Twenty- Four Thousand Eight Hundred and Six Dollars & 00/100's ($24,806.00) (hereinafter, the "Funds") to be utilized for RHCDC's documented Eligible Operating Expenses (budget) related to the ownership, development and sponsorship of affordable housing projects located within the City of Rosemead. The Funds shall be derived from CITY's Fiscal-Year 2008-09 HOME. Funds. (c) Term: This Agreement shall have a term of twelve (12) months from its effective date. For the purposes of this Agreement, the "effective date" shall be July 1, 2008. (d) Eligible Operating Expenses: For the purposes of this Agreement the term "Eligible Operating Expenses" as defined by Title 24 CFR Section 92.208 means reasonable and necessary costs for the operation of the RHCDC. Such costs may include: 1. Salaries / wages and other employee compensation for the following: i) Managing Director, (employee, contract employee, independent contractor or consultant); ii) Administrative support (employee, contract employee, independent contractor, consultant and/or vendor); and iii) Other employees, contract employees, independent contractors, consultant and/or vendor essential to carrying out HOME Investment Partnership Program eligible projects. 2. Board and employee education and training 3. Travel expenses associated with the development of affordable housing 4. Rent and utilities 5. Communication costs 6. Taxes, licenses and related fees 7. Insurance Rio Hondo Community Alopment Corporation • Operating Expense Agreement - FY 2008-09 Page 3 of 7 8. Equipment, materials and supplies 9. Legal, accounting and audit costs 10.Any other reasonable, customary, and documented costs associated with owning, operating, developing and/or sponsoring HOME Investment Partnership Program eligible projects SECTION 2. PLACE OF WORK The Parties understand and agree that RHCDC shall conduct its operations primarily at RHCDC's offices located 11401 Valley Boulevard, Suite. 201, El Monte, California 91731, but may, upon request to the CITY, meet with CITY representatives at the offices of CITY, or such other locations as may be designated by CITY. SECTION 3. TIME DEVOTED TO WORK RHCDC agrees to devote such time as is reasonably necessary to develop affordable housing projects in a timely manner and as requested by CITY. SECTION 4. METHOD OF PAYMENT CITY shall provide reimbursement funding to RHCDC up to a maximum payment of Twenty-Four Thousand Eight Hundred and Six Dollars & 00/100's ($24,806.00) for expenses incurred while working with the CITY on an affordable housing project. The Funds shall be utilized exclusively for Eligible Operating Expenses incurred during the FY 2008-2009 program year. Funding requests must be accompanied by a detailed expense report. SECTION 5. TERMINATION Either Party may terminate this Agreement with or without cause upon thirty (30) days prior written notice to the other Party. At such time, CITY shall be entitled to reimbursement for all unexpended Funds. To this end, RHCDC shall maintain records of all of its Eligible Operating Expenses and the draw-down of the Funds to pay for such expenses. CITY shall have a right to review all such records upon forty-eight (48) hours prior written notice to RHCDC. SECTION 6. STATUS OF RHCDC RHCDC has been certified as an eligible Community Housing Development Organization and complies with all regulations of the federal HOME Investment Partnership Program relating to CHDO status. The Parties agree that RHCDC, its officers, employees, agents and/or associates are not employees or agents of the CITY for any purposes. Rio Hondo Community Velopment Corporation • Operating Expense Agreement - FY 2008-09 Page 4 of 7. SECTION 7. INDEMNIFICATION RHCDC shall indemnify, defend and hold free and harmless CITY, its officers, elected officials, employees, agents and volunteers from and against any and all liability, claims, suits, actions, administrative actions or administrative enforcement proceedings, fines, penalties, damages or causes of action arising out of (a) any bodily injury, death, economic loss, or damage to property caused by RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants in the performance of its duties and/or obligations under this Agreement or in the performance of RHCDC's housing development activities; (b) the negligent or intentional failure of RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants to adhere to applicable laws in the performance of RHCDC's duties and/or obligations under this Agreement; (c) any claim employment related claims or suits, including claims or suits for wrongful termination, harassment and/or unpaid compensation brought by any agent, employee, volunteer, contractor, subcontractor or subconsultant of RHCDC; and (d) all other claims connected with RHCDC under this Agreement, including but not limited to RHCDC's breach of this Agreement. It is understood that the duty of RHCDC to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. In the event RHCDC fails to provide such a defense to CITY, RHCDC shall be liable to CITY for CITY's reasonable attorneys' fees and costs incurred to defend itself. Acceptance of insurance certificates and endorsements shall not relieve RHCDC from liability under this indemnification and hold harmless provision. SECTION 8. INSURANCE RHCDC shall procure and, for the duration of this Agreement, maintain the following policies of insurance: (a) General Liability Insurance in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence, combined single limit; (b) Workers' Compensation Insurance as required pursuant to Section 3700 et seq. of the California Labor Code in the event RHCDC hires employees. Prior to commencing any work under this Agreement, RHCDC shall deliver to the CITY such Certificates of Insurance confirming the coverage required by this Agreement and providing to the CITY, thirty (30) days prior, with written notice of limitation of scope or coverage, cancellation or termination. The certificates shall name the CITY, its officers, employees and agents as additional insured. Rio Hondo Community Velopment Corporation • Operating Expense Agreement - FY 2008-09 Page 5 of 7 SECTION 9. NON-DELIGATION OF DUTIEES CITY agrees to pay for such Eligible Operating Expenses incurred by RHCDC for work, services, and costs incident to the development of HOME Fund funded affordable housing projects. Without the prior written authorization of the CITY, no person(s) or entities, other than RHCDC's officers, agents or employees shall be engaged in such development activities. The foregoing shall not apply to clerical duties and other like activities. SECTION 10. NOTICES Any notice(s) from one Party to another under this Agreement that may be necessary or convenient under shall be transmitted to a party at the applicable addresses indicated in this Section 22. Each notice shall bear a date and shall be in writing and shall be deemed received by the party on the date on which: (i) the notice is personally served on the party; or (ii) the notice is sent by FAX, and confirmed; (iii) by deposit within forty-eight (48) hours thereafter into the United States Mail for delivery by first class postage prepaid of a hard copy of such notice; or (iv) five (5) calendar days after the notice is deposited into United States Mail as certified mail, return-receipt requested and postage prepaid. For the purpose of the Agreement, the following are the mailing addresses to which notices and other correspondence for each of the Parties: TO CITY: City of Rosemead c/o Development Services Business Unit 8838 E. Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Economic Development Administrator TO RHCDC: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn: Donna L. Duncan, President SECTION 11. INTEGRATION PROVISION This Agreement constitutes the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the Agreement. No statements, representations or other agreements, whether oral or written, made by any Party, which are not embodied herein shall be valid or binding. No amendment to, or modification of, this Agreement shall be valid or binding unless in writing and duly signed and executed by each of the Parties. Rio Hondo Community felopment Corporation • Operating Expense Agreement- FY 2008-09 Page 6 of 7 SECTION 12. WAIVERS / MODIFICATONS . No waiver of.any duty or obligation under this Agreement shall be valid, unless expressly waived in writing by the Party to whom the duty or obligation is owed. No alteration, amendment or modification of this Agreement shall be valid or binding, unless mutually approved by the Parties in writing. SECTION 13. GOVERNING LAW This Agreement shall be governed by the laws of the State of California. SECTION 14. INTERPRETATION In preparing and executing this Agreement, each of the Parties received the opportunity to consult with their respective legal counsel. Accordingly, this Agreement, shall not be in favor of one Party over the other in the event of ambiguity, but instead shall be interpreted as if both Parties prepared this Agreement together. SECTION 15. AUTHORITY TO EXECUTE AGREEMENT: RHCDC warrants, represents and agrees that it has duly approved the execution of this Agreement and that upon the execution of this Agreement, RHCDC shall provide CITY with a corporate resolution authorizing the execution of this Agreement on its behalf under the terms and conditions stated herein. RHCDC's signatory to this Agreement personally warrants, represents and agrees that he or she is duly authorized to execute this Agreement on behalf of RHCDC and thereby bind RHCDC to the terms and conditions contained herein. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on this 22nd Day of April 2008. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: V `a"L-9-~ Oliver Chi CITY MANAGER BY: &R- 41 - & e~ Donna L. Duncan PRESIDENT Attest: Rio Hondo Community felopment Corporation • Operating Expense Agreement- FY 2008-09 Page 7 of 7 BY: Gloria Molleda CITY CLERK Approved as to Form: By. 2d c-, ;~7 Joe Montes Burke, Williams & Sorensen, LLP Commission General Counsel 0 0 CITY OF ROSEMEAD OPERATING EXPENSES AGREEMENT FOR COMMUNITY HOUSING DEVELOPMENT ORGANIZATION BY AND BETWEEN THE CITY OF ROSEMEAD, A California Municipal Corporation -AND- THE RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California Public Benefit Corporation THIS OPERATING EXPENSES AGREEMENT (hereinafter, the "Agreement") is executed and entered into on this 8m day of April 2008, by and between the City of Rosemead, A California Municipal Corporation ("CITY") and the Rio Hondo Community Development Corporation, A California Public Benefit Corporation ("RHCDC"). CITY and RHCDC may be referred to collectively as the "Parties" or individually as a "Party." WHEREAS, CITY has determined that RHCDC is a Community Housing Development Organization ("CHDO") within the meaning of Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, Under HOME regulations, the CITY is allowed to use up to five percent of its annual HOME allocation to enhance a Community Housing Development Organization's capacity by offsetting operating expenses it incurs (24 CFR § 92.208). The CITY can commit and expend $13,000 which is 2.5% of its annual HOME allocation from Fiscal-Year 2007-2008 for the payment of operating expenses of the RHCDC as a certified Community Housing Development Organization. The funds will assist the RHCDC in its continuing efforts related to ownership, development and sponsorship of affordable housing projects located within the CITY. WHEREAS, CITY has elected to allocate Fiscal-Year 2007-08 HOME Investment Partnerships Program Funds ("HOME Funds") to RHCDC to defray certain costs incident to the operation of a CHDO as outlined in Section 92.208(a) of Title 24 of the United States Code of Federal Regulations; and WHEREAS, CITY has determined that the HOME Funds to be provided to RHCDC satisfy the requirements and limitations outlined in Section 92.300(e) and (f) of Title 24 of the United States Code of Federal Regulation. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows: SECTION 1. SCOPE OF OPERATING EXPENSE ACTIVITY (a) The above recitals are true and correct and hereby incorporated by this reference. Rio Hondo Community Development Corporation Operating Expense Agreement Page 2 of 6 (b) Level of Assistance: CITY shall provide RHCDC with the sum total of Thirteen Thousand Dollars & 00/100's ($13,000.00) (hereinafter, the "Funds") to be utilized for RHCDC's documented Eligible Operating Expenses (budget) related to the ownership, development and sponsorship of affordable housing projects located within the City of Rosemead. The Funds shall be derived from CITY's Fiscal-Year 2007-08 HOME Funds. (c) Term: This Agreement shall have a term of twelve (12) months from its effective date. For the purposes of this Agreement, the "effective date" shall be the date upon which all of the Parties have duly approved and signed this Agreement. (d) Eligible Operating Expenses: For the purposes of this Agreement the term "Eligible Operating Expenses" as defined by Title 24 CFR Section 92.208 means reasonable and necessary costs for the operation of the RHCDC. Such costs may include: 1. Salaries / wages and other employee compensation for the following: i) Managing Director, (employee, contract employee, independent contractor or consultant); ii) Administrative support (employee, contract employee, independent contractor, consultant and/or vendor); and iii) Other employees, contract employees, independent contractors, consultant and/or vendor essential to carrying out HOME Investment Partnership Program eligible projects. 2. Board and employee education and training 3. Travel expenses associated with the development of affordable housing 4. Rent and utilities 5. Communication costs 6. Taxes, licenses and related fees 7. Insurance 8. Equipment, materials and supplies 9. Legal, accounting and audit costs 10. Any other reasonable, customary, and documented costs associated with owning, operating, developing and/or sponsoring HOME Investment Partnership Program eligible projects Rio Hondo Community Development Corporation Operating Expense Agreement Page 3 of 6 SECTION 2. PLACE OF WORK The Parties understand and agree that RHCDC shall conduct its operations primarily at RHCDC's offices located 11401 Valley Boulevard, Suite. 201, El Monte, California 91731, but may, upon request to the CITY, meet with CITY representatives at the offices of CITY, or such other locations as may be designated by CITY. SECTION 3. TIME DEVOTED TO WORK RHCDC agrees to devote such time as is reasonably necessary to develop affordable housing projects in a timely manner and as requested by CITY. SECTION 4. METHOD OF PAYMENT CITY shall provide reimbursement funding to RHCDC up to a maximum payment of Thirteen Thousand Dollars & 00/100's ($13,000.00) for expenses incurred while working with the CITY on an affordable housing project. The Funds shall be utilized exclusively for Eligible Operating Expenses incurred during the FY 2007-2008 program year. Funding requests must be accompanied by a detailed expense report. SECTION 5. TERMINATION Either Party may terminate this Agreement with or without cause upon thirty (30) days prior written notice to the other Party. At such time, CITY shall be entitled to reimbursement for all unexpended Funds. To this end, RHCDC shall maintain records of all of its Eligible Operating Expenses and the draw-down of the Funds to pay for such expenses. CITY shall have a right to review all such records upon forty-eight (48) hours prior written notice to RHCDC. SECTION 6. STATUS OF RHCDC RHCDC has been certified as an eligible Community Housing Development Organization and complies with all regulations of the federal HOME Investment Partnership Program relating to CHDO status. The Parties agree that RHCDC, its officers, employees, agents and/or associates are not employees or agents of the CITY for any purposes. SECTION 7. INDEMNIFICATION RHCDC shall indemnify, defend and hold free and harmless CITY, its officers, elected officials, employees, agents and volunteers from and against any and all liability, claims, suits, actions, administrative actions or administrative enforcement proceedings, fines, penalties, damages or causes of action arising out of (a) any bodily injury, death, economic loss, or damage to property caused by RHCDC, its officers, agents, employees, contractors, subcontractors or subconsultants in the performance of its duties and/or obligations under this Agreement or in the performance of RHCDC's housing development activities; (b) the negligent or intentional failure of RHCDC, its Rio Hondo Community Development Corporation Operating Expense Agreement Page.4 of 6 officers, agents, employees, contractors, subcontractors or subconsultants to adhere to applicable laws in the performance of RHCDC's duties and/or obligations under this Agreement; (c) any claim employment related claims or suits, including claims or suits for wrongful termination, harassment and/or unpaid compensation brought by any agent, employee, volunteer, contractor, subcontractor or subconsultant of RHCDC; and (d) all other claims connected with RHCDC under this Agreement, including but not limited to RHCDC's breach of this Agreement. It is understood that the duty of RHCDC to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. In the event RHCDC fails to provide such a defense to CITY, RHCDC shall be liable to CITY for CITY's reasonable attorneys' fees and costs incurred to defend itself. Acceptance of insurance certificates and endorsements shall not relieve RHCDC from liability under this indemnification and hold harmless provision. SECTION 8. INSURANCE RHCDC shall procure and, for the duration of this Agreement, maintain the following policies of insurance: (a) General Liability Insurance in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence, combined single limit; (b) Workers' Compensation Insurance as required pursuant to Section 3700 et seq. of the California Labor Code in the event RHCDC hires employees. Prior to commencing any work under this Agreement, RHCDC shall deliver to the CITY such Certificates of Insurance confirming the coverage required by this Agreement and providing to the CITY, thirty (30) days prior, with written notice of limitation of scope or coverage, cancellation or termination. The certificates shall name the CITY, its officers, employees and agents as additional insured. SECTION 9. NOWDELIGATION OF DUTIEES CITY agrees to pay for such Eligible Operating Expenses incurred by RHCDC for work, services, and costs incident to the development of HOME Fund funded affordable housing projects. Without the prior written authorization of the CITY, no person(s) or entities, other than RHCDC's officers, agents or employees shall be engaged in such development activities. The foregoing shall not apply to clerical duties and other like activities. • 0 Rio Hondo Community Development Corporation Operating Expense Agreement Page 5 of 6 SECTION 10. NOTICES Any notice(s) from one Party to another under this Agreement that may be necessary or convenient under shall be transmitted to a party at the applicable addresses indicated in this Section 22. Each notice shall bear a date and shall be in writing and shall be deemed received by the party on the date on which: (i) the notice is personally served on the party; or (ii) the notice is sent by FAX, and confirmed; (iii) by deposit within forty-eight (48) hours thereafter into the United States Mail for delivery by first class postage prepaid of a hard copy of such notice; or (iv) five (5) calendar days after the notice is deposited into United States Mail as certified mail, return-receipt requested and postage prepaid. For the purpose of the Agreement, the following are the mailing addresses to which notices and other correspondence for each of the Parties: TO CITY: City of Rosemead c/o Development Services Business Unit 8838 E. Valley Boulevard Rosemead, California 91770 Attn: Michelle G. Ramirez, Economic Development Administrator TO RHCDC: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn: Donna L. Duncan, President SECTION 11. INTEGRATION PROVISION This Agreement constitutes the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the Agreement. No statements, representations or other agreements, whether oral or written, made by any Party, which are not embodied herein shall be valid or binding. No amendment to, or modification of, this Agreement shall be valid or binding unless in writing and duly signed and executed by each of the Parties. SECTION 12. WAIVERS / MODIFICATONS No waiver of any duty or obligation under this Agreement shall be valid, unless expressly waived in writing by the Party to whom the duty or obligation is owed. No alteration, amendment or modification of this Agreement shall be valid or binding, unless mutually approved by the Parties in writing. SECTION 13. GOVERNING LAW This Agreement shall be governed by the laws of the State of California. • 0 Rio Hondo Community Development Corporation Operating Expense Agreement Page 6 of 6 SECTION 14. INTERPRETATION In preparing and executing this Agreement, each of the Parties received the opportunity to consult with their respective legal counsel. Accordingly, this Agreement, shall not be in favor of one Party over the other in the event of ambiguity, but instead shall be interpreted as if both Parties prepared this Agreement together. SECTION 15. AUTHORITY TO EXECUTE AGREEMENT: RHCDC warrants, represents and agrees that it has duly approved the execution of this Agreement and that upon the execution of this Agreement, RHCDC shall provide CITY with a corporate resolution authorizing the execution of this Agreement on its behalf under the terms and conditions stated herein. RHCDC's signatory to this Agreement personally warrants, represents and agrees that he or she is duly authorized to execute this Agreement on behalf of RHCDC and thereby bind RHCDC to the terms and conditions contained herein. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on this 8`h Day of April 2008. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: L ) Attest: gGlohaMoOlledVa CITY CLERK Approved as to Form: By: Jo ontes CITY ATTORNEY BY: lP CLPn & C---- Donna L. Duncan PRESIDENT 0 0 AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION RESERVING HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS This Agreement, entered this 9c' day of October, 2007, is made by and between the CITY OF ROSEMEAD, hereinafter referred to as "CITY", and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a non-profit corporation, hereinafter referred to as "RHCDC" . The parties hereto agree as follows: WHEREAS, the CITY has entered into an Agreement to receive funds under the HOME Investment Partnerships Program (hereinafter called the "HOME" Program) from the US Department of Housing and Urban Development (hereinafter called "HUD"); and WHEREAS, the CITY has set aside a portion of its HOME Program funds for community housing development organizations (CHDOs) in accordance with the National Affordable Housing Act of 1990, as amended, (hereinafter called the "ACT"); and WHEREAS, the RHCDC has been certified with the CITY as a community housing development organization or CHDO pursuant to HUD rule 24 CFR Part 92 which sets forth regulations to implement the HOME Program; and WHEREAS, the CITY desires to engage the RHCDC to render certain assistance as an owner, sponsor or developer of housing in conformance with 24 CFR Part 92; NOW, THEREFORE, the parties hereto do hereby agree as follows: A. USE OF HOME FUNDS:. Section 1. The RHCDC shall propose projects which meet HOME requirements and conform to the CITY's Consolidated Plan which includes the following activities: (1) the acquisition and rehabilitation of existing substandard single-family housing units for resale to first-time homebuyers; (2) new construction of single-family housing units for sale to first-time homebuyers; (3) the acquisition and rehabilitation of substandard multi- family rental properties; or (4) new construction of multi-family rental properties. Section 2. The CITY, at its discretion, shall allocate HOME funds to the RHCDC including all or any part of any CHDO set-aside, in amounts determined appropriate by the CITY to best meet HOME Program objectives. Rio Hondo Community Development Corporation Community Housing Development Organization Page 2 of 18 Section 3. Under HUD guidelines, the allocation of HOME funds to a RHCDC may take one or more of these forms: project assistance (interest bearing loans, no interest bearing loans, deferred payment loans, advances, interest subsidies, grants as well as direct equity investments); operating subsidies; and development assistance (technical assistance, site control loans or seed money loans). _ Section 4. All proposals for projects shall be submitted by RHCDC in writing, with a detailed budget and a description of how the proposed project qualifies for HOME funding and/or meets objectives for the use of HOME funds. The City Council may approve such projects and allocate funding for such projects in the City Council's sole and absolute discretion, pursuant to HOME guidelines and requirements. Any and all administrative, staff or other costs. incurred by RHCDC in investigating, preparing and proposing projects shall only be reimbursable if the project is approved by the City Council, and then only to the extent allowed by HOME guidelines and requirements. Any projects approved by the City Council must adhere to HOME guidelines and requirements and the terms of this Agreement and RHCDC's agreement to such guidelines, requirements and terms shall be memorialized in writing as either an addendum or separate agreement at the City's election. Section 5. The RHCDC shall perform the projects or tasks related to its allocation of HOME funds according to the schedule and within the budget submitted as a part of the annual application process. B. AFFORDABILITY: Section 1. The RHCDC shall ensure that housing it assists with HOME funds meets the affordability requirements of 24 CFR Parts 92 or 94, as applicable. Section 2. The RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet the affordability requirements for the specified time period. Section 3. If the RHCDC is undertaking rental projects, the RHCDC shall establish affordable initial rents and procedures for rent increases. Section 4. If the RHCDC is undertaking homeownership projects for sale to homebuyers, the RHCDC shall set forth resale or recapture requirements that conform to 24 CFR Part 92.254(a). Rio Hondo Community Development Corporation Community Housing Development Organization Page 3 of 18 C. PROJECT REQUIREMENTS: Section 1. The RHCDC shall comply with project requirements specified in 24 CFR subpart F, as applicable in accordance with the type of project assisted. Section 2. The amount of HOME funds the RHCDC may invest on a per-unit basis in affordable housing may not exceed the per-unit dollar limits established by HUD and further defined in 24 CFR-92, Section 92.250. D. PROPERTY STANDARDS: Section 1. The RHCDC shall ensure that the housing meets the property standards in 24 CFR 92.251 and the lead based paint requirements in 24 CFR. 92.355 upon project completion. Section 2. The RHCDC shall maintain rental housing in accordance with the standards in 24 CFR 92.251 for the duration of the affordability period. E. FEDERAL REQUIREMENTS Section 1. The RHCDC also agrees to' carry out all activities in compliance with all federal laws and regulations as follows: (A) The RHCDC will comply with the requirements of the Flood Disaster Protection ACT of 1973 (42 U.S.C. 4001-4128) and the Coastal Barrier Resources Act (16 U.S.C. 3601). (B) The RHCDC will comply with the provisions of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321), and applicable related environmental authorities at 24 CFR Par 50.4, and HUD's implementing regulations at 24 CFR Part 50. (C) The RHCDC will comply with the requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 34 CFR Part 100, Part 109, and Part 110; executive Order 11063 (Equal Opportunity in Housing) and implementing regulations at CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Par 1, and will affirmatively further fair housing. Rio Hondo Community Development Corporation Community Housing Development Organization Page 4 of 18 (D) The RHCDC will comply with the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing regulations at 24 CFR Par 146, which prohibits discrimination because of age in programs and activities receiving Federal financial assistance. (E) The RHCDC will comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, and with implementing regulations at 24 CFR Part 8, which prohibit discrimination based on handicap in Federally-assisted and conducted programs and activities. (F) The RHCDC will comply with Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C.)(1701u)(Employment Opportunities for Lower Income Persons in Connection wit Assisted Projects), and with implementing regulations at 24 CFR 135. (G) The RHCDC will comply with the requirements of Executive Order 11246 (Equal Employment Opportunity) and the regulations issued under the Order at 41 CFR Chapter 60. (H) The RHCDC will comply with Executive Orders 11625, 12432, and 12138, which state that program participants shall take affirmative action to encourage participation by minority and women-owned business enterprises. (I) The RHCDC will comply with the policies, guidelines, and requirements of OMB Circular Nos. A-87 (Cost Principles Applicable to Grants, Contracts and Other Agreements with State and Local Governments), 24 CFR Par 85 (Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments), A-110 (Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations), A-122 (Cost Principles Applicable to Grants, Contracts and Other Agreements with Non-profit Institutions), and audit requirements described in OMB Circular A-128 implemented at 24 CFR Part 44 and OMB Circulars A-133 (Audits of Institutions of Higher Learning and Other Non-profit Institutions). (J) The RHCDC will provide a drug-free workplace in accordance with the Drug-Free Workplace Act of 1988 and HUD's implementing regulations at 24 CFR Part 34, Subpart F. • • Rio Hondo Community Development Corporation Community Housing Development Organization Page 5 of 18 (K) The RHCDC will comply with the requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821, et seq.) and implementing regulations at 24 CFR Part 35. (L) The RHCDC will ensure that person(s) displaced from his or her dwelling as a direct result of RHCDC housing development activities will receive benefits in compliance with the Uniform Relocation Act. (M) The RHCDC will ensure that no federally appropriate funds have been paid or will be paid by, or on behalf of the undersigned, for lobbying the Executive or Legislative Branches of the Federal Government. (Refer to the government-wide common rule governing the restrictions of lobbying, published as an interim rule on February 25, 1990 (55 F.R. 24540). (For HUD, this rule is found at 25 CFR part 87). (N) The RHCDC and its principals: (a) are not presently debarred, suspended, proposed for debarment, declared ineligible, or involuntarily excluded from covered transactions (see 24 CFR 24.110) by any Federal department or agency; (b) have not, within a three-year period preceding this application, been convicted of or had a civil judgment rendered against them for commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; (c) are not presently indicated for otherwise criminally or civilly charged by local governmental entity (Federal, State or local) with commission of any of the offenses enumerated in (b) of this certification; and (d) have not within a three-year period preceding this application had one or more public transactions (Federal State, or local) terminated for cause or default. Where the RHCDC is unable to certify to any other statements in this certification, such entity shall attach an explanation behind this page. " (0) The RHCDC will comply with State and local codes and ordinances and other applicable laws. (P) The RHCDC will comply with the Davis-Bacon Act (40 U.S.C. 276 a-5) involving projects with 12 or more units assisted with HOME funds and Section 92.354. (Q) The RHCDC agrees to comply with HOME regulations 24 CFR, Part 92 as applicable, and any amendments hereafter to the HOME regulations and/or City program guidelines. Rio Hondo Community Development Corporation Community Housing Development Organization Page 6 of 18 F. AFFIRMATIVE MARKETING: Section 1. If a project contains five (5) or more HOME assisted units, the RHCDC must take full responsibility for affirmatively marketing the housing. Section 2. Affirmative marketing steps shall consist of actions to provide information and otherwise attract eligible persons in the housing market to the available housing without regard to race, color, national origin, sex, religion, familial status or disability. G. RECORDS AND REPORTS: Section 1. The RHCDC shall maintain and, at reasonable times and places, make available to the CITY such records and accounts, including property, personnel, and financial records, the CITY and/or State and Federal agencies deem necessary to assure a proper accounting for all HOME Program funds. .Section 2. The RHCDC shall provide the CITY with information necessary for it to complete the Consolidated Annual Performance and Evaluation Review report and other reports required by HUD. Section 3. The RHCDC shall provide an annual audit report performed in compliance with OMB Circular A-133. Section 4. The RHCDC shall allow the CITY to conduct monitoring and evaluation activities as determined necessary by the CITY and HUD. Section 5. The RHCDC shall keep a fully executed copy of this Agreement and a copy of the HOME regulations on file in their place of business at all times. Section 6. The RHCDC shall keep all documents used to determine their status as a Community Housing Development Organization as defined under 24 CFR Part 92 current and available for inspection by the CITY for the duration of this Agreement. H. ENFORCEMENT OF THE AGREEMENT: Section 1. The RHCDC shall provide a means of enforcement of the affordable housing requirements that may include liens on real property, deed restrictions or covenants running with the land. Section 2. The affordability requirements on rental housing in 24 CFR 92.252 must be enforced by deed restrictions. Rio Hondo Community Development Corporation Community Housing Development Organization Page 7 of 18 Section 3. As specified above, the RHCDC shall repay its award of HOME funds in full to the CITY if the housing does not meet affordability requirements for the specified time period. 1. REQUESTS FOR DISBURSEMENT OF FUNDS: Section 1. The RHCDC shall request disbursements of HOME Program funds only at the time funds are needed to pay eligible costs. (Requested funds are limited to the amount needed to cover these costs and which can be expended within 10 days from the date funds are disbursed to the CITY from the US Treasury.) Section 2. From time to time, but not more than once each month, the RHCDC may submit to the CITY a request for reimbursement of operating expenses for the preceding calendar month, if applicable. Section 3. The CITY shall reimburse the RHCDC in an amount approved by the CITY within fifteen (15) calendar days after receipt of a request for reimbursement, except for conditions beyond the CITY's control. Section 4. For reimbursement of indirect costs, the RHCDC shall have on file a cost allocation plan approved by the CITY. Section 5. The sum total of the RHCDC reimbursement request during a given year shall not exceed the required 15% CHDO set-aside funding for any HOME grant unless otherwise agreed upon and approved by the CITY. Section 6. The RHCDC shall maintain and make available, when requested, support documentation for all expenditures. J. DURATION OF THE AGREEMENT: Section 1. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. Section 2. The Agreement and the provisions herein may be extended to cover any additional time period during which the RHCDC remains in control of HOME funds or assets, including program income. Rio Hondo Community Development Corporation Community Housing Development Organization Page 8 of 18 K. CONDITIONS FOR RELIGIOUS ORGANIZATIONS: Section 1. If applicable, the RHCDC must meet conditions and limitations for use of HOME funds involving a primarily religious entity. Section 2. The conditions are specified in 24 CFR Part 92.257. L. COMMUNITY HOUSING DEVELOPMENT ORGANIZATION PROVISIONS: Section 1. If the RHCDC should receive HOME funds only for operating expenses provided under 24 CFR 92.208, the RHCDC may' expect to receive project funding within 24 months of receiving HOME funds for those operating expenses. (Such operating expenses are limited to costs associated with HOME-eligible activities.) Section 2. If the RHCDC should receive project-specific development assistance (technical assistance and site control loans or seed money loans), that assistance is limited by provisions under 24 CFR 92.301. Section 3. The RHCDC shall notify the CITY in writing of any changes in its 501 (c)(3) tax exempt status during the specified period of affordability, or any other change that alters the organization's certification as a RHCDC under 24 CFR Part 92. M. PROGRAM INCOME DISPOSITION: Section 1. The RHCDC may retain any proceeds resulting from the RHCDC's investment of its set-aside funds. - Section 2. As such, the proceeds are not HOME program income and, therefore, are not subject to HOME requirements except those stated below. Section 3. The RHCDC must use any proceeds for HOME-eligible activities similar to those for which the allocation of HOME funds was originally made. N. CONFLICT OF INTEREST: Section 1. No employee, agent, consultant, officer, elected official or appointed official of the CITY of Rosemead who has responsibilities related to the HOME Program or access to "inside" information concerning said program shall obtain a financial benefit or interest from any HOME Program activity for themselves or those with whom they have family or business ties during their tenure or for one year thereafter. • Rio Hondo Community Development Corporation Community Housing Development Organization Page 9 of 18 Section 2. The RHCDC shall make a good faith effort to assure that this provision is not violated, and that any suspected violations are promptly reported to the CITY. 0. DEFAULT: Section 1. It is expressly agreed and understood that the RHCDC's designation as a RHCDC shall become null and void, at the CITY's option, in the event the RHCDC fails to meet one or more of the criteria for RHCDC designation and/or fails to develop, sponsor, or own one or more housing projects in conformance with 24 CFR Part92. Section 2. The CITY shall notify the RHCDC in writing of any such default under this Agreement. Section 3. The RHCDC shall have sixty (60) days after receipt of the written notice of default within which to cure such a default. Section 4. The RHCDC agrees to repay, remit or return to the CITY any amount of unspent HOME funds provided to the RHCDC in the event of a default under the terms of this Agreement. P. SUSPENSION OR TERMINATION: Section 1. Either party may terminate this Agreement at any time by giving written notice to the other party of such termination and specifying the effective date thereof at least thirty (30) days before the effective date of such termination. Section 2. The CITY may also suspend or tenninate this Agreement, in whole or in part, if the RHCDC materially fails to comply with any term of this agreement, or with any of the rules, regulations or provisions referred to herein or announced by HUD. Section 3. In the event there is probable cause to believe the RHCDC is in noncompliance with any applicable rules or regulations, the CITY may withhold said HOME funds until such time as the RHCDC is found to be in compliance by the CITY, or is otherwise determined to be in compliance. Section 4. The CITY shall advise the RHCDC in writing what action(s) must be taken for resumption of payments. Rio Hondo Community Development Corporation Community Housing Development Organization Page 10 of 18 Section 5. If this Agreement is terminated as provided herein, CITY may require RHCDC to provide all finished or unfinished Documents and Data and other information of any kind prepared by RHCDC in connection with the performance of Services under this Agreement. RHCDC shall be required to provide such document and other information within fifteen (15) days of the request. Section 6. In the event this Agreement is terminated in whole or in part as provided herein, CITY may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Q. HOLD HARMLESS: Section 1. The CITY shall not be liable for any and all claims, actions, suits, charges; and judgments whatsoever arising out of the performance or nonperformance of this Agreement by the RHCDC, its employees, officers or agents. Section 2. The RHCDC shall hold harmless, defend and indemnify the CITY, its officers, agents and employees from all such claims, actions, suits, charges, and judgments under this Agreement. R. INSURANCE. Section 1. The RHCDC shall not commence Work under this Agreement until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this section. In addition, RHCDC shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the CITY that the subcontractor has secured all insurance required under this section. Section 2. The RHCDC shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the RHCDC, its agents, representatives, employees or subcontractors. The RHCDC shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage: (A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers' Compensation • Rio Hondo Community Development Corporation Community Housing Development Organization Page I 1 of 18 and Employer's Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. (B) Minimum Limits of Insurance. RHCDC shall maintain limits no less than: (1) General Liability: $3,000,000 per occurrence for bodily injury, personal injury . and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be $3,000,000; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers' Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Section 3. The insurance policies shall contain the following provisions, or RHCDC shall provide endorsements on forms supplied or approved by the CITY to add the following provisions to the insurance policies: (A) General Liability. The general liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insured with respect to the Services or operations performed by or on behalf of the RHCDC, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self-insurance maintained by the CITY, its directors, officials, officers, employees, agents and volunteers shall be excess of the RI-ICDC's insurance and shall not be called upon to contribute with it in any way. (B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the CITY, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the RHCDC or for which the RHCDC is responsible; and (2) the insurance coverage shall be primary insurance as respects the CITY, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the RHCDC's scheduled underlying coverage. Any insurance or self- insurance maintained by the CITY, its directors, officials, officers, Rio Hondo Community Development Corporation Community Housing Development Organization Page 12 of 18 employees, agents and volunteers shall be excess of the RHCDC's insurance and shall not be called upon to contribute with it in any way. (C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the CITY, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the RHCDC. (D) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the CITY; and (B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 4. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the CITY, its directors, officials, officers, employees, agents and volunteers. Section 5. Any deductibles or self-insured retentions must be declared to and approved by the CITY. RHCDC shall guarantee that, at the option of the CITY, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its directors, officials, officers, employees, agents and volunteers; or (2) the RHCDC shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. Section 6. Insurance is to be placed with insurers with a current A.M. Best's rating no less than ANIII, licensed to do business in California, and satisfactory to the CITY. Section 7. The RHCDC shall furnish CITY with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the CITY. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the CITY if requested. All certificates and endorsements must be received and approved by the CITY before work commences. The CITY reserves the right to require complete, certified copies of all required insurance policies, at any time. Rio Hondo Community Development Corporation Community Housing Development Organization Page 13 of 18 S. AMENDMENTS: Section 1. The CITY or the RHCDC may amend this Agreement at any time provided that such amendments make specific reference to this Agreement, are executed in writing, and signed by a duly authorized representative of both organizations. Section 2. Such amendments shall not invalidate this Agreement, nor relieve or release the CITY or RHCDC from its obligations under this Agreement. Section 3. The CITY, may at its discretion, amend this Agreement to conform with Federal, State or local government guidelines, policies and available funding amounts, or for other reasons. T. MISCELLANEOUS PROVISIONS: Section 1. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: RHCDC: President Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 CITY: Director, Department of Community Development City of Rosemead 8838 East Valley Boulevard Rosemead, California 91770 Attn: CDBG Administration Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. Section 2. This Agreement creates a non-exclusive and perpetual license for CITY to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, • • Rio Hondo Community Development Corporation Community Housing Development Organization Pa,-e 14 of 18 including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by RHCDC under this Agreement. The RHCDC shall require all subcontractors to agree in writing that CITY is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. The RHCDC represents and warrants that RHCDC has the legal right to license any and all Documents & Data. The RHCDC makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than RHCDC or provided to RHCDC by the CITY. CITY shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at CITY's sole risk. Section 3. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents and Data either created by or provided to RHCDC in connection with the performance of this Agreement shall be held confidential by RHCDC. Such materials shall not, without the prior written consent of CITY, be used by RHCDC for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to RHCDC which is otherwise known to RHCDC or is generally known, or has become known, to the related industry shall be deemed confidential. RHCDC shall not use CITY's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of CITY. Section. 4: The Parties.shall fully cooperate with one. another; and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. Section 5. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action. Section 6. RHCDC shall defend, indemnify and hold the CITY, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions or willful misconduct of RHCDC, its. officials, officers, employees, agents, RHCDC's. and contractors arising out of or in connection with the Rio Hondo Community Development Corporation Community Housing Development Organization Page 15 of 18 performance of this Agreement, including without limitation the payment of all consequential damages and attorneys fees and other related costs and expenses. RHCDC shall defend, at RHCDC's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against CITY, its directors, officials, officers, employees, agents or volunteers. RHCDC shall pay and satisfy any judgment, award or decree that may be rendered against CITY or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. RHCDC shall reimburse CITY and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. RHCDC's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the CITY, its directors, officials, officers, employees, agents or volunteers. Section 7. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties. Section 8. This Agreement shall be governed by the laws of the State of California. Venue shall be in Los Angeles County. Section 9. This Agreement shall be binding on the successors and assigns of the Parties. Section 10. RHCDC shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the CITY. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Section 11. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed, calendar days and not work days. All references to RHCDC include all personnel, employees, agents, and subcontractors of RHCDC, except as otherwise specified in this Agreement. All references to CITY include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. Rio Hondo Community Development Corporation Community Housing Development Organization Page 16 of 18 Section 12. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Section 13. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. Section 14. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. Section 15. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. Section 16. RHCDC maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for RHCDC, to solicit or secure this Agreement. Further, RHCDC warrants that it has not paid nor has it agreed to pay an}, company or person, other than a bona fide employee working solely for RHCDC, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. RHCDC further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the CITY's Filing Officer as required under state law in the performance of the Services. 'For breach or violation of this warranty, CITY shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of CITY, during the term of his or her service with CITY, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. Section 17. RHCDC represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. RHCDC shall also comply with all relevant provisions of CITY's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. Section 18. By its signature hereunder, RHCDC certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in Rio Hondo Community Development Corporation Community Housing Development Organization Page 17 of 18 accordance with the provisions of that Code, and agrees to, comply with such provisions before commencing the performance of the Services. Section 19. RHCDC has all requisite power and authority to conduct its business and to execute; deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. Section 20. This Agreement may be signed in counterparts, each of which shall constitute an original. U. SUBCONTRACTING. Section 1. RHCDC shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of CITY. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. IN WITNESS WHEREOF, the CITY and RHCDC have executed this Agreement on the date first herein above written. CITY OF ROSEMEAD RIO HONDO COMMUNITY DEVELOPMENT CORPORATION BY: Attest: By• BY: 6x~c-d~ Q .Lsewlz-~ Donna L. Duncan PRESIDENT CITY CLERK :r A " Rio Hondo Community Development Corporation Community Housing Development Organization Page 18 of 18 Approved as to Form: By: J ontes CITY ATTRONEY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF ROSEMEAD 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Michelle Ramirez 05129/08- 111111111111111111111 hil 1111111111111 20080944596 Exempt from Recording Fee per Government Code Section 27383 3 o Z3 R z (SPACE ABOVE THIS LINE RESERVED FOR RF,CODER'S USE) ~SG~ _ zZ ,r~ Z DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (RIO HONDO CDC: RENTAL HOUSING PROPERTY) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ("Deed of Trust") is made as of April 22, 2008, by the Rio Hondo Community Development Corporation, a California public benefit corporation (hereinafter referred to as "Trustor"), whose address is 11401 Valley Boulevard, Suite 201, El Monte, California 91731, to United Title Company, whose address is 500 North Brand Boulevard, Suite 1150, Glendale, California 91203 (hereinafter referred to as "Trustee"), for the benefit of the City of Rosemead ("City") and the Rosemead Community Development Commission ("CDC"), a municipal corporation, its successors and assigns (herein called `Beneficiaries"), whose address is 8838 E. Valley Boulevard, Rosemead, California 91770. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, and for the purpose of securing, in such priority as Beneficiaries may elect, each of the following: 1. The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in that certain Promissory Note of even date herewith in the principal amount not to exceed Four Hundred Fifty-Seven Thousand Eight Hundred Ninety-Nine Dollars ($457,899), together with interest thereon specified therein, executed by Trustor, as maker, to the order of Beneficiaries and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Promissory Note or otherwise; and 2. The payment of all other sums, with interest thereon at the rate of interest provided for herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of Trust, the Loan Agreement dated as of April 22, 2008, by and between Trustor and the Beneficiaries or any other instrument or instruments heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note; and 3. The payment of such additional sums and interest thereof which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiaries, whether or not evidenced by a promissory note or notes which are secured by this Deed of Trust; and • • 3 4. The due, prompt and complete observance, performance and discharge of each and every obligation, covenant and agreement of Trustor contained in the Loan Agreement, the Promissory Note, this Deed of Trust or any other Loan Document. TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain,.sell, convey and assign to Trustee, in trust, with power of sale and right of entry and possession, and does grant to Beneficiaries a security interest for the benefit and security of Beneficiaries under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Property" whether now owned or held or hereafter acquired and wherever located, including any and all substitutions, replacements and additions to same: (a) That certain real property located in Los Angeles County, State of California, and more particularly described in Exhibit "A", attached hereto and incorporated herein by this reference, together with all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including specifically but not limited to all appurtenant water, water rights and water shares or stock of Trustor, any and all general intangibles relating to the use and/or development of the real property, including development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, surveys and/or soil and substrata studies, and all other rights, privileges and appurtenances related to the said real property and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired; (b) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the real property described in Exhibit "A" (hereinafter referred to as the "Improvements"), including all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of said structures, buildings, improvements on the real property described in Exhibit "A" or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the real property described in Exhibit "A" as between the parties hereto and all persons claiming by, through or under such parties except that same shall not include such machinery and equipment of Trustor, its contractors or subcontractors, or any tenant of any portion of the real property described in Exhibit "A" or Improvements, which is part of and/or used in the conduct of the normal business of Trustor or its tenant conducted upon the real property described in Exhibit "A„ (c) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, other than personal property which is or at any time has become toxic waste, waste products or hazardous substances, including without limitation all installations, shelving, partitions, door-tops, vaults, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, drapery rods and brackets, screens, water heaters, wall coverings, carpeting, linoleum, tile, other floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of property, the specific enumerations herein not excluding the general, now or at any time hereafter placed upon or used in any way in connection with the ownership, operation or maintenance of the real property described in Exhibit "A" or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the real property described in Exhibit "A" and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, real property described in Exhibit "A" shall not include (i) personal property which may be owned by lessees or other occupants of the real property described in Exhibit "A"; (ii) inventory of any lessee or occupant of the real property described in Exhibit "A" used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the real property described in Exhibit "A" only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or proper maintenance, of the real property described in Exhibit "A"; (d) All right, title and interest of Trustor, now owned or hereafter acquired in and to and lying within the right-of-way of any street, road, alley or public place, opened or proposed,.vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the real property described in Exhibit "A" or now or hereafter used in connection with or now or hereafter belonging or appertaining to the real property described in Exhibit "A"; and all right, title and interest in the Trustor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the real property described in Exhibit "A"; (e) All judgments, awards of damages, settlements and any and all proceeds derived from such hereafter made as a result of or in lieu of any taking of the real property described in Exhibit "A" or any part thereof, interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the real property described in Exhibit "A" or the Improvements thereon, including change of grade of streets, curb cuts or other rights of access for any public or quasi-public use or purpose under any law; (f) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the real property described in Exhibit "A", or arising from any lease or similar agreement pertaining thereto and all right, title and interest of Trustor in and to all leases of the real property described in Exhibit "A" now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Trustee or Beneficiaries may demand, sue for and recover such payments but shall not be required to do so; and (g) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims. • S Trustor makes the foregoing grant to Trustee for the purposes herein set forth; provided, however, that if the Trustor shall pay or cause to be paid to the holder of the Promissory Note all amounts required to be paid under the provisions of the Promissory Note, this Deed of Trust or any other Loan Documents, and at the time and in the manner stipulated therein, and shall further pay or cause to be paid all other sums payable hereunder and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of the Trustee and Beneficiaries in the Property shall cease, determine and become void, and upon proof being given to the satisfaction of the Beneficiaries that all amounts due to be paid under the Promissory Note have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustee or Beneficiaries, and of any other sums as herein provided, the Trustee shall, upon receipt of the written request of the Beneficiaries, cancel, reconvey and discharge this Deed of Trust. TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. To protect the security of this Deed of Trust, Trustor agrees: I. Trustor's Covenant of Payment. Trustor shall perform all of its obligations under the Loan Agreement, the Promissory Note and this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay the Loan and all other debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 2. Trustor's Warranties of Title. Trustor warrants to Beneficiaries that they are the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except as otherwise provided in this section, or approved in writing by Beneficiaries, and the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiaries' prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiaries' interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 3. Trustor's Right to Contest Statutory Liens. As used herein the words "mechanic's lien" and "materialman's lien" mean and include a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing ofa mechanic's or materialman's lien against the Property or a stop notice against the Trustor or the Beneficiaries and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a California admitted surety acceptable to Beneficiaries in an amount not less than the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a 4 court order to release said lien of record; (c) Trustor provides to Beneficiaries and pays for an endorsement to Beneficiaries' title insurance policy, in a form satisfactory to Beneficiaries, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Truster pays in full any judgment rendered for the lien claimant within ten (10) days following entry of any suchjudgment. 4. RESERVED - NO TEXT]. 5. Maintenance and Inspection of Improvements. Trustor shall maintain the buildings and other improvements now or hereafter located on the Property in a good and reasonable condition and state of repair. Truster shall not commit or suffer any waste; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof; and shall pay all fees or charges of any kind in connection therewith. 6. Construction and Repairs. Trustor shall complete or restore promptly and in a good and workmanlike manner any building or improvement that may be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7. Alterations. No building or other improvement on the Property shall be structurally altered, removed or demolished without the Beneficiaries' prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiaries' prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiaries. 8. Compliance With Laws. Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any improvements on or related to the Property, Truster shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenants. Representations. Warranties and Indemnity. C~ (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any improvements on or about the Property. (b) Trustor shall, at its sole expense, comply and cause each tenant leasing space within the Property to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined herein below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for 4 5 the Property to assure and monitor continued compliance by Truster and each tenant leasing space in the Property with all such laws, regulations, codes and ordinances. CJ Ci} (c) Truster agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, certifying that the Property is not now being used nor has it ever been used for any Environmental Activities. Beneficiaries reserve the right, in their reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property for Hazardous Materials. Truster hereby grants to Beneficiaries, their agents, employees, consultants and contractors the right to enter upon the Property to perform such tests as are reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiaries of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiaries a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiaries a final written environmental report, setting forth a detailed description of such event or situation and the action that Truster proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiaries may reasonably request. The plan shall be subject to Beneficiaries' written approval, which approval may be granted or withheld in Beneficiaries' sole but reasonable discretion. Beneficiaries shall notify Truster in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiaries. If Beneficiaries disapprove the plan, Beneficiaries' notice to Trustor of such disapproval shall include a brief explanation of the reasons therefor. Truster shall submit to Beneficiaries a revised final written environmental plan that remedies the defects identified by Beneficiaries as reasons for Beneficiaries' disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiaries within said thirty (30) day period, or if such revised plan is submitted to Beneficiaries and Beneficiaries disapproves said plan, such failure or disapproval shall, at Beneficiaries' option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiaries do not notify Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Truster shall provide written notice to Beneficiaries of Beneficiaries' failure to respond, at which time Beneficiaries shall have an additional forty-five (45) days after receipt of such notice from Truster to notify Truster of their approval or disapproval of the final plan within said additional forty-five (45) day period. If Beneficiaries fail to notify Truster of their disapproval or approval of said plan within said forty-five (45) day period the plan shall be deemed approved. Once any such plan is approved in writing or deemed approved by Beneficiaries, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiaries, and shall diligently and continuously pursue such action to completion in strict accordance with the terms of said plan. The rights of Beneficiaries with respect to the approval or disapproval of the environmental plan set forth herein and the actions of Beneficiaries pursuant to such rights are not intended to, and shall not, in and of themselves, confer on Beneficiaries a right to 6 0 e manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Property. Beneficiaries reserve the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property. Trustor hereby grants to Beneficiaries, their agent, employees, consultants and contractors the right to enter upon the Property and to perform such tests as Beneficiaries deem are necessary to conduct such a review and/or investigation. Beneficiaries shall hold in confidence any report delivered by Trustor to Beneficiaries pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiaries to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiaries, (c) regulatory officials having jurisdiction over Beneficiaries who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiaries' or any participant's interests hereunder. "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by-products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and l; publications promulgated pursuant to said laws. SXi~ "Environmental Laws" as used herein shall mean all laws, rules, regulations and ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and w, groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. 4ry 7 "Environmental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. (f) Truster hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiaries' choice), Beneficiaries, their successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee", and collectively, the "Indemnitees") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiaries: (i) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or on, in, under or affecting all or any portion of any property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Property or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Property or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Property including, without limitation, all Environmental Laws; (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters described herein in connection with the Property or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Property or any other property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (vi) Any past, present or future presence, permitting, operation, closure, abandonment or removal from the Property of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Property or any portion thereof, talk 8 C~? 11~ (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the . release or discharge of Hazardous Materials on, in, under or affecting the Property or into the air, any body of water, any other public domain or any property adjacent or proximate to the Property; (viii) Any failure of any Hazardous Materials generated or moved from the Property to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust. The indemnity contained herein shall terminate and be of no further force and effect, if no Claim is pending, upon the repayment of the Loan in accordance with its terms. (g) Trustor hereby represents and warrants as follows: (i) The Property is not and has not been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Property is in compliance with all Environmental Laws; (iii) Truster has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims") pending or threatened against Truster or any previous owner or user of the Property (and relating to Trustor's and/or such previous owner's or user's ownership of the Property), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Truster has not received any written notice (i) pursuant to which the Property has been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Property will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be designated as "border zone property." The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 10. Insurance 10.1. Casualty Insurance. Trustor shall at all times keep the Property insured for the ay benefit of Trustee and Beneficiaries as follows, despite governmental requirements that may t PY 0"i 9 detrimentally affect Trustor's ability to obtain or may materially increase the cost of such insurance coverage: 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Property, with a deductible amount not to exceed an amount satisfactory to Beneficiaries; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiaries; 10.1.3. Against damage or loss by flood, if the Property is located in an area identified by the Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiaries may require; 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiaries may require; 10.1.5. During any alteration, construction, or replacement of improvements on the Property, or any substantial portion thereof, a Builder's All Risk policy with extended coverage with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the improvements on the Property with provision for replacement with the coverage described in Section 10.1.5, without gaps or lapsed coverage, for any completed portion of improvements on the Property and workers' compensation, in statutory amounts; and 10.1.6. Against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiaries, if such insurance is required by Beneficiaries in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Property is located. 10.2. Liability Insurance. Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiaries against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Property, or any street, drive, sidewalk, curb, or passageway adjacent to it, in standard form and with such insurance company or companies and in an amount of at least $2,000,000 combined single limit, or such greater amount as Beneficiaries may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such coverage or its amount shall in no way limit such indemnification). 10 10.3. Other Insurance. Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Property, as (a) may be required by the terms of any construction contract for any improvements on the Property or by any governmental authority, other than Beneficiaries or (b) may be reasonably required by Beneficiaries from time to time. 10.4. Form of Policies. All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiaries from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiaries shall approve in Beneficiaries' sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiaries, each insurer shall have a Best Insurance Guide, current edition, rating of at least A(viii), or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiaries; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name Beneficiaries and Trustee as insureds; and (d) include such deductibles as Beneficiaries may approve. If a policy required under this paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiaries. 10.5. Duplicate Originals or Certificates. Duplicate original policies evidencing the insurance required under this Section 10 and any additional insurance that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiaries and, in addition, Trustor shall deliver to Beneficiaries (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Beneficiaries of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiaries under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Trustor may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiaries' reasonable judgment, is sufficient to allow Beneficiaries to ascertain whether such policies comply with the requirements of this Section 10. 10.6. Increased Coverage. If Beneficiaries determine that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiaries, procure such additional coverage as Beneficiaries may require in Beneficiaries' sole and absolute discretion. 10.7. No Separate Insurance. Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section 10, unless endorsed in favor of Trustee and Beneficiaries, as required by this Section 10 and chi otherwise approved by Beneficiaries in all respects. 10.8. Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Trustor's i~ j obligation to repay the Loan, all right, title, and interest of Trustor in and to all insurance policies 6n required under this Section 10 or otherwise then in force with respect to the Property and all 4t7 I 1 proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 10.9. Replacement Cost. For purposes of this Section 10, the term "full insurable value" means the actual cost of replacing the Property in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiaries' request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiaries. Trustor shall pay the cost of such appraisal. 10.10. Approval Not Warranty. No approval by Beneficiaries of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiaries as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11. Beneficiaries' Right To Obtain Insurance. Trustor shall deliver to Beneficiaries original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiaries or if any such policy is canceled, whether or not Beneficiaries have the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiaries, without notice to or demand on Trustor, may (but are not obligated to) obtain such insurance insuring only Beneficiaries and Trustee with such company as Beneficiaries may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor. Trustor acknowledges that, if Beneficiaries obtain insurance, it is for the sole benefit of Beneficiaries and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiaries to protect Truster in any way. 10.12. Duty To Restore After Casualty. If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Property, Trustor shall immediately give notice of such loss or damage to Beneficiaries and, if Beneficiaries so instruct, shall promptly, at Trustor's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repaid, replace, and rebuild the Property as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction. 11. Assignment of Insurance and Condemnation Proceeds. Should the Property or any part or appurtenance thereof or right or interest therein be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiaries or Trustee may, at their option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief therefor. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Property, are hereby assigned to Beneficiaries, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiaries any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiaries and all refunds or rebates made of taxes or assessments on the Property, and 12 0 0 A Beneficiaries may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiaries shall be deemed to be held in trust and Beneficiaries may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiaries or Trustee may require. 12. Use of Insurance Proceeds. After any damage by casualty to the Property, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiaries generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Property. Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiaries shall make available to Trustor proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (i) There exists no default under the Loan Agreement, this Deed of Trust or the Promissory Note at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiaries of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiaries of proof reasonably satisfactory to Beneficiaries that there exists and will continue to exist, until the Property is reasonably expected to be restored and fully occupied, a source of funds sufficient to pay the Loan as and when due. Such computation shall include Beneficiaries' estimate of the amount necessary to pay all of Trustor's operating expenses and pay all of the sums due on the Loan over the projected period of reconstruction, and Beneficiaries may require Trustor to establish and fund a holdback account up to the amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Loan; 13 1S (iv) Receipt by Beneficiaries from Trustor of sufficient cash funds to cover one hundred percent (100%) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiaries in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiaries with said amount and any interest earned thereon shall be released to Beneficiaries, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiaries. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Loan; (v) Receipt by Beneficiaries of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiaries in writing stating that the work described in the Trustor's certificate is adequate to restore the Property to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (vi) Such additional conditions as may reasonably be imposed by Beneficiaries to provide assurance that the Proceeds will be used to restore the Property to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiaries' prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiaries shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiaries' discretion, be subject to reasonable holdbacks required by Beneficiaries, not exceeding ten percent (10%) of the total estimated cost of completion and which will be released upon lien-free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiaries' written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiaries in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiaries in connection with its construction loans, no defaults or misrepresentations of Trustor and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiaries. Trustor shall, during the progress of the work, also submit to the Beneficiaries, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiaries furnished by an architect or engineer approved by Beneficiaries in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of the period covered by any other such certificate; and 14 (c) After completion of the restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Loan Agreement, this Deed of Trust or the Promissory Note, Beneficiaries shall pay to Trustor (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiaries upon delivery to Beneficiaries of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer approved by Beneficiaries confirming that the Property has been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Property for its intended purposes and use. If: (i) any of the conditions in subparagraph 12(b), above, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note; or (ii) Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) Trustor is otherwise in default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements set forth therein or herein, then in any such event Beneficiaries may, at their option, apply the Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiaries under the Loan and all other debts of Trustor to Beneficiaries are discharged, Beneficiaries shall not have the right to require the Property to be repaired under the terms of this Deed of Trust, but Beneficiaries' rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Trustor shall not commence any repairs or reconstruction of any casualty until Beneficiaries consent in writing thereto, which consent may be withheld by Beneficiaries in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Trustor to subject the Property to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph 12. i In any event in which the Beneficiaries are not otherwise obligated to authorize the insurance proceeds to be applied to the restoration of the Property as hereinabove described and, at the option of Beneficiaries, the proceeds of a loss under any policy, whether or not endorsed payable C7 to Beneficiaries, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on U1 the Property, without in any way affecting the enforceability or priority of the lien of this Deed of 15 1~ r Trust or the obligation of the Trustor or any other person for payment of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards. Should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Truster agrees that Beneficiaries shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Truster agrees to pay Beneficiaries' costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiaries toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiaries, renders or will render the Property not economically viable or which substantially impairs Beneficiaries' security or lessens to any extent the value, marketability or intended use of the Property, Beneficiaries may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiaries may determine. Truster agrees to execute such further assignments of condemnation proceeds as Beneficiaries or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Loan plus all other sums due to Beneficiaries from Trustor shall be paid to Truster or Truster's assignee. 14. Property Taxes and Assessments. Trustor shall pay in full on or before the due date thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiaries with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts. Trustor agrees to consent to inclusion of the Property in any local improvement or special assessment district and to the imposition of any special or local improvement assessment against the Property, upon the Beneficiaries' written request. 16. Mortgage Taxes. In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiaries or any payments secured hereby, Truster shall bear and pay the full amount of such taxes. 17. Special Assessment and Insurance Reserves. Trustor shall, at the request of the Beneficiaries, pay to Beneficiaries equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiaries next to become due, in addition to any other periodic payment or performances owed by Trustor under the Loan Agreement, the Promissory Note or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment thereof, Beneficiaries will have on hand an amount sufficient to pay the next maturing assessments and insurance premiums. The amount of the additional payment to be made on account of 16 assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiaries deem necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiaries of annual requirements. To the extent permitted by applicable law, all monies paid to.Beneficiaries on account of assessments or insurance premiums may be commingled and invested with Beneficiaries' own funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiaries shall not exercise the rights granted in this paragraph so long as all of the following conditions are met: (a) There is no other default under the Loan Agreement, this Deed of Trust or the Promissory Note; and (b) Trustor pays all assessments and insurance premiums prior to delinquency. Upon Trustor's failure to comply with either of the conditions (a) and (b), above, Beneficiaries may, at their option, then or thereafter exercised, require Trustor to pay the additional sums described in this paragraph. 18. Trustor's Right to Contest Taxes. Trustor shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 19. Report of Real Estate Transaction. Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiaries, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this paragraph are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiaries. 20. Leases/Rental Agreements. With respect to any leases and/or rental agreements currently or hereafter relating to any portion of the Property, Trustor agrees that: . (a) Trustor shall take all reasonable measures to cause each dwelling unit on the Property to be made available for rent and occupancy by a "low- or moderate-income household" as this term is defined in the HOME Investment Partnerships Regulations. For purposes of this subparagraph (a), compliance by the Trustor of the applicable provisions of the HOME Regulatory Agreement of even date herewith relating to the rental and occupancy 17 of each such dwelling unit on the Property shall be deemed to be compliance with the provisions of this subparagraph (a); (b) Each lease or rental agreement for each dwelling unit on the Property shall comply with the covenants of the Trustor under the Loan Agreement, this Deed of Trust the Promissory Note and the HOME Regulatory Agreement of even date herewith; (c) Trustor shall fully comply with all of its obligations under all leases or rental agreements on the Property so that the same shall not become in default and shall do all that is necessary to preserve the same in force; (d) Truster shall not permit an assignment of any leases, or any subletting thereunder: and (e) Beneficiaries and their successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interests following any foreclosure or trustee's sale hereunder. 21. Collateral Assignment of Leases and Rents to Beneficiaries. Truster hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiaries confer upon Truster a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiaries upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiaries may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiaries upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Loan Agreement or the Promissory Note, and Beneficiaries shall, in their sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiaries shall determine. In the event the Beneficiaries exercise or are entitled to exercise any of their rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Loan Agreement, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiaries shall have, and are hereby assigned by Trustor, all of the rights that would otherwise inure to the benefit of Trustor in such proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to compel assumption or rejection of any such lease and to seek such claims and awards as may be 18 sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiaries in writing, Beneficiaries' exercise of any of the rights provided in this paragraph shall. preclude Truster from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiaries any duty to produce rents from the Property, and such assignment shall not cause Beneficiaries to be a "mortgagee in possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiaries in any separate assignment of leases and rents. 22. Impairment of Security. Trustor shall not, without first obtaining Beneficiaries' written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiaries' lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiaries, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non-conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits. Truster shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiaries or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Truster is ultimately found liable for any negligence or other wrongful conduct or inaction. Truster, following mutual negotiations with Beneficiaries, has waived and does hereby waive any immunity to such liability to Beneficiaries under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiaries' rights against Truster. Should Beneficiaries elect to appear in or defend any such action or proceeding or be made a party to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiaries and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Truster shall pay costs of suit, cost of evidence of title expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiaries to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. 24. Due on Sale and Sale of Premises or Additional Financing Not Permitted. Trustor specifically agrees that: 19 • 0 (a) In order to induce Beneficiaries to make the loan secured hereby, Trustor agrees that if the real property described in Exhibit "A" or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered with financing other than that secured hereby or otherwise alienated by Trustor whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or without the prior written consent of Beneficiaries, then Beneficiaries, at their option, may declare the Promissory Note secured hereby and all other obligations hereunder to be forthwith due and payable. Except as shall be otherwise specifically provided herein, any (a) change in the legal or equitable ownership of the real property described in Exhibit "A" whether or not of record, or (b) change in the form of entity or ownership (including the hypothecation or encumbrance thereof) of any ownership interest in Trustor shall be deemed a transfer of an interest in the real property described in Exhibit "A"; provided, however, that any transfer of the real property described in Exhibit "A" or any interest therein to an entity which controls, is controlled by, or is under common control with Trustor shall not be considered a transfer hereunder. In connection herewith, the financial stability and managerial and operational ability of Trustor is a substantial and material consideration to Beneficiaries in their agreement to make the loan to Trustor secured hereby. The transfer of an interest in the real property described in Exhibit "A" may materially alter and reduce Beneficiaries' security for the indebtedness secured hereby. Moreover, Beneficiaries have agreed to make its loan based upon the presumed value of the real property described in Exhibit "A" and the rents and profits thereof. Therefore, it will be a diminution of Beneficiaries' security if junior financing, except as shall be permitted by Beneficiaries, or if other liens or encumbrances should attach to the real property described in Exhibit "A". C! Cz7 (b) Trustor may request Beneficiaries to approve a sale or transfer of the real property described in Exhibit "A" to a parry who would become the legal and equitable owner of the real property described in Exhibit "A" and would assume any and all obligations of Trustor under the Loan Documents (the "Purchaser"). Beneficiaries shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Beneficiaries may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the real property described in Exhibit "A", or any part thereof, becomes vested in a person or persons other than Trustor, the Beneficiaries may deal with such successor or successors in interest with reference to the Note or this Deed of Trust in the same manner as with Trustor, without in any way releasing, discharging or otherwise affecting the liability of Trustor under the Promissory Note, this Deed of Trust or the other Loan Documents. No sale of Trustor's interest in the real property described in Exhibit "A", no forbearance on the part of Beneficiaries, no extension of the time for the payment of the Deed of Trust indebtedness or any change in the terms thereof consented to by Beneficiaries shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of the Trustor herein, either in whole or in part. Any deed conveying the real property described in Exhibit "A", or any part thereof, shall provide that the grantee thereunder assume all of Trustor's obligations under the Note, this Deed of Trust and all other Loan Documents. In the event such deed shall not contain such assumption, Beneficiaries shall have all rights reserved to it hereunder in the event of a default or if Beneficiaries shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the real property described in Exhibit "A" or such portion thereof subject to this Deed of Trust. Nothing contained in this section shall be construed to waive the restrictions against the transfer of the real property described in Exhibit "A" ti~ 20 contained in paragraph 24(a). 25. Further Encumbrances. Trustor acknowledges that Beneficiaries relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiaries in bankruptcy; the risks to Beneficiaries in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiaries' rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiaries' option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiaries' requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiaries to make the Loan secured by this Deed of Trust, and with the knowledge that Beneficiaries will materially rely upon this paragraph in so doing, Trustor covenants not to further encumber the Property without first receiving Beneficiaries' express written consent in each instance, which consent may be withheld by Beneficiaries in their sole discretion: A breach of this covenant shall constitute a default under the Loan Agreement and this Deed of Trust, and Beneficiaries may exercise all remedies available to Beneficiaries under the Loan Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgage, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiaries shall encumber the Property, except for that certain purchase money subordinate deed of trust of even date herewith by and among the Trustor, the City and the Trustee in the original principal amount of $457,899 to which the Beneficiaries hereby consent as a subordinate security interest to this Deed of Trust. 26. RESERVED-NO TEXT. 27. Event of Default. An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfy any performance or payment obligation required under the HOME Regulatory Agreement, the subordinate deed of trust referenced in paragraph 25 of this Deed of Trust, the Loan Agreement or the Promissory Note when due; (b) Failure ofTrustor to properly perform its obligations under this Deed of Trust, the Loan Agreement or the Promissory Note by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty (30) days from the date of such notice, and shall be determined by Beneficiaries in their sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice may be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the notice; 21 • • (c) The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by Beneficiaries) portion of the Property; (d) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is herein called the "Bankruptcy Code"), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (e) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the Property, of any other real property of Trustor, of any other significant asset of Trustor, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (f) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Trustor or any other person under this Deed of Trust or as security for performance or payment of the Loan, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets; (g) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (h) The determination by Beneficiaries that any representation, warranty or statement contained in this Deed of Trust or the Loan Agreement or in any other writing delivered to Beneficiaries in connection with the Loan or the Promissory Note was incomplete, untrue or misleading in any material respect as of the date made; (i) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiaries the payment of the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiaries' interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Loan Agreement or the Promissory Note or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiaries by reason of their ownership of this Deed of Trust, the Loan T ? 22 • • `LEI Agreement or the Promissory Note and, in such event, Truster, after demand by Beneficiaries, does not pay such taxes or assessments or reimburse Beneficiaries therefor or, in the opinion of counsel for Beneficiaries, it might be unlawful to require Truster to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law; 0) The occurrence of a default by Trustor under any of the contracts and agreements assigned to Beneficiaries under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other party thereto; and (k) Trustor acknowledges and agrees that all material non-monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiaries shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non-monetary default. 28. Rights and Remedies on Default. Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiaries may exercise any one or more of the following rights and remedies: (a) Loan Agreement. Beneficiaries may exercise any right or remedy provided for in the Loan Agreement or the Promissory Note; (b) Acceleration. Beneficiaries may declare the Loan and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) Foreclosure Rights. Beneficiaries may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a 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 in case of foreclosure by exercise of the power of sale herein. Should Beneficiaries elect to foreclose by exercise of the power of sale herein, Beneficiaries shall also deposit with Trustee this Deed of Trust, the documents evidencing the Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale at public auction to the highest bidder upon any terms and conditions specified by Beneficiaries and permitted by applicable law. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness 23 thereof. Any person, including Trustor, Trustee or Beneficiaries, may purchase all or any portion of the Property, as applicable, at sale. (d) Right to Rescind. Beneficiaries, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiaries of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiaries to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Loan Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) UCC Remedies. Beneficiaries shall have all the rights and remedies under this Deed of Trust as a secured party under the California Uniform Commercial Code, including, without limitation, Section 9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiaries at a place to be designated by Beneficiaries that is reasonably convenient to both parties. Upon repossession, Beneficiaries may propose to retain the collateral in partial satisfaction of the Loan or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiaries dispose of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the like; (ii) to the reasonable attorneys' fees and legal expenses incurred by Beneficiaries; and (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. CID Cat (f) Remedial Advances. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiaries or Trustee, without obligation so to do and without demand upon Truster and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiaries or Trustee being authorized to enter upon the Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiaries or Trustee, (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, 24 or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiaries shall be subrogated to the rights and lien interests of any person who is paid by Beneficiaries pursuant to the terms of this paragraph. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiaries, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment thereof shall be secured hereby. (g) Summary Possession. Beneficiaries may, at their option, either in person or by agent, employee or court-appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Truster. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (h) Collection of Rents. Beneficiaries may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiaries, regardless of whether Beneficiaries has taken possession of the Property. If any rents are collected by Beneficiaries, then Trustor hereby irrevocably designates Beneficiaries as Trustor's attorney- in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Beneficiaries in response to Beneficiaries' demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiaries may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) Beneficiaries' Enforcement of Leases. Beneficiaries are hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court-appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Loan Agreement. Trustor hereby grants to Beneficiaries full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessaryto protect the value, priority or enforceability of fp any security for the obligations of the Truster under the Loan Agreement and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiaries, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, j~ rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any Cq tP~ 25 principal and interest payments due from Truster to Beneficiaries under the Loan Agreement, the Promissory Note and this Deed of Trust, all in such order as Beneficiaries may determine. Beneficiaries shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiaries nor shall it operate to make Beneficiaries liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiaries after taking possession of the Property hereunder. 0) Beneficiaries' Enforcement of Contracts. Beneficiaries shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiaries or, at Beneficiaries' option, in the name ofTrustor, in the event any architect, engineer, contractor or other parry breaches their respective contract or contracts, regardless of whether Beneficiaries acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiaries as its attorney-in-fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiaries do not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiaries be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiaries in writing, following any default by Trustor under the Loan Agreement or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiaries in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiaries under the Loan Agreement and Promissory Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Loan. (k) Appointment of Receiver. Beneficiaries have the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the C7 receivership, against the Loan. The receiver may serve without bond, if permitted by law. Beneficiaries' right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. Employment by Beneficiaries shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiaries may: (i) use, I operate, manage, control and conduct business on the Property and make expenditures for all 0-1 maintenance and improvements as in its judgment are necessary and proper; (ii) collect the 26 C~ • 0 income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiaries' option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiaries deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiaries or otherwise, as Beneficiaries may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall. be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become apart of the debt secured by this Deed of Trust. (1) Specific Enforcement. Beneficiaries may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Truster waives any requirement of the posting of any bond in connection therewith. (m) General Creditors-Remedies. Beneficiaries shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof. 29. Application of Sale Proceeds. After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiaries and any other person or persons legally entitled thereto. 30. Remedies Cumulative. No remedy herein conferred upon or reserved to Trustee or Beneficiaries is intended to be exclusive of any other remedy provided herein or under the Loan Agreement or the Promissory Note, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Loan, but each shall be cumulative and shall be in addition to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiaries or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiaries and either of them may pursue inconsistent remedies. 31. No Waiver. No waiver of any default or failure or delay to exercise any right or remedy by Beneficiaries shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. Marshaling. In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one parcel. Neither Trustee nor Beneficiaries shall be required to marshal Trustor's assets. 33. SUBMISSION TO JURISDICTION. Z~ 27 (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARIES TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BENEFICIARIES OR TRUSTOR, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. 34. Truster's Indemnification. Trustor agrees to indemnify and hold harmless Trustee and Beneficiaries from and against any and all losses, liabilities, penalties, claims, charges, costs and expenses (including attorneys' fees and disbursements) (the "Losses") that may be imposed on, incurred or paid by or asserted against Trustee and/or Beneficiaries by reason or on account of, or in connection with: (a) any default by Trustor hereunder or under the Loan Agreement; (b) Trustee's and/or Beneficiaries' good faith and commercially reasonable exercise of any of their rights and remedies or the performance of any of their duties hereunder or under any other documents to which Truster is a party; (c) the construction, reconstruction or alteration of the Property; (d) any negligence, willful misconduct or failure to act of Trustor, or any negligence, willful misconduct or failure to act of any lessee of the Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; or (e) any accident, injury, death or damage to any person or property occurring in, on or about the Property or any street, drive, sidewalk, curb or passageway adjacent thereto, except for the willful misconduct or gross negligence of the indemnified person. Any amount payable to Trustee, Beneficiaries or counsel for Beneficiaries under this paragraph shall be due and payable within ten (10) days after demand therefor and receipt by Truster of a statement from Trustee, Beneficiaries and/or counsel for Beneficiaries setting forth in reasonable detail the amount claimed and the basis therefor, and such 21 28 • amounts shall bear interest at the rate of 10% per annum from and after the date such amounts are paid by Beneficiaries, Trustee or counsel for Beneficiaries, until paid in full by Truster. Trustor's obligations under this paragraph shall not be affected by the absence or unavailability of insurance covering the same or by the failure or refusal by any insurance carrier to perform any obligation on its part under any such policy of insurance. If any claim, action or proceeding is made or brought against Trustor and/or Beneficiaries that is subject to the indemnity set forth in this paragraph, Truster shall resist or defend against the. same, if necessary, in the name of Trustee and/or Beneficiaries, with attorneys for Trustor's insurance carrier (if the same is covered by insurance) or otherwise by attorneys approved by Beneficiaries. Notwithstanding the foregoing, Trustee and Beneficiaries, in their reasonable discretion, may engage their own attorneys to resist or defend, or assist therein, and Trustor shall pay, or, on demand, shall reimburse Trustee and Beneficiaries for the payment of the reasonable fees and disbursements of said attorneys. The indemnity provided for herein shall survive Trustor's payment of the Loan secured by this Deed of Trust and foreclosure, whether by judicial foreclosure, power of sale pursuant to this Deed of Trust or by deed in lieu of foreclosure. 35. Attorneys' Fees; Costs. Trustor agrees to reimburse Beneficiaries for all costs, expenses expert witness and consulting fees and reasonable attorneys' fees that Beneficiaries incur in connection with the realization or enforcement of any obligation or remedy contained in this Deed of Trust, the Loan Agreement or the Promissory Note, with or without litigation, including without limitation any costs, expenses and fees incurred: (a) on appeal; (b) in any arbitration or mediation; (c) in any action contesting or seeking to restrain, enjoin, stay, or postpone the exercise of any remedy in which Beneficiaries prevails; (d) in any bankruptcy, probate, receivership or other proceeding involving Trustor; and (e) in connection with all negotiations, documentation, and other actions relating to any work-out, compromise, settlement or satisfaction of the debt secured hereby or settlement of any covenants and obligations secured by this Deed of Trust or set forth in the Loan Agreement or the Promissory Note. All such costs, expenses and fees shall be due and payable upon demand, shall bear interest from the date incurred through the date of collection at the rate of 10% per annum, and shall be secured by this Deed of Trust. 36. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record, as provided by law. 37. Successor Trustee. Trustee may resign by an instrument in writing addressed to Beneficiaries, or Trustee may be removed at any time with or without cause by an instrument in writing executed by Beneficiaries and duly recorded. In case of the death, resignation, removal or disqualification of Trustee or if for any reason Beneficiaries shall deem it desirable to appoint a substitute or successor trustee to act instead of Trustee herein named or any substitute or successor trustee, then Beneficiaries shall have the right and is hereby authorized and empowered to appoint a successor trustee, or a substitute trustee, without other formality than appointment and designation in writing executed and acknowledged by Beneficiaries and the recordation of such writing in the office where this Deed of Trust is recorded, and the authority hereby conferred shall extend to the appointment of other successor and substitute trustees successively. Such appointment and designation by Beneficiaries shall be full evidence of the right and authority to make the same and of all facts therein recited. If such appointment is executed on behalf of Beneficiaries by an officer of Beneficiaries, such appointments shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the Trustee or any officer of 7~) 29 0 0 5, Beneficiaries. Upon the making of such appointment and designation, all of the estate and title of Trustee in the Property shall vest in the named successor or substitute trustee and it shall thereupon succeed to and shall hold, possess and execute all the rights, powers, privileges, immunities and duties herein conferred upon Trustee; but, nevertheless, upon the written request of Beneficiaries or of the successor substitute trustee, the Trustee shall execute and deliver an instrument transferring to such successor or substitute trustee all of the estate and title in the Property of the trustee so ceasing to act, together with all the rights, powers, privileges, immunities and duties herein conferred upon Trustee, and shall duly assign, transfer and deliver any of the properties and moneys held by the Trustee hereunder to said successor or substitute trustee. All references herein to Trustee shall be deemed to refer to any trustee (including any successor or substitute, appointed and designated, as herein provided) from time to time acting hereunder. Trustor hereby ratifies and confirms any and all acts that Trustee herein named or its successor or successors, substitute or substitutes, in this Deed of Trust, shall do lawfully by virtue hereof. 38. Reconvevance. Upon written request of Beneficiaries, stating that, all performances and sums secured hereby have been satisfied and paid, and upon surrender of this Deed of Trust 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 any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 39. No Releases. The Property shall not be released from the lien of this Deed of Trust and no person shall be released from liability under the Loan Agreement or any other obligation secured hereby, except in the manner herein specified. Without affecting the liability of any other person for the payment and performance of any obligation herein mentioned (including Trustor should it convey said Property) and without affecting the lien or priority hereof upon any Property not released, Beneficiaries may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, grant other indulgences, make future or other advances to Trustor or any one or more parties comprising Trustor, assign or in any manner transfer this Deed of Trust, release or reconvey or cause to be released or reconveyed at any time all or part of the said Property described herein, take or release any other security or make compositions or other arrangements with debtors. Beneficiaries may also accept additional security, either concurrently herewith or thereafter, and sell same or otherwise realize thereon, either before, concurrently with, or after sale hereunder. 40. Beneficiaries Consent. At any time, upon written request of Trustor, Trustor's payment of Beneficiaries' fees and presentation of this Deed of Trust (in case of full reconveyance, for cancellation and retention), without affecting the liability of any person for the payment of the indebtedness, Beneficiaries may: (a) consent to the making of any map or plat of said Property; (b) join in granting any easement or creating any restriction thereon, (c) join in any other agreement affecting this Deed of Trust or the lien or charge thereof, and (d) reconvey, without warranty, all or any part of the Property. . 41. [RESERVED NO TEXT]. 30 42. Further Assurances. Trustor, from time to time, within fifteen (15) days after request by Beneficiaries, shall execute, acknowledge and deliver to Beneficiaries, such chattel . . mortgages, security agreements or other similar security instruments, in form and substance reasonably satisfactory to Beneficiaries, covering all property of any kind whatsoever owned by Trustor or in which Trustor has any interest which, in the reasonable opinion of Beneficiaries, is essential to.the operation of the Property covered by this Deed of Trust. Trustor shall further, from time to time, within fifteen (15) days after request by Beneficiaries, execute, acknowledge and deliver any financing statement, renewal, affidavit, certificate, continuation statement or other document as Beneficiaries may reasonably request in order to perfect, preserve, continue, extend or maintain the security interest under, and the priority of, this Deed of Trust and the priority of each such chattel mortgage or other security instrument. Trustor further agrees to pay to Beneficiaries on demand all reasonable costs and expenses incurred by Beneficiaries in connection with the preparation, execution, recording, filing and refiling of any such instrument or document, including the charges for examining title and the attorneys' fees for rendering an opinion as to priority of this Deed of Trust and of such chattel mortgage or other security instrument as a valid and subsisting lien. However, neither a request so made by Beneficiaries, nor the failure of Beneficiaries to make such request shall be construed as a release of such Property, or any part thereof, from the conveyance of title under this Deed of Trust, it being understood and agreed that this covenant and any such chattel mortgage, security agreement or other similar security instrument delivered to Beneficiaries are cumulative and given as additional security. 43. Time of Performance. Time is of the essence hereof in connection with all obligations of the Trustor herein and under the Loan Agreement and Promissory Note. 44. Notices. The undersigned Trustor requests that a copy of any Notice of Default or Notice of Sale hereunder be mailed to it at its address as hereinbefore set forth. Any notices to be given to Trustor by Beneficiaries hereunder shall be sufficient, if personally delivered or mailed, postage prepaid, to the address of the Trustor stated hereinabove, or to such other address that Trustor has requested in writing to Beneficiaries. Any time period provided in the giving of any notice hereunder shall commence upon the date such notice is delivered or deposited with the United States Postal Service for delivery by regular first-class postage pre-paid mail, as officially recorded on the certified mail receipt. 45. Beneficiaries' Right to Inspect. Beneficiaries and their agents and representatives may enter upon the Property at all reasonable times to attend to Beneficiaries' interest and to inspect the Property. 46. Reports and Statements. Trustor shall deliver to Beneficiaries, within ninety (90) days after the end of each of Trustor's fiscal years, and within twenty (20) days after Beneficiaries' request, following an Event of Default, reasonably detailed operating statements and C occupancy reports in a form satisfactory to Beneficiaries covering the Property, both certified as E" 5 correct by Trustor. At Beneficiaries' option, after an Event of Default, such operating statements shall be prepared by an independent certified public accountant at Trustor's expense. If Beneficiaries so request, such statements shall specify, in addition to other information requested by Beneficiaries, the rents and profits received from the Property, the disbursements made for such period, the names of the tenants of the Property and a summary of the terms of the respective leases or the rental arrangements. Trustor shall permit Beneficiaries or their representative to examine all books and 31 records pertaining to the Property, and shall deliver to Beneficiaries all financial statements, credit reports, and other documents pertaining to the financial condition and obligations of Trustor and any, tenants of the Property, and rental, income, and expense statements, audits, and tax returns relating to the Property. 47. Assignment by Beneficiaries; Participation. Beneficiaries may assign this Deed of Trust in whole or in part to any person and may grant participations in any of its rights under this Deed of Trust, without notice and without affecting Trustor's liability under this Deed of Trust. In connection with any proposed assignment, participation or similar arrangement, Beneficiaries may make available to any person all credit and financial data furnished or to be furnished to Beneficiaries by Trustor. Trustor agrees to provide to the person designated by Beneficiaries any information as such person may reasonably require to form a decision regarding the proposed assignment, participation or other arrangement. Trustor may not assign this Deed of Trust to any person at any time, except in connection with a transaction approved in writing by Beneficiaries, under the terms of this Deed of Trust. ' 48. [RESERVED NO TEXT]. 49. Legal Relationships. The relationship between Beneficiaries and Trustor is similar to that of lender and borrower, and no partnership, joint venture, or other similar relationship shall be inferred from this Deed of Trust. Trustor shall not have the right or authority to make representations, to act, or to incur debts or liabilities on behalf of Beneficiaries. Trustor is not executing this Deed of Trust as an agent or nominee for an undisclosed principal, and no third party beneficiaries are or shall be created by-the execution of this Deed of Trust, other than by the assignment by Beneficiaries of this Deed of Trust. 50. [RESERVED NO TEXT]. f~ try 51. Modification. This Deed of Trust may be amended, modified, changed or varied only by a written agreement signed by all of the parties hereto. No requirement of this Deed of Trust may be waived, at any time, except in a writing signed by Beneficiaries and any such waiver shall be effective only as to its terms and on a single occasion. Neither, Beneficiaries' delay or omission in exercising any right, power or remedy under this Deed of Trust upon default of Trustor nor Beneficiaries' failure to insist upon strict performance of any of the covenants or agreements contained in this Deed of Trust shall be construed as a waiver of any such right, power, remedy, covenant or agreement or as an acquiescence in Trustor's breach or default. 52. Successors. Subject to the prohibitions against Trustor's assignments herein, this Deed of Trust shall inure to the benefit of and bind all of the parties, their successors, estates, heirs, personal representatives and assigns. 53. Partial Invalidity. If a court of competent jurisdiction finally determines that any provision of this Deed of Trust is invalid or unenforceable, the court's determination shall not affect the validity or enforceability of the remaining provisions of this Deed of Trust. In such event, this Deed of Trust shall be construed as if it did not contain the particular provision that was determined to be invalid or unenforceable. No such determination shall affect any provision of this 32 0 0 3~ Deed of Trust to the extent that it is otherwise enforceable under the laws of any other applicable jurisdiction. 54. Mutual Negotiation. Beneficiaries and Trustor confirm that they have mutually negotiated this Deed of Trust and that none of the terms or provisions of this Deed of Trust shall be construed against either party. 55. Paragraph Headings. The paragraph headings are for convenience only and in no way define, limit, extend, or describe the scope or intent of this Deed of Trust or any of its provisions. 56. Applicable Law. This Deed of Trust and the rights of the parties hereunder shall be governed by, construed and enforced in accordance with the laws of the State of California. 57. Entire Agreement. This Deed of Trust, including any exhibits or addenda, contains the entire agreement of the parties with respect to the subject matter hereof 58. Counterparts. This Deed of Trust may be executed in two or more counterparts, all of which together shall constitute one and the same instrument and lien. The signature pages of exact copies of this Deed of Trust may be attached to one copy to form one complete document. Additional copies of this Deed of Trust may be executed in counterparts and recorded in two or more counties, all of which shall constitute one and the same instrument and lien. 59. Fixture Filing and Recording. This Deed of Trust constitutes a financing statement filed as a fixture filing under California Commercial Code Section 9502(c), as amended or recodified from time to time. This Deed of Trust is to be recorded in the real estate records of Los Angeles County, California, and covers goods that are, or are to become, fixtures. 60. Survival of Representations and Warranties. All ofTrustor's representations and warranties contained in this Deed of Trust shall be true and correct at all times during the term of the Loan secured hereby, until performance of all obligations set forth in the Loan Agreement and in the Promissory Note or, alternatively, full repayment of the Loan and release and reconveyance of this Deed of Trust. 33 IN WITNESS WHEREOF, Trustor hereby duly executes this Deed of Trust and Assignment of Rents as of the 22"d Day of April 2008. TRUSTOR Rio Hondo Community Development Corporation, a California public benefit corporation By. gfuC ' /l / Qtw d--' Donna Duncan, President By: [NOTARY JURAT ATTACHED] 34 • • CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA } } S.S. COUNTY OF Los Angeles } On May 21, 2008 before me, Maria Raygoza, Notary Public, personally appeared Donna L. Duncan, President, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person 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 rrumM• ~iouibiy a NOTARY 4f1 t)RNIA - LOS ANGELES COUNTY My Comm. Expires JUL. 19, 2008 Signature &Wv4 66 r, This area for official notarial seal. TO ONLY BE ATTACHED TO DEED OF TRUST DATED APRIL 22, 2008 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY Subject Address: 9331 Glendon Way (1 SFD unit on lot) Legal Description: Parcel 3 as shown on Parcel Map No. 5172, in the City of Rosemead, County of Los Angeles, State of California, as per map recorded in Book 57, Page 64 of Parcel Maps, in the office of the County Recorder of said County. City: Rosemead County: Los Angeles State: California Zip Code: 91770-2006 Census Tract: 4329.01 Map Reference: 59647 APN: 8594022042 35 0 EXHIBIT "E" • AFFORDABLE HOUSING REGULATORY AGREEMENT LA #4811-3454-3874 Q - J A This page is part of your document - DO NOT DISCARD - 20080944596 037 es: Recorded/Filed in Official Records Fee: 0.00 Recorder's Office, Los Angeles County, California Tax: 0.00 Other: 0.00 05129/08 AT 08:OOAM ' i Total: 0.00 Title Company TITLE(S) : t 1 ~ I I ~ I Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. Number of AIN's Shown l-__.IL - E~,p THIS FORM IS NOT TO BE DUPLICATED - 0 0 • C 2008 AFFORDABLE HOUSING DEVELOPMENT LOAN AGREEMENT CITY OF ROSEMEAD, ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, AND RIO HONDO COMMUNITY DEVELOPMENT CORPORATION THIS 2008 AFFORDABLE HOUSING DEVELOPMENT LOAN AGREEMENT (the "Agreement") is dated as of April 22, 2008 by and between the Rio Hondo Community Development Corporation, a California public benefit corporation (the "Borrower"); the City of Rosemead (the "City"), and the Rosemead Community Development Commission, a municipal corporation (the "CDC") (also collectively referred to as the "Beneficiaries"), and is made and executed in light of the factors set forth in the following Recitals: - RECITALS - 1. Borrower has requested the City provide a zero percent (0%) loan, subject to a final balloon payment at the expiration of the fifty-five (55) year term limit, in a total principal amount not to exceed the sum of Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00), and the CDC provide a zero percent (0%) forgivable loan in a total principal amount not to exceed the sum of Two Hundred Forty-Three Thousand Two Hundred Eighty-Four Dollars ($243,284.00), for a total sum of Four Hundred and Fifty Seven Thousand Eight Hundred and Ninety-Nine Dollars ($457,899.00), in support of affordable rental housing and affordable single family housing preservation, rehabilitation, development and operations program of the Borrower which will support and implement the affordable housing preservation, rehabilitation and development goals of the City and the CDC. 2. The City and CDC are willing to grant such an amount to Borrower under the terms and conditions specified in this Agreement and in the "Related Loan Documents" as this term is hereinafter defined. 3. Borrower understands and agrees that: (A) in providing the grant as set forth in this Agreement, the City and CDC are relying upon Borrower's representations, warranties, and agreements as provided below; and, (B) such grant of the CDC shall be and remain subject to the terms and conditions of this Agreement. THE BORROWER, THE CITY, AND THE CDC HEREBY AGREE AS FOLLOWS: Section 1. EFFECTIVE DATE AND TERM. This Agreement shall be dated as of April 22, 2008, and shall be effective as of the specific date provided in Section 12(19), below, (the "Effective Date") and shall continue thereafter until the indebtedness of the Borrower to the City and the CDC has been paid in full, and the parties terminate this Agreement in writing. LA 94811-3454-3874 v2 I Section 2. DEFINITIONS. In addition to the usage of the defined terms set forth in the caption and recitals of this Agreement, the following words shall have the following meanings when used in this Agreement. All references to dollar amounts shall mean amounts in lawful money of the United States of America. • Advance. The word "Advance" refers to a disbursement by the City and the CDC of the proceeds of the Loan to the Borrower. The City and the CDC shall make Advances to the Borrower in one or more disbursements from time-to-time upon submission by the Borrower to the City and the CDC of the appropriately completed written request for such an Advance as accompanied by the applicable Collateral Documents executed on behalf of the Borrower by its authorized officers. • Affordable Housing. The words "Affordable Housing", "Affordable Dwelling Units" and "Affordable Housing Units" mean and refer to a single family dwelling unit located in the City of Rosemead, which the Borrower shall own and operate or which the Borrower may hereafter acquire for any of its charitable non- profit corporate purposes. As used herein the words "affordable housing costs", and "affordable rents" shall have the meanings ascribed to these terms in Health and Safety Code Section 50052.5 and 50053, as applicable. In general, Affordable Housing, Affordable Housing Units and Affordable Dwelling Units which are either pledged as collateral to repay the Loan or which are situated or constructed on any of the Development Property, shall be reserved by the Borrower for use and occupancy by low- and moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) households at affordable housing costs and/or affordable rents as applicable for the period of time set forth in the HOME Regulatory Agreement, in the case of the Rental Housing Property, or for the period of time set forth in an Affordable Housing Regulatory Agreement, in the case of a Development Property. • Affordable Housing Regulatory Agreement. The words "Affordable Housing Regulatory Agreement" mean and refer to the affordable housing development covenants in favor of the City and the CDC which the Borrower shall cause to be recorded against each Development Property concurrently upon the disbursements of any Advance used by the Borrower to acquire such Development Property. Each such Affordable Housing Regulatory Agreement shall have a term of. fifty- five (55) years for property acquired by the Borrower for use, occupancy and improvement as single family residential dwelling units at affordable housing costs for low- and moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) persons and households. The general form of Affordable Housing Regulatory Agreement is attached as Exhibit "E". LA 94811-3454-3874 Q 2 • • • Agreement. The word "Agreement" means this 2008 Affordable Housing Development Loan Agreement, together with all exhibits and schedules attached to this Agreement from time to time. • Borrower. The word "Borrower" means the Rio Hondo Community Development Corporation, a California non-profit public benefit corporation. • Budget. The word "Budget" means and refers to the Program Budget attached as Exhibit "B-1" relating to the initial Advance and the form of a Program Budget attached as Exhibit "B-2" relating to any subsequent Advance, both of which have been prepared by the Borrower and approved by the City and the CDC. • Collateral. The word "Collateral" means and includes without limitation all property and assets granted as collateral security for the Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust received, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. • Collateral Documents. The words "Collateral Documents" mean and refer to each of the following: (i) the Deed of Trust; and (ii) the Related Loan Documents. • Development Property. The words "Development Property" mean and refer to the real property which the Borrower may hereafter designate in writing to the City and the CDC for acquisition by the Borrower for preservation, operation and/or development as Affordable Housing using the proceeds of the Loan. Development Property shall be located within the municipal boundaries of the City of Rosemead and shall be land which has both a City General Plan designation and City zoning designation as "residential use lands". • Environmental Conditions. The words "Hazardous Substance," mean (1) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws (defined below) as a "hazardous substance," "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic substance," "toxic pollutant" or any other formulation intended to define, list or classify substances by reason of deleterious Property such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or "EP toxicity" and (2) any petroleum product, natural gas, natural gas liquids, liquified. natural gas and synthetic gas usable for fuel (or mixtures of natural gas such as synthetic gas) which is not stored in a motor vehicle for use in the regular course of operation of such motor vehicle; and the words "Hazardous Waste" mean any Hazardous Substance which has been released as waste on or at the Property or which has LA #4811-3454-3874 v2 3 • 0 been disposed of, burned or incinerated, accumulated, stored, treated, recycled on or at the Property; and the words "Environmental Laws" as used herein mean any and all present and future federal, state and local laws (whether under common law, statute, rule, regulation or otherwise), requirements of permits issued with respect thereto, and other requirements of governmental authorities relating to the environmental regulation of any Hazardous Substance or Hazardous Waste (including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601, et sue.) ("CERCLA") and the applicable provisions of the California Health and Safety Code and the California Water Code, all as heretofore or hereafter amended from time to time). • Event of Default. The words "Event of Default" mean and include without limitation any of the Events of Default set forth below in Section 9, titled "Events of Defaults." • HOME Regulatory Agreement. The words "HOME Regulatory Agreement" mean and refer to the HOME Partnership Investment Partnership Funds Regulatory Agreement, dated April 22, 2008 by and between the Borrower and the City of Rosemead. The Regulatory Agreement evidences the covenant of the Borrower to preserve, operate and maintain certain affordable rental housing at affordable rents available to persons and households of low- and moderate- income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) for the period set forth therein. • Improvements. The word "Improvements" means and includes without limitation all existing structures, facilities, fixtures, additions and similar construction on the Rental Housing Property which are owned by the Borrower. • Indebtedness. The word "Indebtedness" means and includes the Promissory Note described in Section 3 and all amounts disbursed by the City and the CDC under the Loan or otherwise payable to the City and the CDC by the Borrower under the Promissory Note or any of the Collateral Documents. • Loan. The word "Loan" means the loan to be made to Borrower by the City under this Agreement and the Related Documents as described below in a maximum principal amount not to exceed Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00). The word "Loan" also means the loan to be made to Borrower by the CDC under this Agreement and the Related Documents as described below in a maximum principal amount not to exceed Two Hundred Forty-Three Thousand Two Hundred Eighty-Four Dollars ($243,284.00). • Promissory Note. The words "Promissory Note" mean the promissory note, described below in Section 3, in an original principal amount not to exceed Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00) from the City, and two Hundred Forty-Three Thousand Two Hundred Eighty-Four LA #4811-3454-3874 Q 4 Dollars ($243,284.00) from the CDC, for a sum total amount of $457,899.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the Promissory Note. The form of the Promissory Note is attached as Exhibit "C". • Rental Housing Property. The words "Rental Housing Property" mean and refer to the one (1) improved legal parcel of land which is situated in the City of Rosemead and generally identified as follows: (i) 9331 Glendon Way, Rosemead, California (there is 1 single family rental dwelling unit situated on this parcel); and together with all accessions, parts, and additions to, all replacements of, and all substitutions for any of such Property identified in the preceding subparagraph, and all proceeds (including insurance proceeds and refunds of premiums) from any sale, casualty loss, condemnation or other disposition of such Property. A legal description of the Rental Housing Property is attached to this Agreement as Exhibit "A". • . Related Loan Documents. The words "Related Loan Documents" mean and include without limitation all other instruments, agreements and documents, whether now or hereafter existing, executed by the Borrower and delivered to the City and the CDC in connection with each Advance and the Indebtedness. • Title Company. The words "Title Company" mean and refer to a title insurance company escrow department designated by the City and the CDC which shall serve as the loan escrow accommodation agent of the parties for the exchange and recordation of the various Collateral Documents and the disbursement of the proceeds of the initial Advance of Loan to the Borrower under as set forth in Section 5(b). Section 3. THE LOAN. (a) The Loan shall be in a principal amount not to exceed the sum of Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00) provided by the City, and Two Hundred Forty-Three Thousand Two Hundred Eighty-Four Dollars ($243,284.00) provided by the CDC, for a total sum of Four Hundred and Fifty Seven Thousand Eight Hundred and Ninety-Nine Dollars 457,899.00), or so much thereof as the Beneficiaries may make available to the Borrower as the net proceeds (after certain costs and reserves are established) disbursed by the Beneficiaries, on or before April 22, 2008. The Loan, or so much of the Loan as may be disbursed to the Borrower, shall be evidenced by the Promissory Note in the form attached hereto as Exhibit "C". The Loan shall have a term of fifty-five (55) years from the date of the initial Advance. The Loan shall be evidenced by the Promissory Note. The date of the Promissory Note shall be the date on which the CDC makes the initial Advance of proceeds under the Loan to the Borrower as provided in Section 5(b). The CDC Loan amounts shall be forgivable if a Default does not occur prior to the 55-year term limit as described in the Promissory Note. The City Loan amounts shall be payable in full at the end of the 55-year LA 44811-3454-3874 Q 5 • • Promissory Note. If a Default occurs prior to the end 55-year term the City and CDC shall have the right full payment of all Loaned amounts. The Promissory Note shall be secured by the Deed of Trust and Assignment of Rents in the form attached as Exhibit "D", pursuant to which the Borrower grants to the CDC a first lien position in the Rental Housing Property. (b) The Loan shall be payable as set forth in the Promissory Note. (c) The Borrower shall use the proceeds of the Loan solely for the purposes set forth below: ➢ the Loan shall be used and applied by the Borrower to acquire 9331 Glendon Way, Rosemead, California for development, improvement, operation and/or resale to qualified low-and moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) purchasers or renters, as applicable, of the Affordable Housing Units. Section 4. GENERAL REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to the City and the CDC, as of the date of this Agreement and the date of the Promissory Note and at all times that any balance of the Loan is outstanding: (1) Borrower is and shall maintain during the period of time when any principal balance of the Loan may remain outstanding its status as a California non-,profit public benefit corporation, duly organized and existing and authorized to transact business in California and the Borrower has previously qualified as a 501(c)(3) tax exempt entity under applicable federal tax laws; (2) Borrower is a "Community Housing Development Organization" ("CHDO"), as this term is defined at 24 CFR Part 92.2, and the Borrower shall continuously maintain its status as a CHDO during the term of time when any principal balance of the Loan may remain outstanding; (3) the corporate charter and by-laws of the Borrower authorize the Borrower to enter into this Agreement and to undertake the affordable housing preservation, operation and development activities contemplated hereunder, and the governing board and membership of the Borrower has previously taken all action necessary to authorize the execution of this Agreement by the Borrower; (4) the Borrower is qualified to undertake and complete the affordable housing preservation, operation and development activities contemplated under this Agreement; LA 94811-3454-3874 Q 6 • • (5) each financial statement of Borrower supplied to the City and the CDC truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to the City and the CDC. Borrower has no material contingent obligations except as disclosed in such financial statements; (6) the Borrower has conducted a due and diligent inquiry of the environmental condition of the Rental Housing Property relating to the potential presence of Hazardous Waste and the use thereon of Hazardous Substances and based upon such inquiry, the Borrower represents to the City and the CDC that as of the date of the Promissory Note, the Borrower is unaware of any adverse environmental conditions relating to the presence or potential presence of Hazardous Substances; (7) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened and no other event has occurred which may materially adversely affect Borrower's financial condition, or the Rental Housing Property, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by the City and the CDC in writing; (8) Borrower has on the date of the Promissory Note and the initial Advance good and marketable title to the Rental Housing Property free and clear of all defects, liens, and encumbrances, excepting only liens for taxes, assessment, or governmental charges or levies not yet delinquent or payable without penalty or interest and such liens and encumbrances as may be approved in writing by the City and the CDC prior to the date of the Promissory Note and the initial Advance; (9) as of the date of each subsequent Advance, no tenant in lawful possession of any dwelling unit on the Rental Housing Property shall be in arrears in its rental obligation to the Borrower unless Borrower has initiated reasonable measures acceptable to the City and the CDC to correct such arrearage in rent, and each rental agreement is in full force and effect without any other default by the renter unless Borrower has initiated reasonable measures to obtain the cure of any such other default; (10) the information set forth in the Budget generally describes the proposed housing improvements and activities to be undertaken by the Borrower during the period of time when the Borrower may submit applications for disbursements of Advances under Section 5(c) to the City and the CDC. The Borrower shall not materially alter or modify the programs set forth in the Budget without consent of the City and the CDC; LA 44811-3454-3874 Q 7 • 0 (11) Borrower understands and agrees that the City and the CDC is relying upon the above representations and warranties in extending the Loan and each Advance to Borrower. Borrower further agrees that the foregoing representations and warranties shall be continuing in nature and shall remain in full force and effect until such time as the Loan and Promissory Note shall be paid in full, or until the Agreement is terminated, whichever is the last to occur. Section 5. CONDITIONS PRECEDENT TO THE LOAN AND DISBURSEMENT OF ADVANCES. (a) The proceeds of the Loan shall be disbursed to the Borrower as Advances. The aggregate amount of all Advances under Section 5(b) shall not exceed the sum of Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00) from the City, and the sum of Two Hundred Forty-Three Thousand Two Hundred Eighty-Four Dollars ($243,284.00) from the CDC, for a total sum of Four Hundred and Fifty Seven Thousand Eight Hundred and Ninety-Nine Dollars 457,899.00). The initial Advance shall occur by a date no later than June 1, 2008. The obligation of the CDC to make the Loan and provide any Advance under Section 5(b) shall be subject to the fulfillment and satisfaction by the Borrower of all of the conditions set forth in this Agreement and the following: , (1) Borrower shall have provided to the City and the CDC a CLTA lender's extended coverage policy of title insurance with such endorsements as the City and the CDC may require, issued by a title insurance company acceptable to the City and the CDC and in a form, amount, and content satisfactory to the Executive Director insuring or agreeing to insure that the City's and the CDC's Deed of Trust on the Rental Housing Property is or will be upon its recordation, a valid lien on the Rental Housing Property free and clear of all defects, liens, encumbrances, and exceptions except as to those security lien obligations approved by the Executive Director in writing; (2) Unless waived by the City and the CDC in writing, Borrower shall have delivered to the City and the CDC the insurance policies or evidence thereof as described in the Deed of Trust, or in the case of any subsequent Advance as described in the Housing Regulatory Agreement; (3) There shall not exist on the date of the Promissory Note and the initial Advance (or on the date of any subsequent Advance) a condition which would constitute an Event of Default under this Agreement; (4) INTENTIONALLY BLANK (5) Prior to or currently with the initial Advance the Borrower shall have executed the Promissory Note and all of the Collateral Documents and the Loan Related Documents; LA #4811-3454-3874 v2 8 • • (6) Prior to or currently with the initial Advance the Borrower shall have delivered to the City and the CDC an approving legal opinion of its legal counsel in a form reasonably acceptable to the City and the CDC stating that the Borrower has taken all necessary action to approve the Loan and transaction contemplated under this Agreement and that the Loan, the Agreement and each of the Related Loan Documents, are properly executed by the Borrower and each evidences a valid, lawful and binding obligation of the Borrower; (7) At least ten (10) days prior to the initial Advance, the Borrower shall have submitted to the City and the CDC its appropriately detailed Budget for the use of the proceeds of the initial Advance, and the Executive Director shall have approved such Budget for the initial Advance, and such approval of the Executive Director shall not be unreasonably conditioned, withheld or delayed; (8) Concurrently with the disbursement of each subsequent Advance the Borrower shall acquire the Development Property identified by the Borrower under (8), above, and the applicable form of a Housing Regulatory Agreement shall be executed by the Borrower in recordable form and recorded against such Development Property; (9) Prior to the disbursement of each subsequent Advance, the Borrower shall upon the request of the City and the CDC provide the City and the CDC with an approving legal opinion of its legal counsel regarding the matters set forth in (6), above with respect to such Development Property and such subsequent Advance; (b) The City shall disburse the sum of $214,615.00, and the CDC shall disburse the sum of $243,284.00, or such lesser sum as the Borrower may request on or before June 1, 2008, when the conditions for the initial Advance have been satisfied. Section 6. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with the City and the CDC that, while this Agreement is in effect, Borrower will: (1) promptly inform the City and the CDC in writing of (A) all material adverse changes in Borrower's financial condition, and (B) all existing and threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower which could materially affect the financial condition of Borrower; (2) maintain its books and records in accordance with generally accepted accounting principles, applied on a consistent basis and permit the City and the CDC to examine and audit Borrower's books and records at all reasonable times; LA #4811-3454-3874 Q 9 0 • (3) furnish such additional information and statements, list of assets and liabilities, agings of receivables and payables, inventory schedules, budgets, forecasts, tax returns, and other reports with respect to Borrower's financial condition and business operations the City and the CDC may request from time to time; (4) comply with all laws, ordinances, and regulations, now or hereafter in effect of governmental authorities applicable to the use or occupancy of the Rental Housing Property including without limitation "Environmental Laws" as defined in Section 2, above. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified the City and the CDC in writing prior to doing so and so long as, in the City's and the CDC's opinion, the City's and the CDC's interests in the Rental Housing Property or any of the Development Property, as applicable, are not jeopardized. The City and the CDC may require Borrower to post adequate security or a surety bond, reasonably satisfactory to the City and the CDC, to protect the City's and the CDC's interest; (5) use the proceeds of the Loan solely for the purposes set forth in Section 3 and for expenses directly related to the Loan and the execution and delivery of the Promissory Note and the Deed of Trust and the Collateral Documents; (6) pay and discharge when due all of Borrower's other indebtedness, obligations, and claims (exclusive of the Deed of Trust and the subordinate deed of trust referenced in Section 5(a)(5)) which, if unpaid, might become a lien or charge upon the Rental Housing Property and any of the Development Property, as applicable; provided, . however, that Borrower shall not be required to pay and discharge any such indebtedness, obligation, or claim so long as (A) its legality shall be contested in good faith by appropriate proceedings, (B) the indebtedness, obligation, or claim does not become a lien or charge upon any of Rental Housing Property and any of the Development Property, as applicable, and (C) Borrower shall have established on its books adequate reserves with respect to the amount contested in accordance with generally accepted accounting practices. If the indebtedness, obligation, or claim does become a lien or charge upon any of the Rental Housing Property and any of the Development Property, as applicable, Borrower shall remove the lien or charge as provided in this paragraph; (7) perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Borrower and the City and the CDC, including without limitation the HOME Regulatory Agreement, and in all other loan agreements now or LA #4811-3454-3874 Q 10 hereafter existing between Borrower and any other party. Borrower shall notify the City and the CDC immediately in writing of any default in connection with any such agreement; (8) make, execute, and deliver to the City and the CDC such security agreements, instruments, documents, and other agreements reasonably necessary to document and secure the Loan and to perfect the security interest of the City and the CDC in any of the Rental Housing Property and/or any of the Development Property; (9) submit affordable rental housing continuous compliance reports with respect to the Rental Housing Property and with respect to any of the Development Property as provided under the Affordable Housing Regulatory Agreement applicable to such Development Property for and approved by the City and the CDC; (10) with respect to each Development Property promptly initiate the rehabilitation, repair or commence the construction and improvement of Affordable Dwelling Units on such Development Property following the recordation of the Affordable Housing Regulatory Agreement on such Development Property and thereafter diligently prosecute such work to complete without interruption; (11) The Borrower shall improve the Rental Housing Property in a good and workman-like manner- and shall complete the improvements thereon within 90 calendar days following the date of recordation of the Affordable Housing Regulatory Agreement on such Rental Housing Property; (12) During the course of the improvement of the each Development Property, the Borrower shall initiate a marketing and sale plan for the Development Property to qualified occupants. The Borrower may establish a lottery system or any other fair and non-discriminatory means for selecting the qualified occupants from among those interested persons who have contacted the Borrower for rent of each Affordable Dwelling Unit thereon; (13) The Borrower hereby covenants and agrees to use the rental or net sales proceeds realized by the sale of any Development Property (after the discharge of the permitted construction lender lien and payment of permitted development costs) for the affordable housing development purposes of the Borrower, as a community housing development organization, for other affordable housing improvement projects in the City of Rosemead. Borrower shall provide the City and the CDC with written confirmation that it is in compliance with this covenant annually, until the fifty-fifth (55th) anniversary following the date when the outstanding principal balance of the Loan has been forgiven in full by the City and the CDC. LA #4811-3454-3874 Q 1 I • 0 Section 7. NEGATIVE COVENANTS. Borrower covenants and agrees with the City and the CDC that while this Agreement is in effect, Borrower shall not, without the prior written consent of the City and the CDC: (1) Indebtedness and Liens. (A) Incur or assume indebtedness for borrowed money, including capital leases, (B) sell, transfer, mortgage, assign, pledge, lease any of the Rental Housing Property (except for leases of rental dwelling units on any of the Rental Housing Property to qualified tenants), (C) grant a security interest in, or encumber any of Borrower's assets, or (D) sell with recourse any of Borrower's accounts. (2) Continuity of Operations. (A) engage in any business activities substantially different than those in which Borrower is presently engaged, (B) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change ownership, change its name, dissolve or transfer or sell collateral out of the ordinary course of business, or (C) make any distribution with respect to any capital account, whether by reduction of capital or otherwise. (3) Loans, Acquisitions and Guaranties. (A) loan, invest in or advance money or assets to third-parties except to first time homebuyers under a mortgage program approved by the City and the CDC, (B) purchase, create or acquire any interest in any other enterprise or entity, or (C) incur any obligation as surety or guarantor other than in the ordinary course of business. (4) Liens. Create or allow to be created any other new lien or charge upon any of the Rental Housing Property. Section 8. GENERAL LOAN PROVISIONS. The following provisions relate to the Loan: (1) General Indemnity. Borrower shall indemnify, defend with counsel selected by the City and the CDC, protect and hold the City and the CDC, its officials, officers, employees, agents and successors harmless from any and all claims asserted against the City and the CDC by any person, entity, or governmental body, or arising out of or in connection with any of the use, operation or ownership of any of the Rental Housing Property by the Borrower. The City and the CDC shall be entitled to appear in any action or proceeding to defend itself against such claims, and all costs incurred by the City and the CDC in connection with such defense, including attorneys' fees, shall be paid by Borrower to the City and the CDC. The City and the CDC shall, in its sole discretion, be entitled to settle or LA 44811-3454-3874 Q - 12 • 0 compromise any asserted claims against it, and such settlement shall be binding upon Borrower for purposes of the indemnification 'under this Section 8(1). All amounts paid by the City and the CDC under this Section 8(1), if any, shall be secured by the Deed of Trust payable upon demand, and shall bear interest at the rate applicable to the Loan. (2) Special Environmental Indemnity. Borrower shall indemnify, defend with counsel selected by the City and the CDC, protect and hold harmless the City and the CDC, its officials, officers, employees, agents and successors (collectively, "Environmental Conditions Indemnified Parties" or singularly, "Environmental Conditions Indemnified Party") from and against all claims, actual damages (including without limitation, special and consequential damages), punitive damages, injuries, costs, response costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal and administrative proceedings, interest, fines, charges, penalties and expenses (including without limitation (A) attorney's, engineer's, consultant's and expert witness fees and costs incurred in defending against any of the foregoing or in enforcing this indemnity and (B) any diminution in the value of the property) of any kind whatsoever paid, incurred or suffered by any Environmental Conditions Indemnified Party, or asserted against any of the property, directly or indirectly arising from or attributable to (i) any breach by the Borrower of any of its agreements, representations or warranties set forth in Section 4(6), or (ii) any repair, cleanup, remediation, detoxification, closure or preparation and implementation of any plan therefor undertaken by any Environmental Conditions Indemnified Party concerning Hazardous Waste on, under or about any of the Rental Housing Property. The foregoing indemnity shall apply whether acts of any Environmental Conditions Indemnified Party are undertaken because of proceedings initiated by any federal, state or other government authority or by any private persons(s). The foregoing indemnity is intended by the parties to be an agreement pursuant to Section 107(e) of CERCLA, 42 U.S.C. Section 9607(e) and California Health and Safety Code Section 25364. (3) Special Covenant to Give Notice to the City and the CDC. The Borrower shall promptly give the City and the CDC (i) a copy of any notice, correspondence or information the Borrower receives from any federal, state or other government authority regarding Hazardous Waste on, under or about any of the Rental Housing Property or any of the Development Property or regarding any actions, instituted, completed or threatened by any such governmental authority concerning Hazardous Waste which affects or may affect any of the Rental Housing Property or any of the Development Property, (ii) written notice of any knowledge or information the Borrower obtains regarding Hazardous Waste on, under or about any of the Rental Housing Property or any Development Property or expenses or losses incurred or expected to be incurred by the Borrower, third party or any government agency to study, assess, contain or remove LA 94811-3454-3874 Q 13 • 0 any Hazardous Waste on, under or about the Rental Housing Property or any Development Property for which expense or loss the Borrower may be liable or for which a lien may be imposed on any of the Rental Housing Property or any Development Property, (iii) written notice of all claims made or threatened by any third party (other than government authority) against the Borrower or any of the Rental Housing Property or any Development Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Waste and (iv) written notice of the Borrower's discovery of any occurrence or condition on any land adjacent to any of the Rental Housing Property or any Development Property that could cause any of the Rental Housing Property to be classified as "border-zone property" under the provisions of California Health and Safety Code Sections 25220, et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of any of the Rental Housing Property or any Development Property under any of the statutes referred to in the preceding paragraph or any regulation adopted pursuant thereto. (4) Actions. The City and the CDC shall have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or liabilities of the parties to this Agreement. In connection with this right, the City and the CDC may incur and pay reasonable costs and expenses, including, but not limited to, attorneys' fees, for both trial and appellate proceedings. Borrower covenants to pay to the City and the CDC on demand all such expenses, together with interest from the date the City and the CDC may incur the expense at the rate specified in the Promissory Note. Section 9. EVENTS OF DEFAULT. (a) Default By City or the CDC. The following shall constitute a default by the City or the CDC: failure to fund the Loan as provided in Section 5(b) of this Agreement. (b) Default By Borrower. Each of the following shall constitute a default by the Borrower: (i) if applicable, failure by the Borrower to perform or a delay in performing or a failure to comply with any term or provision of this Agreement or any of the Related Agreements, including the failure to operate or make the Rental Housing Property available for occupancy to persons and households of low- and moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations), or a default or breach under the Promissory Note, under the HOME Regulatory Agreement or any Affordable Housing Regulatory Agreement in the case of a Development Property where such failure or delay or noncompliance is not corrected within thirty (30) days of notice LA #4811-3454-3874 Q 14 • J thereof by the City and the CDC. The City and the.CDC reserve the right to exercise any and all remedies under the law against RHCDC, as provided for in Section 10 of this Agreement. (ii) failure by the Borrower to perform or a delay in performing or a failure to comply with any term or provision of the Deed of Trust or any Affordable Housing Regulatory Agreement in the case of a Development Property and such failure or delay or noncompliance is not corrected within thirty (30) days of notice thereof by the City and the CDC. Section 10. REMEDIES BY BORROWER OR CDC (a) Remedies of Borrower. Upon a default by the City and the CDC, (i) the Borrower shall be released from any further obligation under this Agreement upon the repayment to the City and the CDC of the outstanding principal balance, if any, of the Promissory Note and (ii) the Borrower may seek appropriate legal or equitable relief for the default of the City and the CDC. (b) Remedies of the City and the CDC. Upon a default by.the Borrower, the City and the CDC may, at its option: (i) declare all sums due under the Promissory Note immediately due and payable; (ii) institute suit for the foreclosure of the Deed of Trust or deliver to the trustee under the Deed of Trust a written declaration of default by Borrower and of election to cause the Rental Housing Property to be sold, all as provided in the Deed of Trust; (iii) institute any proceeding at law or in equity to enforce the obligations and covenants of the Borrower under this Agreement, the Promissory Note, the Deed of Trust, or any Affordable Housing Regulatory Agreement. (c) In any action brought under this Agreement, the prevailing party shall be entitled to reimbursement from the other party of its costs and expenses (including reasonable attorney's fees) in bringing such action. Additionally, the City and the CDC shall be entitled to any costs, including reasonable attorney's fees, incurred in collecting amounts due the City and the CDC under the Promissory Note. For the purpose of the preceding sentences, the words "reasonable attorney's fees" means and includes the salary and expense of lawyers employed by the Office of Commission General Counsel of the City and the CDC who may perform legal services in connection with such an action computed on an hourly basis. Section 11. TERMINATION OF AGREEMENT. Exempt for the provisions of Section 6(13) which shall remain in effect for a period of five (5) years following the repayment in full of the Loan and the provisions of Section 8(2) and Section 12(2) which shall remain in effect in perpetuity, the remaining provisions of this Agreement shall terminate upon the payment in full by the Borrower of all amounts due under the Promissory Note. Section 12. HOUSING AFFORDABILITY COVENANT OF THE BORROWER AND MISCELLANEOUS PROVISIONS. LA 44811-3454-3874 Q 15 C 0 The following provisions are a part of this Agreement: (1) Housing Affordability Covenant. Concurrently with the disbursement of the initial Advance, the Borrower shall cause to be recorded the HOME Regulatory Agreement which shall affect Borrower's title in the Rental Housing Property. The HOME Regulatory Agreement contains certain affordable rental housing regulatory and affordability covenants which shall run with the land and the Rental Housing Property for a term of fifty five (55) years following its recordation. The text of the HOME Regulatory Agreement is incorporated into this Agreement by this reference. During the term of this Agreement, any amendment of the HOME Regulatory Agreement shall be subject to the prior written approval of the CDC as provided in Section 12(4) of this Agreement. (2) Discrimination Prohibited. The Borrower covenants and agrees that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability" in the use, operation, occupation, lease, sublease, transfer or sale of the Rental Housing Property, or later in the case of any Development Property, nor shall the Borrower, or any third party related to the Borrower establish or permit any such practice of discrimination or segregation to occur on the Rental Housing Property, or any Development Property, in connection with the selection, location, number or occupancy of residents in any of the rental dwelling units on the Rental Housing Property or any Development Property, as applicable. The text of Health and Safety Code Section 33375 which sets forth the general form of non- discrimination clauses to be included in each lease or contract entered into by the Borrower with respect to the Rental Housing Property, is hereby incorporated in this Agreement by this reference. (3) No Joint Venture. Nothing in this Agreement shall be construed to constitute the creation of a partnership or joint venture between the City, CDC and Borrower. The City and the CDC are not agents or representatives of Borrower. This Agreement does not create a contractual relationship with and shall not be construed to benefit or bind the City and the CDC in any way with or create any contractual duties by the City and the CDC to any contractor, subcontractor, materialman, laborer, or any other person. (4) Amendment. This Agreement may be amended as deemed necessary by written instruments duly approved by the Borrower, the City and the CDC. Any such amendments or modifications shall be valid, binding and legally enforceable only if in written form and executed by the parties hereto and only after the approval thereof by official action of the City and the CDC; provided however, that the Executive Director in consultation with legal counsel for the City and the CDC, is authorized to make non-substantive LA #4811-3454-3874 Q _ 16 revisions and changes to the text of any instrument attached hereto as an exhibit prior to the delivery of such instrument by the Borrower. (5) Applicable Law. This Agreement has been delivered to the City and the CDC and accepted by the City and the CDC in the State of California. If there is a lawsuit arising under this Agreement, the Superior Court of Los Angeles County, State of California shall have jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California. (6) Authority to File Notices. Borrower appoints and designates the City and the CDC as its attorney-in-fact to file for record any notice that the City and the CDC deem necessary to protect their interests under this Agreement. This power shall be deemed coupled with an interest and shall be irrevocable while any sum or performance remains due and owing under the Promissory Note. (7) Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. (8) Consent to Sale of Loan and Promissory Note by the City and the CDC. Borrower agrees and consents to the sale, transfer or collateral assignment, whether now or later by the City and the CDC of the Loan, the Promissory Note and the Deed of Trust (or to any participating interest therein) to a third party including without limitation Community Reinvestment Fund, Inc., and Borrower further waives all right of offset or counterclaim that it may have now or later against the City and the CDC or against any purchaser of the Loan, the Promissory Note and the Deed of Trust (or a participating interest therein) and Borrower unconditionally agrees that the City and the CDC, and each such purchaser (including successors to purchasers), may enforce Borrower's obligations to the City and the CDC hereunder. Borrower further agrees that such purchaser from the City and the CDC may enforce its interests irrespective of any personal claim or defense that Borrower may have against the City and the CDC. (9) INTENTIONALLY BLANK (10) Costs and Expenses. The City and the CDC may pay someone else to help collect the Loan and to enforce this Agreement, and Borrower will pay that amount. This includes, subject to any limits under applicable law, attorneys' fees and legal expenses of the City and the CDC, whether or not there is a lawsuit, including reasonable attorneys' fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also will pay any court costs, in addition to all other sums provided by law. For the purposes hereof, the words, "reasonable LA #4811-3454-3874 v2 17 • 0 attorney's fees" in the case of the City and the CDC means and includes the salaries and benefits payable to the lawyers employed in the office of the City Attorney and the Legal Counsel to the CDC, as allocated on an hourly basis for any such legal services performed on behalf of the City and the CDC hereunder. (11) Entire Agreement. This Agreement and the Related Documents constitute all of the agreements between the parties relating to the Loan and supersedes all other prior or concurrent oral or written agreements or understandings. The City and the CDC have no obligation to extend any additional credit to the Borrower for any other purpose. (12) Notices. All notices required to be given under this Agreement shall be given in writing, may be sent by facsimile, and shall be effective when actually delivered or when deposited with a nationally recognized overnight courier or deposited in the United States mail, first class, postage prepaid, addressed to the party to whom the notice is to be given at the address shown above. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. Notices shall be given to the parties as follows: TO CDC: Rio Hondo Community Development Commission 8838 E. Valley Boulevard Rosemead, California 91770 Attn.: Executive Director (626) 569-2100 TO CITY: City of Rosemead Development Services Department 8838 E. Valley Boulevard Rosemead, California 91770 Attn.: City Manager (626) 569-2158 TO BORROWER: Rio Hondo Community Development Corporation 11401 Valley Boulevard, Suite 201 El Monte, California 91731 Attn.: President (626) 401-2784 (13) Successors and Assigns. All covenants and agreements contained by or on behalf of Borrower shall bind its successors and assigns and shall inure to the benefit of the City and the CDC, its successors and assigns. Borrower shall not, however, have the right to assign its rights under this Agreement or any interest therein, without the prior written consent of the City and the CDC under Section 12(4). LA #4811-3454-3874 v2 18 (14) Severability. If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. (15) Survival. All warranties, representations, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to the City and the CDC under this Agreement shall be considered to have been relied upon by the City and the CDC and will survive the making of the Loan and delivery to the City and the CDC of the Related Loan Documents, regardless of any investigation made by the City and the CDC. (16) Time is of Essence. Time is of the essence in the performance of this Agreement. (17) Waiver. The City and the CDC shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by the City and the CDC. No delay or omission on the part of the City and the CDC in exercising any right shall operate as waiver of such right or any other right. A waiver by the City or the CDC of a provision of this Agreement shall not prejudice or constitute a waiver of the right of the City and the CDC otherwise demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by the City or the CDC, nor any course of dealing between the City or the CDC and Borrower shall constitute a waiver of any of the rights of the City and the CDC or of any obligations of Borrower as to any future transactions. Whenever the consent of the City and the CDC is required under this Agreement, the granting of such consent by the City and the CDC in any instance shall not constitute continuing consent in subsequent instances where such consent is required, and in all cases, such consent may be granted or withheld in the sole discretion of the City and the CDC. (18) List of Exhibits. Each of the following documents is attached as an exhibit to the Agreement and each in incorporated herein by this reference: Exhibit "A" - Legal Description of the Rental Housing Property Exhibit "B-1" - Program Budget Exhibit 1113-2" - Expense Budget Exhibit "C" - Promissory Note Exhibit "D" - Deed of Trust Exhibit "E" - Affordable Housing Regulatory Agreement LA #4811-3454-3874 Q 19 s • (19) Effective Date of Agreement. This Agreement shall have no force or effect until it has been approved at a public meeting in the sole and absolute discretion of the City and the CDC and executed by the authorized officers of the City and the CDC and the authorized officers of the Borrower. The Effective Date of this Agreement shall be either the date of such approval by the City Council and the CDC Council of the CDC or such other date as may be expressly provided for in such approval of the City and the CDC of the Agreement by the City and the CDC. Signatures on Following Page LA 44811-3454-3874 v2 20 • 0 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF APRIL 22, 2008. CDC Rosemead , Community Development Commission, a municipal corporation AND CITY O ROSEMEAD By: 1 hn Tran ayor and Chairman BORROWER Rio Hondo Community Development Corporation, a California public benefit corporation By: ~15llG1+~4~ /l~C~tw_ Donna Duncan President By: By; 0- &Oliver Chi, City Manager and Executive Director Ap oved As To Form: Joe Montes Burke, Williams & Sorensen, LLP Commission General Counsel Its: AF4gw4Qck gfAm=xxxx LA 44811-3454-3874 Q 21 • • EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 9331 Glendon Way (1 SFD unit on lot) Legal Description: Parcel 3 as shown on Parcel Map No. 5172, in the City of Rosemead, County of Los Angeles, State of California, as per map recorded in Book 57, Page 64 of Parcel Maps, in the office of the County Recorder of said County. City: Rosemead County: Los Angeles State: California Zip Code: 91770-2006 Census Tract: 4329.01 Map Reference: 59647 APN: 8594022042 LA 94811-3454-3874 Q may. i,i uo •au oa:au rrAA 0- 3 0695 GREATER EL MONTE try _ _ X001 Rio Hondo Community Development Corporation a aorrprgM affordable homing and rsmmpaity etaaomk develops' April 17, 2008 lt-fs. Michelle Ramlmz . Economic Development Administrator City of Rosemead 5838 East Valley Blvd, Rosemead, CA 91770 Re; Funding Request for 9331 Glendon Way,Roscntiead,California Dear Ms. Ramirez The Rio Hondo Commalilily Development Corporation jr, pleased to advise you that we recently open escrow for the pmcbase of 9331 Glendon Way m Rosemead with the intent to own and manage the property as affordable rcotel housing fur a Rosemead low-inccmc resident family, as defined by Federal and State laws and reguls ions. Additionally, we plan to remove (demolish) an uo-pem i tted room addition shortly after the close of escrow and Invest approximately $20,000 in property ImpmVe ments over the nenR five years. Toward this mad, we am requesting that the City of Rosemead Redevelopment Agency provido us with S243,2841oan and that the City of Rosemead provide us with a $214,615 HOME Investment Partnerships Program loan. These loans will total $457,899. As detailed in the attached development and operating ptoforma. $445,000 will be used to pmvbasc the properly, $5,000 for demolition of an un-pertmtled room addition, $2,500 for emritonmental inspections and reports, and $5,399 for various soft costs (title, escrow, recordotg, appraisal, etc,), As previously noted, the Glendon Way project will be made available to a low4acome Rosemead family wild eligibility consistent with Federal and stato affordable beushrg program requirements. We are proposing that the initial contract rent be $877 per month, resulting in a monthly housing expense (contract rant + utility allowance) of 5997. We believe that this rent for a high quality standard unit represents an exciting opportunity for a Rosemead family, the City of Rosemead and Rio Hondo CDC. The City of Rosenread's assistance in this matter will be greatly appreciated, please do not hesitate to contact Tom Morgan or myself should you have any questions or need additional information. RIO HONDO COMMUMTY DEVELOPMENT CORPORATION, i By, &ee, L&-,- Donna I- Duncan, President -4 depmmc.w ov®n~a,ncem. 11401 Valley Boulevard, Suite 2014 El Moron, CA, 91731 WT: 626,401.27946P : 626,401,3779 rt dc®sbcglobal-mt ^^~SC°g88$$ pp m I m y ' e d dl o o d ° I e~ f o' ' g `a X • a a~ o• ~ b m u °w • m_ b r a m m C A ~ ~ rF , I ^ M n ~ p O N N , lV Y O ~ ~ N.N M N N M N N N M i v m r O a O ~ + b » P m m C O 0 n N • 0• 0 m m N n ° S a ~ S ~ Ep . g d Y o •o•~~o m m ~ LL W ^ ' ~ V W ° ° m a m y ~ $ J zo,F g$~ m 8 a_ m ~~as ffi~ ]]~~g Via, a9 asj ` ~ p$$ p C $ = ' g F 6W~IL OOt- <~o E h 3 a Y A W 'x •o •X~ m' O O ~~X]°OO XXXX~~2°b mX„1 b O O b O O O O O b O b U m vi N V i° G o o o O o° O CCO C O 9 ~p 7 ~ L » o ~7i o K~(~2 s m ' ' C ' n C U s ou g A L b y r ~S CQ p c m m rll S ~ r CC A CJ m$ c O O LL U Y C fq 0 1 I! N R 9 9 ° V 0 2 J ~ mF3 yS G Q p Q u C ~ N ~ • N of f o a ? 3 ° 3 x x x B x 2 F b O 20 111 ~ W f LL Vj W. J ° » f~ m V .0 ? 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Q ~M W DO O O W 00 M W W O O W W tow I O N b b O~ M N (D_ N M T , r 1J NON b~00 to Ana 20) 0 O p W N A tD O A CD M b W Y O O } ('lvW COtO tO W tDb v bN b b O ~ O ~ ~ v M M N N v v M b y O a N°O ° a m ~ ~i~ ° ° co J b to O O Cl) O b N ( (77 O t0 V ° to N b o b O LL v ~ ~ N b M a - . fn Q V J W~N m000 V W~A ~uf 0 0 r 3O AN OO O O O N N V tD W tO0 • O W O t O O 10 W Z O`O b v.-v N N NIZ Wf r r v ` pn r r vv Q LL O y W n o 0 0 r N N ° O y O z N 0 m Abp v O b O r bfvW M~ O b J N O 0 v t0 O N r t6 V L6 Q Q V C W O m 0 W h V Ol 0 a 0 0 N N W M ~ ~ t i v o o M F y r O ~vW tt6 t .M. .b... t ~).t r0 W r r _b v~v b W N Q U w O m o a LL N c } m > it > m t N m m b C m C E E u m m ~ m ~ C ' m C O E 00 C y N n m t) d' C y y m V a m ~ 8 x m C m i a t r~i u f- tT ~ a y C O a N H y rn 7 x m W m d' C y r 7 xx t11 y ~ C a7 ( m ( m 1 > C y y C 0 d 7 C b y C 0 u ~ w 0 o u l° w L° O c m ° n m o o n~ ° CL E E w O0 O z w 0 ¢ 0 z N e ui rc DEVELOPMENT BUDGET USE OF FUNDS Total %ot 1. Land a. Acquisition - Land & Acq. Related Soft Costs $ 0.0% b. Acquisition-Exlst.lmprovmnts & Related Soft Cost $ 447,700 97.8% $445 offer+ 2700 for dosing cost c. Off-site improvements $ - 0.0% d. Off-site contingency $ 0.0% e. Demolition $ 5,000 1.1% demo unpermitted momlof8ce Total Land $ 452,700 98.9% 2. Construction / Rehab a. Rehab $ - 0.0% b. Rehab $ - 0.0% c. New Construct $ - 0.0% d. Overhead and Profit $ - 0.0% e."Disproportionate Stds"I"Excess Market Costs" $ 0.0% SUBTOTAL $ 0.0% f. Construction Contingency $ 0.0% g. Commerical/Other Non-Residential Construction See separate development bug Total Construction of Improvements $ 0.0% 3. Architect, Engineer, Survey, Etc a. Architect - Design $ - 0.0% b. Architect - Supervision $ - 0.0% a Geotechnical $ 0.0% Total Architect $ 0.0% 4. Survey & Engineering a. Survey & Engineering $ 0.0% 5. Construction Interest & Fees a. Construction Loan Fees $ - 0.0% b. Construction Interest (from below or we comment) $ - 0.0% c. Bond Premium $ - 0.0% e. Insurance - Construction Period $ 0.0% f. Taxes - Construction Period $ - 0.0% g. Title & Recording - Construction Loan $ - 0.0% h. Legal - Construction Loan $ 0.0% Total Construction Interest & Fees $ 0.0% 6. Permanent & Bridge Loan Costs a. Penn. Loan & Credit Enhancement Fees $ - 0.0% b. Bridge Loan Fees $ 0.0% c. Bridge Loan Interest $ 0.0% d. Title & Recording - Penn & Bridge $ - 0.0% a. Perth Legal and Other $ - 0.0% Total Perm Interest & Fees $ 0.0% 7. Other Legal a. Organizational Legal $ - 0.0% b. Other Legal $ - 0.0% Total Legal $ 010% B. Reserves a. Captialized Reserves $ 0.0% b. Lease-up Reserves (=6 months Op. Exp.) $ 0.0% Total Reserves $ 0.0% 9. Appraisal a. Appraisal $ 0.0% 10. Other a. TCAC Fees (from "Basis..." worksheet)--- $ 0.0% b. Environmental Audit $ 2,500 0.5% Rawmeed_9331_G endon_Wey (4). Development. 3 of 6 DEVELOPMENT BUDGET USE OF FUNDS Total %of. c Local Development Impact Fees $ - o.0% d. Permit Processing Fees $ - 0.0% e. Capital Fees $ - 0.0% f. Marketing $ - 0.0% g. Relocation $ - 0.0% .h. Furnishings $ - 0.0% i. Market Study $ - 0.0% J. Other: Environmental Mitigation $ - 0.0% Other. ' $ - 0.0% Other : Soft Cost Contingency $ 2,699 0.6% Total Other Costs $ 5,199 1.1% 11. Developer Costs a. Developer Fee Off Project Budget - $13,000 CHDO O.E. Grant h. ConsultanU Processing Agent $ 0.0% c. Project Administration $ - 0.0% d. Construction Management Oversight $ - 0.0% e. Other $ - 010% Total Developer Costs $ . 0.0% TOTAL PROJECT COSTS $ 457,899 1ao% Per Unit $ 457,899 Syndication Costs $ - 0.0% TOTAL DEVELOPMENT COSTS $ 457,899 1oo.o% Roeemead_9771_GlmMon_Wey (4), Development, 4 of 5 MORTGAGE WORKSHEET Tenn $ 55 Interest rate 0.0% Amount $ 243,284 Scheduled Payment (if any) $ - ME=M'31 Tenn 55 Interest Rate 0.0% Amount $ 214,815 Scheduled Payment ('If any) $ - Terre 0 Interest Rate 0.0% Amount $ - Scheduled Payment ('If any) $ _ Tenn 0 Interest Rate 0.0% Amount $ - Scheduled Payment (If any) $ Ras ead_9331 Glendon_Way (4),Mortgagea,5 of8 m 'm .p LL LL m W N N N W W W W W N m N i m m n n LL LL m fA cN} N /A tryNN NN N.. yqq N P- 94 m to cm 0! 4z) co M _ Z A m m V) N W N N W V9 N N N N N W N m a' ~ a to 64 W W WNNN W N (A W e• h 4m m m ~T N V)°) m r m m ~ N N LL LL . m N N W W N W W W W N N OM00 Oico m ~ 0 m LL LL f N W W N N W W W N N g. N e9 N`. co q ' y ' ' w IS to m m LL U. N W N N W N NNW N . 00 ~t-VD W 94 cl co~ i i O vi WNWNNW 6.> 6.3. w W Z y m C Q O an ac n d K « m h a rn ix f° r m N C m Rm' m to m C W N rn rn c N m a 7 m Q V ..W W~ 3~ ma9c- C m Q~_WmC7 C in miami ° am'~maE_~ww woo W x a t9 c 2 2 m u 2 m J 2 d m 0 o Ol X Y 3 N o w F= O O N O O x J m~ gm~3v~►-ma o IL -j xa`a 0 m 0 m IA C m N N 0 m m C a z m 3i 5 ~I n m 0 rc • • EXHIBIT B-1" PROGRAM BUDGET LA 94811-3454-3874 Q • EXHIBIT "B-2" EXPENSE BUDGET r~ U (Subsequent Advance - to be submitted with request of Borrower for disbursement of Advance to acquire Development Property) LA 84811-3454-3874 Q • • EXHIBIT "C" PROMISSORY NOTE LA #4811-3454-3874 v2 • • HOME INVESTMENT PARTNERSHIP PROGRAM PROMISSORY NOTE Secured by a Deed of Trust For Multiple Real Property Parcels Executed By Rio Hondo Community Development Corporation In Favor of the City of Rosemead, California And the Rosemead Community Development Commission [55-YEAR TERM] Amount: $ Date: April 22, 2008 NOT TO EXCEED $243,284 Low/Mod Set-Aside Funding $214,615 HOME Funding $457,899 Total BORROWER(S) PROMISE TO REPAY FOR VALUE RECEIVED, the undersigned, Rio Hondo Community Development Corporation (hereinafter, "RHCDC"), a California public benefit corporation, whose address is 11401 Valley Boulevard, Suite 201, Rosemead, California, 91731 (hereafter referred to as "BORROWER"), hereby promises to pay to the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a California municipal corporation (hereinafter, "CDC"), or its order, the sum total of Two Hundred Forty-Three Thousand Two Hundred and Eighty-Four Dollars ($243,284.00), and to the CITY OF ROSEMEAD, a public body (hereinafter, "CITY'), or its order, the sum total of Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00), and in such manner as set forth in this promissory note and the Related Documents (defined below), in lawful money of the United States of America. A. DEFINITIONS. The following definitions shall apply throughout this Note: 1. Property. "Property" shall collectively mean the real property parcel described in Exhibit "A" attached to this NOTE and made a part of hereof. This Property shall serve as security for the NOTE by way of a single deed of trust. 2. REGULATORY AGREEMENT: "REGULATORY AGREEMENT" means that certain same dated HOME Investment Partnership Funds Regulatory Agreement by and between the City of Rosemead, the CDC, and Rio Hondo Community Development Corporation. 3. DEED OF TRUST. The term "DEED OF TRUST" means that same dated trust deed evidencing the real property security for this Note with Borrower as Trustor, CITY and CDC as Beneficiaries, and United Title Company as Page 1 LA #4829-1247-0018 Q • • Trustee. (The form of the DEED OF TRUST is attached hereto as Exhibit 4. Principal Sum. The term "Principal Sum" means the principal indebtedness of Two Hundred Forty-Three Thousand Two Hundred and Eighty-Four Dollars ($243,284.00) and Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00), for a sum total of Four Hundred and Fifty Seven Thousand Eight Hundred and Ninety-Nine Dollars ($457,899.00), evidenced by this NOTE, excluding any interest or other fees the CITY or the CDC may be owed pursuant to this NOTE and/or the Related Documents. i 5. Loan: The term "Loan" means the loan evidenced by this NOTE and granted to the BORROWER pursuant' to the terms, conditions, restrictions and covenants of the REGULATORY AGREEMENT and the Related Documents. 6. Promissory Note. "NOTE" means the instant promissory note. 7. Affordability Period. The term 'Affordability Period" means the fifty-five (55) year period commencing from the date the REGULATORY AGREEMENT is recorded. 8. Related Documents. The term "Related Documents" means the CONVENANTS, CONDITIONS AND RESTRICTIONS, DEED OF TRUST, LOAN AGREEMENT and the REGULATORY AGREEMENT. TERMS A. INTEREST. Interest shall accrue at a rate of ZERO PERCENT (0%) per annum convening on April 22, 2008, on all outstanding indebtedness evidenced by this NOTE-until the NOTE is paid in full. B.TIME AND MANNER OF PAYMENT. The indebtedness evidenced by this NOTE shall be repaid by the BORROWER in the following manner: 1. BORROWER shall repay the su;m loaned by the CITY in the amount of Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00) at the end of the fifty-five-year; term of this NOTE. In the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS as further described in Section E, the CITY is entitled to immediate repayment. 2. BORROWER shall only be required to pay back the Sum loaned by the CDC in the amount of Two Hundred Forty-Three Thousand Two Hundred and Page 2 LA #4829-1247-0018 Q Eighty-Four Dollars ($243,284.00) in the event that the BORROWER breaches or defaults and fails to cure any of the covenants, restrictions, terms, promises or provisions of this NOTE or any of the RELATED DOCUMENTS as further described in Section E. C. ASSIGNMENT. BORROWER may not assign its interest or obligations in this NOTE without the prior written consent of the CITY and the CDC. Any request for assignment must be made to the CITY and the CDC in writing no less than sixty (60) days prior to the proposed assignment date. Any request for assignment must be accompanied by financial documentation demonstrating the creditworthiness and financial assets of the proposed assignee and the assignees ability to properly operate the Property. The decision to approve the assignment shall be the sole discretion of the CITY and the CDC. D. SECURITY. This NOTE is secured by a voluntarily subordinated DEED OF TRUST in the Property. E. DEFAULT UNDER NOTE, TRUST DEED. REGULATORY AGREEMENT, CONVENANTS. CONDITIONS AND RESTRICTIONS OR LOAN AGREEMENT Notwithstanding any other provisions of this NOTE, if default occurs in any of the covenants or agreements contained herein or the Related Documents, the Principal Sum shall be immediately due and payable in full at the option of the CITY and the CDC. Failure by the CITY and the CDC to exercise its option to accelerate in the event of a default shall not constitute waiver of the right to exercise such option in the event of the same or any other default. Further, the occurrence of a default shall not relieve the BORROWER or any subsequent owner of the Property from adhering to the affordability restrictions contained herein or in the Related Documents. F. DUE ON SALE. CITY and CDC may, at its option, declare immediately due and payable all sums secured by the DEED OF TRUST upon the sale or transfer, without the CITY's or the CDC's prior written consent, of all or any part of the Property, or any interest in the Property. Except as set forth in the REGULATORY AGREEMENT a "sale or transfer" means the conveyance of Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land, contract, contract for deed, leasehold interest, lease option contact, or by sale, assignment or transfer of any beneficial interest in or to any land trust holding title to the Property or by other method of conveyance of property interest. G. ATTORNEYS FEES. If any default or dispute gives rise to litigation, the prevailing party in such litigation shall pay reasonable attorney fees and costs and expenses incurred by the non-prevailing in connection with any such default or any other action or other proceeding brought to enforce any of the provisions of this NOTE. The prevailing party's right to such fees shall be valued at customary and Page 3 LA #4829-1247-0018 Q reasonable rates for private sector legal services. H. MODIFICATION: This NOTE may not be modified or amended, except by mutual agreement of the parties and then only if such agreement is made by written instrument expressing such intention, which writing must be so firmly attached to this NOTE so as to become a permanent part thereof. , 1. SEVERABILITY. The covenants of this NOTE are severable. Invalidation of any covenant or any part thereof by law, judgment, or court order shall not affect any other covenants. J. PLACE OF REPAYMENT. BORROWER shall make payment of all amounts due to CITY and the CDC under this NOTE to the City of Rosemead, 8838 E. Valley Boulevard, Rosemead, CA 91770, or such other address as CITY or the CDC may designate in writing to BORROWER. K. BORROWER'S WAIVERS. BORROWER waives any rights to require the CITY or the CDC to do the following: (1) to demand payment of amounts due (known as a "presentment"); (2) to give notice that amounts due have not been paid (known as "notice of dishonor"); (3) to obtain an official certificate of nonpayment (known as a "protest"). L. GIVING OF NOTICES. Any notice that must be given to the CITY and the CDC under this NOTE will be given by hand delivery or mailing it certified mail to the Rosemead Development Services Department at 8838 E. Valley Boulevard, Rosemead, CA 91770. Any notice that must be given to the BORROWER will be given by hand delivery or mailing it certified mail to the BORROWER at Rio Hondo Community Development Corporation, a California public benefit corporation, whose address is 11401 Valley Boulevard, Suite 201, El Monte, California, 91731. Each party agrees to provide the other with thirty (30) days written notice of any change of address. M. NON-RECOURSE PROVISION. The indebtedness evidenced by this NOTE and secured by the DEED OF TRUST is a non-recourse obligation of the BORROWER. Neither the BORROWER nor any other party shall have any personal liability for repayment of the loan indebtedness. Except as otherwise provided in this NOTE or the Related Documents, the sole recourse of the CITY and the CDC for repayment of the principal and interest shall be the exercise of the CITY'S or the CDC's right to foreclose on the Property and all structures and improvements constructed thereon. The following shall apply notwithstanding the foregoing: (a) If the BORROWER executes, or has executed, a Project-related loan agreement, which provides that the BORROWER'S board shall be personally liable for repayment of the loan, such provisions shall be deemed to apply to Page 4 LA 44829-1247-0018 v2 the BORROWER with equal force. (b) Nothing in this Section shall be interpreted as relieving the BORROWER from all other duties imposed upon them under this NOTE or the Related Documents. N. UNAPPROVED SALES OR TRANSFERS. Except for the provisions regarding tenancy set forth in the REGULATORY AGREEMENT, if the BORROWER otherwise sells or transfers the Property, any portion thereof, or any structures and improvements constructed thereon without the prior written approval of the CITY and the CDC, all principal and interest owning on the NOTE shall be immediately due and payable to the CITY and the CDC. The phrase "sells or transfers" means the conveyance of Property (or any portion thereof) or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest, lease option contract, or by sale, assignment or transfer or any beneficial interest in or to any land trust holding title to the property or by other method of conveyance of a property interest. The phrase "sells or transfers" does not include a conveyance of an interest in the Property or any structures and improvements constructed thereon if such conveyance is authorized by the CITY and the CDC in writing. 0. AUTHORIZATION: BORROWER'S signatories to this NOTE warrant, represent and agree that they are duly authorized to bind BORROWER in the manner set forth in this NOTE. Notwithstanding Section M, above, BORROWER'S signatories further warrant, represent and agree that they shall be joint and severally liable and responsible for adhering to all of the terms and conditions imposed upon the BORROWER under this NOTE and the other Related Documents. Page 5 LA #4829-1247-0018 Q 0 • BY SIGNING BELOW, THE BORROWER ACCEPTS AND AGREES TO THE TERMS CONTAINED IN THIS NOTE DATED THE 22ND DAY OF APRIL 2008. BORROWER RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, A California public benefit corporation By: lC L~/1 Donna Duncan, President Rio Hondo Community Development Corporation, Date: -f-b i By: Date: Page 6 LA #4829-1247-0018 Q i • EXHIBIT `A' LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 9331 Glendon Way (1 SFD unit on lot) Legal Description: Parcel 3 as shown on Parcel Map No. 5172, in the City of Rosemead, County of Los Angeles, State of California, as per map recorded in Book 57, Page 64 of Parcel Maps, in the office of the County Recorder of said County. City: Rosemead County: Los Angeles State: California Zip Code: 91770-2006 Census Tract: 4329.01 Map Reference: 596-J7 APN: 8594022042 Page 7 LA #4829-1247-0018 v2 EXHIBIT'B' DEED OF TRUST Page 8 LA 44829-1247-0018 Q 0 0 O 0 This page is part of your document - DO NOT DISCARD A A - - - - 20080944597 023 es: Recorded/Filed in Official Records Fee: 0.00 Recorder's Office, Los Angeles County, California Tax: 0.00 Other: 0.00 05129/08 AT 08:OOAM Total: 0.00 j Title Company, TITLE(S) : IIIIiYIIII11I 111111111 A i i Assessor's Identification Number (AIN) To be completed by Examiner OR Title Company in black ink. Number of AIN's Shown - E... THIS FORM IS NOT TO BE DUPLICATED I ' O RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF ROSEMEAD 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Michelle Ramirez ~J _ o5/2sioa, 111111 VIII VIII VIII VIII VIII VIII VIII VIII VIII VIII IIII III 20080944597 2 Exempt from Recording Fee per I Government Code Section 27383 3 o Z 3 3 Z ' (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) 9331 Glendon Way AFFORDABLE HOUSING DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS by RIO HONDO COMMUNITY DEVELOPMENT CORPORATION a California non-profit corporation For the benefit of THE CITY OF ROSEMEAD, and THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION [Reference dated as of April 22, 20081 LA #4853-2294-8866 VI e • j t;P Cap This AFFORDABLE HOUSING DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS ("CC&Rs") dated April 22, 2008 is made by RIO HONDO COMMUNITY DEVELOPMENT CORP., ("RHCDC") a California non-profit corporation and community housing development organization, for the benefit of the CITY OF ROSEMEAD ("City") and the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION ("CDC"). The City, CDC and the RHCDC are sometimes referred to in these CC&Rs, individually, as a "Party" and, collectively, as "Parties." These CC&Rs are entered into with reference to the following recitals of fact ("Recitals"): RECITALS A. The City, CDC and the RHCDC have entered into that certain Regulatory Agreement, dated April 22, 208 (the "Agreement"). The Agreement provides for, among other things, the acquisition of the Property described hereto in Exhibit 1, and the minor renovation and operation of same as a single family rental property for a low- to moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) household (the "Project") by RHCDC. Financing for such acquisition and renovation has been provided by City and CDC in the form of funds from the City's allocation of Federal HOME funds and the CDC's low and moderate income set aside funds. B. The terms of the Agreement require that certain affordability restrictions remain in full force and effect on the Property for a term of fifty-five (55) years following the recordation of a Certificate of Completion for the Project in order to ensure that an affordable low- to moderate-income (0 to 80% of Area Median Income) rental property (as defined under the HOME Investment Partnership Regulations) in the Project is restricted for lease to households at the low- to moderate-income affordability level, as further defined herein. NOW, THEREFORE, THE RHCDC DOES COVENANT AND AGREE ON BEHALF OF ITSELF, ITS SUCCESSORS AND ASSIGNS AS FOLLOWS: 1. Definitions of Certain Terms. As used in these CC&Rs, the following words and terms shall have the meaning as provided in the Recitals or in this Section 1, unless the specific context of usage of a particular word or term may otherwise require: 1.1 Low Income Household. The term "Low Income Household" shall mean an individual or household that has an annual income that does not exceed fifty percent (50%) of the area median income ("AMI") adjusted for family size for Los Angeles County as established and amended from time to time by HUD. 1.2 Moderate Income Household. The term "Moderate Income Household" shall mean an individual or household that has an income that does not exceed eighty percent (80%) of the area median income ("AMI") adjusted for family size for Los Angeles County as established and amended from time to time by HUD. 1.3 Affordable Rent. The term "Affordable Rent" shall have the same meaning as set forth in California Health and Safety Code Section 50053, and in 24 CFR Part 92.252, as those sections may hereafter be amended from time-to-time, and shall provide an LA 44853-2294-8866 vl I y 0 0 allowance for utilities and maintenance costs established by the State of California Department of Housing and Community Development, in accordance with adjustment factors adopted and amended by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937. To the extent there is a conflict between the definitions/calculations found in Federal and State Law, the calculation that yields the lowest rent shall be used. 1.4 Certificate of Completion. The term "Certificate of Completion" shall mean the written certification of the CDC that the development of the Project is complete and in compliance with the terms and conditions of the Agreement. 1.5 Qualifying Household. The words "Qualifying Household" shall mean a household that has an income that does not exceed the Qualifying Household Income applicable to the unit occupied or to be occupied by such household. 1.6 Qualifying Household Income. The words "Qualifying Household income" mean a household income that does not exceed, at the commencement of the occupancy of such unit and upon any renewal of a lease, which allowed to a Moderate Income Household. 1.7 Term. The word "Term" shall mean the period of time beginning on the date of the recordation of the Certificate of Completion for the Project and ending on the fifty- fifth (55th) anniversary thereafter. 2. Covenant of RHCDC to Rent to Qualifying Households; Covenant of RHCDC to Charge Affordable Rent; Covenants of RHCDC Regarding Maintenance of Records. 2.1 During the Term, the RHCDC covenants that the Project shall at all times be occupied or held vacant and available for rental at an Affordable Rent, with the Property leased to Moderate Income Households at an Affordable Rent calculated for such households. 2.2 Determination of Qualifying Household Income shall be made by the RHCDC at the time of initial occupancy of a unit and upon each renewal of a Qualifying Household's lease. The RHCDC shall obtain, prior to initial occupancy and upon each lease renewal and, thereafter, maintain on file, income certifications from each Qualifying Household renting any of the units in the Project in the form provided in Exhibit 2 attached hereto and incorporated herein by reference. The RHCDC shall make a good faith effort to verify that the income information provided by an applicant (or occupying Qualifying Household) in an income certification is accurate by taking one or more of the following steps as a part of the verification process: 2.2.1 Obtain an income tax return for the most recent tax year; 2.2.2 Obtain an income verification form from the applicant's current employer; 2.2.3 Obtain an income verification form from the United States Social Security Administration and/or the California Department of Social Services, if the applicant receives assistance from either of such agencies; or LA 44853-2294-8866 v1 2 2.2.4 If the applicant is unemployed and has no such tax return, obtain another form of independent verification. 2.3 All such verification information described in Section 2.2 shall only be obtained by the RHCDC after obtaining the Qualifying Household's written consent for the release of such information to the RHCDC. On the annual anniversary of the occupancy of the property, the RHCDC shall recertify the household income of the Qualifying Household occupying such unit. Any tenants whose income no longer qualifies due to increases in household income shall be required to vacate the property at the conclusion of their leases. Copies of any and all completed tenant income certifications shall be available to the City and CDC upon request. 2.4 The RHCDC covenants that no Qualified Household shall pay an amount in excess of Affordable Rent for such Qualified Household's income level. 2.5 Rent increases shall comply with the requirements of 24 CFR Part 92.252, and sections amendatory and supplementary thereto. 2.6 The RHCDC and all Qualifying Households shall permit the City and CDC to conduct inspections of the Property and the Project from time-to-time for purposes of verifying compliance with these CC&Rs, upon two (2) calendar days prior written notice to the RHCDC. 2.7 Records shall be established and maintained by the RHCDC relating to the use and occupancy of the Property and the Project for affordable rental housing use purposes, as authorized herein. The RHCDC shall be responsible for establishing and maintaining such records during the Term of these CC&Rs, and the RHCDC shall provide the City and CDC with copies of such records within thirty (30) calendar days of written request by the City or CDC. 2.8 Commencing on the June 30 following the first (1st) anniversary of the date of recordation of these CC&Rs, and on each June 30 thereafter during the Term, RHCDC shall submit a report to the City and CDC, in the form provided in Exhibit 3, attached hereto and incorporated herein ("Annual Report"). The Annual Report shall include for the property in the Project, the rent, income, and family size of the Qualifying Household occupying the property. The Annual Report shall also state the date the tenancy commenced and such other information as the CDC may be required by law to obtain; provided, however, that the CDC shall take reasonable steps to maintain the confidential nature of the information contained in any Annual Report specifically relating to the property. The RHCDC shall provide any additional information reasonably requested by the City or CDC, including without limitation Project- related income and expense accounting information. 2.9 The City and CDC shall have the right to examine and make copies of all books, records or other documents of the RHCDC which pertain to any unit; provided, however, that the City and CDC shall take reasonable steps to maintain the confidential nature of such information. The RHCDC shall maintain complete, accurate and current records pertaining to the units, the Property and the Project, and shall permit any duly authorized representative of the City or CDC (during normal business hours and upon not less than seventy-two (72) hours LA #4853-2294-8866 vl 3 o • notice) to inspect such records, including records pertaining to income and household size of Qualifying Households; provided, however, that the City and CDC shall take reasonable steps to maintain the confidential nature of information relating to any specific household. 3. Covenant of RHCDC Regarding Contract Terms For Units in the Project. The RHCDC for itself, its successors and assigns hereby covenants and agrees that, in connection with the rental/lease of units in the Project to Qualifying Households during the Term, it shall comply with the following requirements: 3.1 The rental agreement or lease between the RHCDC and the Qualifying Household shall be for not less than one (1) year, and shall be consistent with the requirements of 24 CFR Part 92.253, and sections amendatory and supplementary thereto. 3.2 The RHCDC shall not terminate the tenancy or refuse to renew the rental agreement or lease of a Qualifying Household, except for serious or repeated violations of the terms and conditions of the rental agreement or lease; for violation of applicable federal, state, or local law; or for other good cause. The RHCDC shall, in connection with a termination of a tenancy or a refusal to renew a rental agreement or lease, serve written notice upon the Qualifying Household specifying the grounds for the action, at least thirty (30) calendar days before the termination of the tenancy. 3.3 The RHCDC shall adopt written tenant selection policies and criteria that: 3.3.1 are consistent with the purpose of providing housing for individuals who have an income that is no more than the Qualifying Household Income; 3.3.2 are reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; 3.3.3 provide for the selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and 3.3.4 give prompt written notification to any rejected applicant of the grounds for rejection. 3.4 All units shall be available at an Affordable Rent for occupancy on a continuous basis to the appropriate Qualifying Households. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit. All deeds, leases or contracts made or entered into by the RHCDC as to the units, the Project or the Property or any portion thereof, shall contain covenants prohibiting discrimination, as prescribed by these CC&Rs and as required by California Health and Safety Code section 33436. Additionally, RHCDC agrees to comply with the non-discrimination requirements of 24 CFR Part 92.350.. CJ LA #4853-2294-8866 vl 4 ® 0 4. Development and Management of the Proiect. 4.1 The RHCDC shall be responsible for management of the Project, including, without limitation, the selection of Qualifying Households, certification and recertification of household size, and income of tenants of all units, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. Neither the City nor the CDC shall have any responsibility for the management or operation of the Project or the Property.' The Project shall at all times be managed by RHCDC or an experienced management agent ("Management Agent") reasonably acceptable to the City and CDC, with demonstrated ability to operate residential rental facilities similar to the Project in a manner that will provide decent, safe, and sanitary housing. For the purposes hereof, if the RHCDC directly performs the functions of the Management Agent by its employees or by means of a service contract with an entity which is a partner in the RHCDC, such a Management Agent shall be deemed approved by the City and CDC. If the Management Agent is an entity or person other than the RHCDC, its employees, a partner in the RHCDC or an entity owned or controlled by the RHCDC or which owns and/or controls the RHCDC, the RHCDC shall submit for the City's and CDC's approval the identity of any proposed Management Agent, together with additional information relevant to the background, experience and financial condition of any proposed Management Agent, as reasonably requested by the City and CDC. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the City and CDC shall approve the proposed Management Agent by notifying the RHCDC in writing. 4.2 The RHCDC shall cause to be in full force and effect during the Term hereof insurance coverage, as follows: 4.2.1 not in derogation of the indemnity provisions of this Section, the RHCDC shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of at least One Million Dollars ($1,000,000) for any person, One Million Dollars ($1,000,000) for any occurrence, and One Million Dollars ($1,000,000) property damage naming the City and CDC as additional insureds. RHCDC shall also insure the Property (fire, etc.) for the full acquisition amount. 4.2.2 a policy of workers' compensation insurance in such amount as will fully comply with the California laws and which shall indemnify, insure and provide legal defense for the RHCDC against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the RHCDC in the course of carrying out the activities in these CC&Rs. 4.2.3 a policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence and (ii) property damage liability limits of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) per occurrence and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) in the aggregate. Said policy shall include coverage for owned, non-owned, leased and hired vehicles. LA 94853-2294-5866 vl 5 o • 4.3 All policies of insurance shall be primary insurance and shall name the City and the CDC, and their officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the City and/or the CDC and their officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) calendar days prior written notice by registered mail to the City and CDC. In the event any of said policies of insurance are canceled, the RHCDC shall, prior to the cancellation date, submit new evidence of insurance in conformance with Section 4.3 to the City Manager/CDC Executive Director. No operation of the Project shall commence until the RHCDC has provided the City and CDC with certificates of insurance or appropriate insurance binders evidencing the above insurance coverage, and said certificates of insurance or binders are approved by the City and CDC. 4.4 The policies of insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated at least "A" or better in the most recent edition of Best Insurance Rating Guide or an equivalent rating in The Key Rating Guide or in the Federal Register unless such requirements are modified or waived by the Executive Director of the CDC due to unique circumstances. 4.5 The RHCDC agrees that the provisions of Section 4 shall not be construed as limiting in any way the extent to which the RHCDC may be held responsible for the payment of damages to any persons or property resulting from the RHCDC's activities or the activities of any person or persons for which the RHCDC is otherwise responsible. 5. Maintenance of the Project. The RHCDC, for itself, its successors and assigns, hereby covenants and agrees that the Project shall be maintained in good repair and in a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time during the Term, there is an occurrence of an adverse condition on any area of the Project in contravention of the general maintenance standard described above, ("Maintenance Deficiency") then the City or CDC shall notify the RHCDC in writing of the Maintenance Deficiency and give the RHCDC thirty (30) calendar days from the date of such notice to cure the Maintenance Deficiency as identified in the notice. The words "Maintenance Deficiency" include without limitation: (i) failure to properly maintain the windows, structural elements, and painted exterior surface areas of the dwelling units in a clean and presentable manner; (ii) failure to keep the Project free of accumulated debris, appliances, inoperable motor vehicles or motor vehicle parts, or free of storage of lumber, building materials or equipment not regularly in use on the Property; (iii) failure to regularly maintain, replace and renew the landscaping in a reasonable condition free of weed and debris; (iv) graffiti on the Property; and (v) the use of garage area on the Project for purposes other than the parking of motor vehicles and the storage of personal possessions and mechanical equipment of persons residing in the Project. 5.1 In the event the RHCDC fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the City or CDC may cause such Maintenance Deficiency to be cured or corrected. Any sum expended by the City or CDC for the abatement of a Maintenance Deficiency as authorized by this Section 5.1 shall become a lien on the Project. If the amount of the lien is not paid within thirty (30) calendar days after written ,demand for x LA 94853-2294-8866 vl 6 y payment by the City or CDC to the RHCDC, the City or CDC shall have the right to enforce the lien in the manner as provided in Section 5.2. 5.2 The Parties hereto further mutually understand and agree that the rights conferred upon the City and CDC under this Section 5 expressly include a right of entry for the purpose of correcting any uncured Maintenance Deficiency and the power to establish and enforce a lien or other encumbrance against the Property in the manner provided under California Civil Code Sections 2924, 2924b and 2924c in the amount as reasonably necessary to restore the Project to the maintenance standards required under Section 5.1, including attorneys fees and costs of the City and CDC associated with the abatement of the Maintenance Deficiency and the collection of the costs of the City and CDC in connection with such action. In any legal proceeding for enforcing such a lien against the Project, the prevailing party shall be entitled to recover its attorneys' fees and costs of suit. 6. Covenants to Run With the Land. The RHCDC hereby declares its specific intent that the covenants, reservations and restrictions set forth herein are part of a plan for the promotion and preservation of affordable housing by the City and CDC and that each shall be deemed covenants running with the land and shall pass to and be binding upon the Property and each successor-in-interest of the RHCDC in the Property for the Term. The RHCDC hereby expressly assumes the duty and obligation to perform each of the covenants and to honor each of the reservations and restrictions set forth in these CC&Rs. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any interest therein 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. 7. Burden and Benefit. The RHCDC hereby declares its understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the RHCDC's legal interest in the Property is affected by the affordable dwelling use and occupancy covenants hereunder. The RHCDC hereby further declares it's 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 Property by the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the affordable housing goals and objectives of the City and CDC. 8. Term. The provisions of these CC&Rs shall apply to the Property for a term of fifty-five (55) years following the date of recordation of the Certificate of Completion for the Project. 9. Defaults. 9.1 Events of Default. The occurrence of any of the following is a default and shall constitute a material breach of these CC&Rs and, if not corrected, cured or remedied in the time period set forth in Section 9.2, shall constitute an "Event of Default" hereunder: 9.1.1 failure of the RHCDC or any person under its direction or control to comply with or perform when due any material tern, obligation, covenant or condition LA #4853-2294-8866 v1 7 • • IG contained in these CC&Rs, including, but not limited to, the affordability and maintenance covenants contained herein; 9.1.2 any warranty, representation or statement made or furnished to the City or CDC by the RHCDC under these CC&Rs is false or misleading in any material respect either now or at the time made or furnished; 9.1.3 the dissolution or termination of the existence of the RHCDC as an ongoing business, insolvency, appoint of a receiver for any part of the property of the RHCDC, any assignment for the benefit of creditors, any type of creditor workout or the commencement of any proceeding under any bankruptcy or insolvency laws by or against the RHCDC. 9.1.4 any violations of the provisions of the CC&Rs, Regulatory Agreement, Deed of Trust, Loan Agreement, Promissory Note, or any related agreements, including the failure to operate or make the Rental Housing Facility available for occupancy to persons and households of low- and moderate-income, by RHCDC is a default as to all documents, and the City and the CDC reserve the right to exercise any and all remedies under the law against RHCDC, as provided for in Section 10 of this Agreement. 9.2 Notice of Default. The City or CDC shall give written notice of default to the RHCDC, stating that such notice is a "Notice of Default," specifying the default complained of by the City or CDC and requiring the default to be remedied within thirty (30) calendar days of the date of the Notice of Default. Except as required to protect against further material damage, the City and CDC may not institute legal proceedings against the RHCDC until thirty (30) calendar days after giving notice. Failure or delay in giving notice shall not constitute a waiver of any default, nor shall it change the time of occurrence of the default. If the default specified in the Notice of Default is such that it is not reasonably capable of being cured within thirty (30) calendar days, and if the RHCDC initiates corrective action within said thirty (30) calendar day period and diligently works to effect a cure as soon as possible, then the RHCDC may have such additional time as authorized in writing by the City or CDC as reasonably necessary to complete the cure of the breach prior to exercise of any other remedy for the occurrence of an Event of Default. Such authorization for additional time to cure shall not be unreasonably withheld. If the RHCDC fails to take corrective action relating to a default within thirty (30) calendar days following the date of notice (or to complete the cure within the additional as may be authorized by the City or CDC), an Event of Default shall be deemed to have occurred. 9.3 Inaction Not a Waiver of Default. Any failure or delays by the City or CDC in asserting any of their 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 City or CDC in asserting any of their rights and remedies shall not deprive the City or CDC of their right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 10. Remedies. Upon the occurrence of an Event of Default, the City and CDC shall, in addition to the remedial provisions of Section 5 as related to a Maintenance Deficiency at the Property, be entitled to seek any appropriate remedy or damages by initiating legal proceedings LA #4853-2294-8866 vi 8 o • as follows: (i) by mandamus or other suit; action or proceeding at law or in equity, to require the RHCDC to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the City or CDC; or (ii) by other action at law or in equity as necessary or convenient to enforce the obligations, covenants and agreements of the RHCDC to the City and CDC. 10.1 Deed of Trust and Foreclosure. Pursuant to the Agreement, City and CDC have obtained promissory notes and deeds of trust recorded against the Property, securing financing provided by. the City and CDC. To the extent such notes and deeds of trust remain on title to the Property, RHCDC covenants and understands that any Event of Default shall be grounds for exercising the City's and CDC's remedies under the notes and deeds of trust. 10.2. Rights and Remedies are Cumulative. The rights and remedies of the City and CDC as set forth in this Section 10 are cumulative and the exercise by the City and CDC of one or more of such rights or remedies shall not preclude the exercise by them, at the same or different times, of any other rights or remedies for the same default or any other default by the RHCDC. 10.3 Enforcement by Third Parties. No third party shall have any right or power to enforce any provision of these CC&Rs on behalf of the City or CDC or to compel the City or CDC to enforce any provision of these CC&Rs against the RHCDC or the Project. 11. Governing Law. These CC&Rs shall be governed by California and federal regulations and laws. 12. Amendment. These CC&Rs may be amended after their recordation only by a written instrument executed by the RHCDC, City and CDC. 13. Attorneys' Fees. In the event that a Party brings an action to enforce any condition or covenant, representation or warranty in these CC&Rs or otherwise arising out of these CC&Rs, the prevailing Party in such action shall be entitled to recover from the other Party reasonable attorneys' fees to be fixed by the court in which a judgment is entered, as well as the costs of such suit. 14. Severability. If any provision of these CC&Rs shall be declared invalid, inoperative or unenforceable by a final judgment or decree of a court of competent jurisdiction such invalidity or unenforceability of such provision shall not affect the remaining parts of these CC&Rs which are hereby declared by the parties to be severable from any other part which is found by a court to be invalid or unenforceable. 15. Time is of the Essence. For each provision of these CC&Rs which states a specific amount of time within which the requirements thereof are to be satisfied, time shall be deemed to be of the essence. 16. Notice. Any notice required to be given under these CC&Rs shall be given by the City, CDC or by the RHCDC, as applicable, by personal delivery or by First Class United States mail at the addresses specified below or at such other address as may be specified in writing by the Parties hereto: j LA #4853-2294-8866 vl 9 ~L to the RHCDC: Rio Hondo Community Development Corporation 1104 Valley Boulevard, Suite 201 El Monte, California 91731 0 oo, to the City: Rosemead Community Development Commission 8838 E. Valley Boulevard Rosemead, California 91770 Attention: City Manager/ Executive Director • iz with copy to: with copy to: Burke, Williams & Sorensen, LLP 444 South Flower, Suite 2400 Los Angeles, California 90071 Attention: Joseph Montes Notice shall be deemed given five (5) calendar days after the date of mailing to the Party, or, if personally delivered, when received by the City Manager of the City, Executive Director of the CDC or the RHCDC, as applicable. LA #4853-2294-8866 v I 10 s • 13 IN WITNESS WHEREOF, the RHCDC has caused these CC&Rs to be signed, acknowledged and attested on its behalf by duly authorized representatives, approved as to form and accepted by the CDC and City as set forth below as of the 22"d Day of April 2008. Rio Hondo Community Development Corporation, a California public benefit corporation Donna Duncan, President Accepted and Approved: City of Rosemead John r n, Mayor Gloria Molleda, City Clerk Rosemead Community Development Commission Oliver Chi, Executive Director Attest: V - 614' ~A Gloria Molleda, Secretary !R T G~ l 1 "+y LA #4853-2294-8866 v1 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA } } S.S. COUNTY OF Los Angeles } On May 21, 2008 before me, Maria Raygoza, Notary Public, personally appeared Donna L. Duncan, President, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person 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. ~aac - Aa MARIA RAYGOZA WITNESS my hand and offici seal. COMM. #1501679 c NOTARY PUBLIC - CALIFORNIA LOS ANGELES COUNTY Signature My Comm. Expires JUL. 19,2008 l9U-C- This area for official notarial seal. TO ONLY BE ATTACHED TO AFFORDABLE HOUSING DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS DATED APRIL 22, 2008 e • I/ J EXHIBIT 1 Legal Description of the Property Subject Address: 9331 Glendon Way (1 SFD unit on lot) Legal Description: Parcel 3 as shown on Parcel Map No. 5172, in the City of Rosemead, County of Los Angeles, State of California, as per map recorded in Book 57, Page 64 of Parcel Maps, in the office of the County Recorder of said County. City: Rosemead County: Los Angeles State: California Zip Code: 91770-2006 Census Tract: 4329.01 Map Reference: 59647 APN: 8594022042 LA 44853-2294-8866 vl 12 • • EXHIBIT 2 Certification of Tenant Eligibility NOTE TO APARTMENT OWNER: This form is designed to assist you in computing Annual Income in accordance with the method set forth in the United States Department of Housing and Urban Development ("HUD") Regulations (24 CFR 813 and 24 CFR 92.203). You should make certain that this form is at all times up-to-date with the HUD and HOME Regulations. Re: 9331 Glendon Way, Rosemead, CA 91770 I/We, the undersigned state that I/we have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment project. Listed below are the names of all persons who intend to reside in the unit: 1. 2. 3. 4. Names of Relationship Social Place of Members of to Head of Security Employment Household Household Number Income Computation 6. The total anticipated income, calculated in accordance with the provisions of this Section 6, of all persons listed above for the 12-month period beginning the date that I/we plan to move into a unit is $ Included in the total anticipated income listed above are: (a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets); (c) interest and dividends (including income from assets excluded below); LA #4853-2294-8866 v 1 13 • • 11 (d) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of period receipts, including any lump sum payment for the delayed start of a periodic payment; (e) payments in lieu of earnings, such as unemployment and disability compensation, workmen's compensation and severance pay; (f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (i) any earned income tax credit to the extent that it exceeds income tax liability. Excluded from such anticipated income are: (a) casual, sporadic or irregular gifts; (b) amounts which are specifically for or in reimbursement of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen's compensation), capital gains and settlement for personal or property losses; (d) amounts of educational scholarship paid directly to the student of the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, book and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes, are to be included in income; (e) special pay to a household member who is away from home and exposed 0 CO to hostile fire; (f) relocation payments under Title 11 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; (g) foster child care payments; (h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977; LA #4853-2294-8866 vl 14 • • (i) payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act. (k) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; (1) payments or allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program; (m) payments received from the Job Training Partnership Act; (n) income derived from the disposition of funds of the Grant Riber Band of Ottawa Indians; and (o) the first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Court of Claims. 7. Do the persons whose income or contributions are included in item 6 above: (a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? Yes _ No; or (b) have they disposed of any assets (other than at a foreclosure or bankruptcy sale) during the last two years at less than fair market value? _Yes No (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than $5,000? _Yes No (d) If the answer to (c) is yes, state: (i) the amount of income expected to be derived from such assets in the 12-month period beginning on the date of initial occupancy in the unit that you propose to rent: $ ; and (ii) the amount of such income, if any, that was included in item 6 above: $ 8. 0 g;q (a) Are all of the individuals who propose to reside in the unit full-time students*? Yes No *A full-time student is an individual enrolled as a full-time student during each of five calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional or farm training under the supervision of an LA #4853-2294-8866 vl 15 accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is at least one of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? _Yes No 9. Neither myself nor any other occupant of the unit I/we propose to rent is the owner of the rental housing project in which the unit is located (hereinafter the "Owner"), has any family relationship to the Owner or owns, directly or indirectly, any interest in the ownership. For purposes of this section, indirect ownership by an individual shall mean ownership by a family member, ownership by a corporation, partnership, estate or trust in proportion to the ownership or beneficial interest in such corporation, partnership, estate or trust held by the individual or a family member, and ownership, direct or indirect, by a partner of the individual. 10. This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, correct and complete and, based upon information I/we deem reliable and that the statement of total anticipated income contained in Section 6 is reasonable and based upon such investigation as the undersigned deemed necessary. 11. I/we will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding calendar year. 12. I/we acknowledge -that I/we have beeri -advised that the making of any misrepresentation or misstatement in this declaration will constitute a'material breach of my/our agreement with the Owner to lease the units and will entitle the Owner to prevent or terminate my/our occupancy of the unit by institution of an action for eviction or other appropriate proceedings. 13. Housing Issuer Statistical Information: Marital Status: Race (Head of Household) White Asian African-American Hispanic _ Native American Other Physical Disability: Yes No I/we declare under penalty of perjury that the foregoing is true and correct. LA 94853-2294-8866 0 16 Executed this day of , California. in the County of Los Angeles, Applicant Applicant [Signature of all persons over the age of 18 years listed in number 2 above required] LA 44853-2294-8866 v 1 17 ZI FOR COMPLETION BY HOMEOWNER ONLY: 1. Calculation of eligible income: (a) Enter amount entered for entire household in #6 of Certification of Tenant Eligibility form: $ (b) (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance (2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook savings subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance (3) Enter at right the greater of the amount calculated under (1) or (2) above: $ (c) TOTAL ELIGIBLE INCOME (Line 1(a) plus line I(b)(3): 2. The amount entered in l(c): Qualifies the applicant(s) as a [insert income category] Qualified Household Does not qualify the applicant(s) as Qualified Household. 3. This house [was/was not] last occupied for a period of one year by persons whose aggregate anticipated annual income, as certified in the above manner upon their initial occupancy of the apartment unit, qualified them as Moderate-Income Tenants. 4. Method used to verify applicant(s) income: Employer income verification. Copies of tax returns. Other Manager LA 94853-2294-8866 vl 18 10, FOR COMPLETION BY TENANT'S EMPLOYER: The undersigned employee has applied for a rental unit located in a project financed by The Rosemead Community Development Commission and the City'of Rosemead for persons of low- to moderate-income. Every income statement of a prospective tenant must be stringently, verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature hereby grant rental of an apartment at Signature Date Title you permission to disclose my income to _ in order that they may determine my income eligibility for Date Please send to: C) tai I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge. Signature LA 44853-2294-8866 vi Date 19 23 EXHIBIT 3 Certificate of Continuing Program Compliance For Annual Reporting Period Ending The undersigned, , as the authorized representative of , a California non-profit corporation ("RHCDC"), has read and is thoroughly familiar with the provisions of the various documents associated with the financial assistance provided by the Rosemead Community Development Commission ("CDC") and the City of Rosemead ("City") as established in numerous documents including the CC&Rs, dated as of , 2008 between the City of Rosemead, the CDC and RHCDC. - As of the date of this Certificate, the Project is (i) occupied by a Qualified Household (as such term is defined in the CC&Rs) or (ii) is currently vacant and being held available for such occupancy and have been so held continuously since the date a Qualified Household vacated such unit, as indicated by an "x" below: Occupied by Low-Income Households: Occupied by Moderate-Income Households: Property is vacant: Attached is the following information: the number of occupants of the Property, the rent paid, and the Certification of Tenant Eligibility for all new Qualified Households who have moved into the Project since the last Annual Certification. The information contained thereon is true and accurate and reasonable and is based on information submitted to the owner and is certified under penalty of perjury by each tenant. The undersigned hereby certifies that (1) a review of the activities of the RHCDC during such reporting period and of the RHCDC's performance under the CC&Rs has been made under the supervision of the undersigned; and (2) to the best of the knowledge of the undersigned, based on the review described in clause (1) hereof, the RIICDC is not in default under any of the terms and provisions of the above documents. Rio Hondo Community Development Corp. a California non-profit Corporation Date: LA #4853-2294-8866 v1 20 0 0 o • ~ . This page is part of your document - DO NOT DISCARD ~ ~ Pages: 20080944598 118 I Recorded/Filed in Official Records Fee: 0.00 Recorder's Office, Los Angeles County, California Tax: 0.00 Other: 0.00 05/29108 AT 08:OOAM Total: 0.00 + Title Company TITLE(S) : . I IIIIII,EIIYIIIIBI1111~P I I 1 I i I I ~ Assessor's Identification Number (AIN) . To be completed by Examiner OR Title Company in black ink. Number of AIN's Shown T - EMWn THIS FORM IS NOT TO BE DUPLICATED - RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO CITY OF ROSEMEAD 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Michelle Ramirez Exempt from Recording Fee per Government Code Section 27383 05128108 - - 111 IN IE1111111111111111111111111111111111111 20080944598 (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) 3oz339Z- CITY OF ROSEMEAD AND ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION HOME INVESTMENT PARTNERSHIP AND REDEVELOPMENT LOW AND MODERATE INCOME HOUSING FUNDS REGULATORY AGREEMENT THIS HOME INVESTMENT PARTNERSHIP AND REDEVELOPMENT LOW AND MODERATE INCOME HOUSING FUNDS REGULATORY AGREEMENT (the "REGULATORY AGREEMENT") is dated as of Apri122, 2008 by and among the CITY OF ROSEMEAD, a California municipal corporation (the "CITY"), the ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a California municipal corporation (the "CDC") and the RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, a California public benefit corporation (the "RHCDC"). CITY, CDC and RHCDC may be referred to collectively as "Parties" or individually as a "Party." RECITALS . A. WHEREAS, the CITY has received funds from the HOME Investment Partnership Act of the United States, 42 U.S.C. §12701, et seq., for the purpose of the production and operation of housing affordable to one (1) low- and moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) families; and C. WHEREAS, the CDC has funds in its Low and Moderate Housing Set Aside account which must be used for the purpose of the production and operation of housing affordable to low- and moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) families; and , B. WHEREAS, the CITY and CDC, in utilizing the aforementioned funds, has acquired a total of one property located in the City of Rosemead, County of Los Angeles, State of California commonly identified as follows: (a) 9331 Glendon Way, Rosemead, California 91770 The aforementioned property shall be collectively referred to as the "PROPERTY" and are more specifically described in the legal description attached and incorporated hereto as Exhibit "A." LA #4843-7018-6242 v1 I 3 C. WHEREAS, RHCDC is committed to working with the City of Rosemead's residents, community organizations, governmental agencies, and other stakeholders to provide and preserve high quality affordable housing, stabilize residential neighborhoods suffering from neglect, and promote economic opportunity and the restoration of economic vitality to areas of the community struggling with economic distress; and D. WHEREAS, the CITY and CDC have determined that the public interest shall be served by conveying the PROPERTY to RHCDC so that they may be more efficiently and expertly managed, operated and utilized as affordable residential rental property thereby furthering the public purpose of providing affordable housing for the CITY's low- and moderate-income (0 to 80% of the area median family income as defined under the HOME Investment Partnerships Regulations) families; and E. WHEREAS, the RHCDC desires to purchase the rental property; and. F. WHEREAS, the CITY has agreed to loan RHCDC funds in the amount of Two Hundred Fourteen Thousand Six Hundred and Fifteen Dollars ($214,615.00) and the CDC has agreed to loan RHCDC funds in the amount of Two Hundred Forty-Three Thousand Two Hundred Eighty-Four Dollars ($243,284.00) to assist in the purchase of one property for a total of $457,899.00 to be used as an affordable low- and moderate-income rental property (as defined under the HOME Investment Partnership Regulations) for a minimum of fifty-five (55) years; and G. WHEREAS, RHCDC has agreed to acquire and operate the PROPERTY subject to the terms of this REGULATORY AGREEMENT; and H. WHEREAS, the execution and recording of this REGULATORY AGREEMENT is a condition to the CITY and CDC financing of RHCDC's acquisition of the PROPERTY. NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND COVENANTS OF THE PARTIES CONTAINED HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES COVENANT AND AGREE AS FOLLOWS: 1. PURPOSE. The purposes of this REGULATORY AGREEMENT is to set forth those duties and responsibilities of the Parties with respect to the management, operation and maintenance of the PROPERTY. 2. DEFINITIONS. The following capitalized terms shall have the following meanings under this REGULATORY AGREEMENT, unless otherwise stated herein: (a) "DEED OF TRUST" means that deed of trust for the PROPERTY which serves as security for the NOTE. (b) "HOME Regulations" means those regulations relating to the federal HOME Investment Partnership Program authorized under Titles I and If of the National Affordable Housing Act of 1990 and all related amendments and successors statutes thereto. ""f (c) "HUD" means the Department of Housing and Urban Development of the United States of America. e LPI 's4 LA #4843-7018-6242 V1 2 0 y (d) "Low Household" means low-income families whose annual incomes do not exceed fifty percent (50%) of the area median income ("AMP') adjusted for family size for Los Angeles County as established and amended from time to time by HUD. (e) "Monthly Rent" means the total monthly payments for use and occupancy of the one (1) residential dwelling unit on the PROPERTY and land and facilities associated therewith; (2) any separately charged fees or service charges assessed by the RHCDC which are required of all tenants, other than security deposits; (3) a reasonable allowance for an adequate level of service of utilities, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone service; and (4) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than RHCDC. (f) "Moderate income" means households whose incomes are between 51 percent and 80 percent of the median income for the area, as determined by HUD, with adjustments for smaller or larger families. HUD may establish income ceilings higher or lower than 80 percent of the median for the area on the basis of HUD's findings that such variations are necessary because of prevailing levels of construction costs, fair market rents, or unusually high or low family incomes. (g) "NOTE" means that certain promissory note secured by the DEED OF TRUST and executed by RHCDC in favor of CITY and CDC in the amount of $457,899.00. (h) "Related Documents" means the NOTE, DEED OF TRUST, COVENANTS, CONDITIONS AND RESTRICTIONS, and PROMISSORY NOTE and LOAN AGREEMENT. (i) "Very-Low Income Households" means very-low income families whose annual incomes do not exceed thirty percent (30%) of the area median income ("AMI") adjusted for family size for Los Angeles County as established and amended from time to time by HUD. 3. DUTY TO PREVENT HAZARDOUS MATERIAL CONTAMINATION. During any rehabilitation, repair and/or operation of the PROPERTY, the RHCDC shall take all necessary precautions to prevent the release of any Hazardous Materials on, under or about the PROPERTY. Such precautions shall include compliance with all applicable federal, state, county and local governmental laws, ordinances, statutes, codes, rules, regulations, orders or decrees relating to Hazardous Materials. The RHCDC shall notify the CITY and provide to the CITY a copy or copies, of any 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 Requirements relating to Hazardous Materials and underground tanks. RHCDC shall report all incidents and releases to the CITY, as soon as possible after each incident or release and shall also report any unusual, potentially important in the event of an incident or release of any Hazardous Materials.. For the purposes of this Section 3, "Governmental Requirements" shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of t California, the County of Los Angeles, the City of Rosemead, Rosemead Community Development Commission or any other public entity or agency with regulatory jurisdiction over the territory where the PROPERTY are located. i d~ x ~ LA B4843-7018-6242 vI 3 0 0 For purposes of this Section 3, "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," "extremely hazardous waste," or "restricted hazardous waste" under Section 25115, 251 17 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act); (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls; (viii) methyl tertiary butyl ether; (ix) listed under Article 9 or defines as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Division 4, Chapter 20; (x) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. § 1317); (xi) 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 (xii) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§9601, et seq. RHCDC shall be required to submit Lead Based Paint and Asbestos Reports to the CITY and CDC regarding the PROPERTY. These reports are attached to the AGREEMENT as EXHIBIT E. In addition to complying with the duties and obligations of the Reports RHCDC will also comply with all Federal and state regulations as the apply to lead based paint and asbestos. 4. COMPLIANCE WITH LAWS. The RHCDC shall undertake the management„ operation, maintenance, repair and/or rehabilitation of the PROPERTY in conformity with all applicable federal, state, county and local laws, ordinances, statutes, codes, rules, regulations, orders and decrees, including but not limited to, California Community Redevelopment Law, all applicable state labor standards, local zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the Rosemead Municipal Code, 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., and the Unruh Civil Rights, Civil Code Section 51, et seq. 5. AFFORDABILITY. RHCDC agrees to make available, restrict occupancy to, and rent the PROPERTY to Low Income and Moderate Income Households, at an Affordable Rent. (hereinafter referred to as the "PROPERTY"). If, after a tenant-household's initial occupancy of an PROPERTY the tenant- household's income increases above levels that would qualify it as a Low to Moderate Income Household, the rent charged by RHCDC may be increased to the maximum rent set forth in Section 6 hereof. To preserve the affordability of the PROPERTY, RHCDC covenants and agrees that the PROPERTY shall remain affordable for a period of fifty-five (55) years following the date of recordation of this duly executed REGULATORY AGREEMENT. LA 94843-7018-6242 vl 4 (ep It is intended by the Parties to this REGULATORY AGREEMENT, that the rent affordability covenant of this Section shall run with the PROPERTY with the benefit of this covenant running to the CITY and CDC, in order to preserve the public interest in maintaining the affordability of the PROPERTY. The terms and conditions of this REGULATORY AGREEMENT (including but not limited to, the affordability restrictions on the PROPERTY) shall remain in full force and effect, without regard to the term of any mortgage, transfer ownership, payment or pre-payment of the indebtedness evidenced by the NOTE for a period that will end no sooner than fifty-five (55) years from the date this REGULATORY AGREEMENT is recorded; this 55-year period of affordability shall hereinafter be referred to as the "Affordability Period." 6. AFFORDABLE MONTHLY RENTS. The maximum Monthly Rent for the PROPERTY shall be annually determined by the CITY and CDC in accordance with the HOME Regulations and this REGULATORY AGREEMENT. The CITY shall transmit these annual rent and utility allowance determinations to the RHCDC each year after such Monthly Rents have been annually determined. As the PROPERTY shall be restricted to Low and Moderate Income Households, the maximum initial Monthly Rent, less tenant-paid utility allowances, shall conform to the rent limitations set forth in Section 92.252, subdivision (b) of Title 24 of the United States Code of Federal Regulations or its successor regulation. In the event a tenant-household's income increases above levels that qualify it as a Low Income Household, yet such income remains at or below levels that qualify it as a Moderate Income Household, the Monthly Rent charged by RHCDC may be increased to conform to the rent limitations set forth in Section 92.252, subdivision (a) of Title 24 of the United States Code of Federal Regulations or its successor regulation. In the event a tenant-household's income increases above levels that qualify it as a Moderate Income Household, the Monthly Rent shall be increased in the manner provided under Section 92.252, subdivision (i) of Title 24 of the United States Code of Federal Regulations or its successor regulation. 7. ANNUAL TENANT INCOME. The methodology for calculating a tenant-household's annual income shall be the methodology set forth in Section 5.609 of Title 24 of the United States Code of Federal Regulations - a methodology commonly, and hereinafter, referred to as the "Section 8 Program Methodology." In keeping with Section 92.203(d)(1) of Title 24 of the United States Code of Federal Regulations, RHCDC shall estimate and ascertain whether a tenant-household's annual income during its initial rental period qualifies it as a Low to Moderate Income Household. The amount of Monthly Rent required to be paid by a tenant-household whose income subsequently increases above levels that qualify it as a Low to Moderate Income Household shall be subject to the provisions of Section 6 (Affordable Monthly Rents), above. 8. INCOME CERTIFICATION. RHCDC shall be responsible for monitoring and keeping itself apprised of the income status of the tenants upon the PROPERTY. The RHCDC, prior to initial occupancy of the PROPERTY by a prospective tenant-household and annually thereafter on the anniversary of the aforementioned title transfer, shall diligently verify the tenant-household's income. Such verification shall be conducted in accordance with the Section 8 Program Methodology; HUD's Technical Guide for Determining Income and Allowances for the HOME Program, Second Edition or any subsequent editions thereto; and one or more of the following methods: a. The procurement from the tenant-household of documents such as paycheck stubs, tax returns, bank statements; or b. The procurement of a verified statement and certification from the tenant-household; or LA #4843-7018-6242 v 1 5 c. The procurement of a true and correct certified income verification documents prepared for another governmental program, the adequacy of which, meets with CITY and CDC approval. 9. LEASE REQUIREMENTS. Prior to the rental of the PROPERTY the RHCDC shall submit a standard lease form to the CITY and CDC for its approval. The CITY shall reasonably approve such lease form upon a finding that such lease form is consistent with this REGULATORY AGREEMENT and contains all of the provisions required pursuant to the HUD's HOME Investment Partnership Program and the HOME Regulations and the California Community Redevelopment Law. The RHCDC shall enter into a written lease, in the form approved by the CITY and CDC, for the PROPERTY. No lease shall contain any of the provisions, which are prohibited pursuant to Section 92.253 of Title 24 of the United States Code of Federal Regulations. Pursuant to Section 92.253 (Tenant and Participant Protections) of Title 24 of the United States Code of Regulations and its successor regulations, such leases may not contain any of the following provisions: (a) Agreement to be sued. Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of any owner of the property (including, RHCDC, its successors or assigns) in a lawsuit brought in connection with the lease; (b) Treatment of property. An agreement by the tenant that any owner of the property (including, RHCDC, its successors or assigns) may take, hold, or sell personal property of a tenant-household members without notice to the tenant and a court decision on the rights of the parties; (c) Excusing Owner from responsibility. An agreement by the tenant not to hold any owner of the property (including RHCDC, its successors or assigns) or their respective agents legally responsible for any action or failure to act, whether intentional or negligent; (d) Waiver of notice. An agreement of the tenant that any owner of the property (including RHCDC, its successors or assigns) may institute a lawsuit without notice to the tenant; (e) Waiver of legal proceedings. An agreement by the tenant that any owner of the property (including RHCDC, its successors or assigns) may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (f) Waiver of a jury trial. An agreement by the tenant to waive any right to a trial by jury; (g) Waiver of right to appeal court decision. An agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; (h) Tenant chargeable with cost of legal actions regardless of outcome. An agreement by the tenant to pay allomey's fees or other legal costs even if the tenant wins in a court proceeding by any owner of the property (including RHCDC, its successors or assigns) against the tenant; (i) Termination of tenancy. An agreement that any owner of the property (including RHCDC, its successors or assigns) may not terminate the tenancy or refuse to renew the lease of a tenant residing in rental housing assisted with HOME Program funds except for serious or repeated violation of the terms and conditions of the lease; for violation of applicable Federal, State, or local law; or for other good cause; LA #4843-7018-6242 vl g (j) Maintenance and replacement. An agreement that provides that any owner of the property (including RHCDC, its successors or assigns) need not maintain the premises in compliance with all applicable housing quality standards and local code requirements. Pursuant to Section 92.254 of the United States Code of Federal Regulations, the following exceptions and clarifications to the prohibitions set forth in paragraphs (a) through 0) of this Section 9 shall apply: The prohibition set forth in paragraph (b) of this Section 9, does not apply to an agreement by the tenant concerning the disposition of personal property remaining in the housing unit after the tenant has moved out of the unit; under such circumstances, the owner may dispose of such personal property in accordance with the laws of the State of California. 2. The prohibition set forth in paragraph (h) of this Section 9 notwithstanding, a tenant may be obligated to pay costs if the tenant loses. 3. In order to terminate or refuse to renew a tenancy, any owner of the property (including RHCDC, its successors and assigns) must serve written notice upon the tenant specifying the grounds for the action at least thirty (30) days before the termination of the tenancy. (D C~3 10. AFFIRMATIVE MARKETING. The rental of the PROPERTY shall be conducted in accordance with the affirmative marketing requirements adopted by the CITY and the requirements of Section 92.351 of Title 24 of the United States Code of Federal Regulations, or its successor regulation, and other applicable HOME Investment Partnership Program requirements. 11. SELECTION OF TENANTS. The PROPERTY shall be leased to a tenant-household selected by the RHCDC who meet all of the requirements provided herein. The RHCDC shall adopt a tenant selection system in conformity with Section 92.253(d) of the United States Code of Federal Regulations or its successor regulations, which establishes a chronological waiting list system and/or random lottery system for selection of tenants and which shall be approved by the CITY and CDC, in it's reasonable discretion. RHCDC shall not refuse to lease to a holder of a certificate of family participation under 24 CFR part 882 (Rental Certificate Program) or a rental voucher under 24 CFR part 887 (Rental Voucher Program) or to the holder of a comparable document evidencing participation in HUD's HOME Investment Partnership Program; the Section 8 program or other tenant-based assistance programs, who is otherwise qualified to be a tenant in accordance with the approved tenant selection criteria. 12. OCCUPANCY STANDARDS. The PROPERTY is a three-bedroom residential home and shall be limited to six-persons. 13. MAINTENANCE. RHCDC shall, at all times relevant, maintain the interior and exterior of the PROPERTY in a neat, clean, sanitary and orderly condition, that complies with the maintenance standards set forth in this REGULATORY AGREEMENT and the Related Documents and that are no less stringent than HUD Housing Quality Standards; maintenance standards required by Section 92.251 of Title 24 of the United States Code of Federal Regulations, or the standard of maintenance for similar residential unit within the County of Los Angeles, State of California, whichever standard is the more stringent. If at any time RHCDC fails to maintain the PROPERTY in accordance with the maintenance standards set forth in this REGULATORY AGREEMENT or in the Related Documents, CITY or CDC shall issue notice specifying the nature of such maintenance deficiency to RHCDC. With respect to maintenance deficiencies relating to the general maintenance and up-keep of the PROPERTY or the presence of graffiti, debris or waste material, RHCDC shall cure all such LA 44843-7018-6242 vl deficiencies within seventy-two (72) hours from the date of CITY or CDC issuance of its notice of such deficiencies. With respect to all other maintenance deficiencies (including but not limited to landscaping, landscape up-keep or structural improvements), RHCDC shall cure all such deficiencies within thirty (30) calendar days from the date of CITY or CDC issuance of its notice of such deficiencies. In the event RHCDC fails to cure any noticed maintenance deficiency within the applicable time period required, then the CITY and/or CDC in addition to whatever remedy it may have at law or in equity, shall have the right to enter upon the PROPERTY and perform all acts and work necessary to protect, maintain, and preserve the PROPERTY and landscaped areas on the PROPERTY, and to attach a lien upon the PROPERTY, or to assess the PROPERTY, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the CITY and CDC and/or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by RHCDC to the CITY and CDC, as appropriate, upon demand. Graffiti which is visible from any public right-of-way which is adjacent to, or contiguous with, the PROPERTY shall be removed by the RHCDC from any exterior surface of a structure or improvement on the PROPERTY by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that graffiti is placed on the PROPERTY and such graffiti is visible from an adjacent or contiguous public right-of-way and thereafter such graffiti is not removed within 72 hours following the time of its application; then in such event and without notice to the RHCDC, the CITY and CDC shall have the right to enter the PROPERTY and remove the graffiti. Notwithstanding any provision of this AGREEMENT to the contrary, any sum expended by the CITY for the removal of graffiti from the PROPERTY as authorized by this Section 10(b) shall become a lien on the PROPERTY. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the CITY to the RHCDC, the CITY shall have the right to enforce its lien in the manner as provided in Section 7(c). The Parties hereto further mutually understand and agree that the rights conferred upon the CITY under this section expressly include the power to establish and enforce a lien or other encumbrance against the PROPERTY, or any portion thereof, in the manner provided under Civil Code Sections 2924 et al. in the amount reasonably necessary to restore the PROPERTY to the maintenance standard forth herein or in the Related Documents, including reasonable attorneys fees and costs of the CITY associated with the abatement of the Maintenance Deficiency or removal of graffiti and the collection of the costs of the CITY in connection with such action. The provisions of this section shall be a covenant running with the land for the duration of the Affordability Period and shall be enforceable by the CITY, and its successors and assigns. Nothing in the foregoing provisions of this section shall be deemed to preclude the RHCDC from making any alterations, additions, or other changes to any structure or improvement or landscaping on the PROPERTY, provided that such changes comply with this REGULATORY AGREEMENT and other applicable law. No lien as may arise under this Section shall interfere with or be superior to the security interest of any mortgage secured by the PROPERTY. 14. MANAGEMENT PLAN. RHCDC shall submit for the approval of the CITY and CDC a "Management Plan" which sets forth in detail the RHCDC's property management duties, the affirmative marketing procedures in accordance with Section 10 (Affirmative Marketing) hereof, the tenant selection process in accordance with Section I1 (Selection of Tenants) hereof, a security system and crime prevention program, the procedures for the collection' of rent, the procedures for eviction of tenants, the t? rules and regulations of the PROPERTY and manner of enforcement, a standard lease form in accordance with Section 9 (Lease Requirements) hereof, the identity of the manager of the PROPERTY (the C "Management Agent"), and other matters relevant to the management of the PROPERTY. The 4di Management Plan shall require the RHCDC to adhere to a fair lease and grievance procedure and provide U9 1 0 LA #4843-7018-6242 v I 8 a plan for tenant participation in management decisions. The management of the PROPERTY shall be in compliance with the Management Plan that is approved by the CITY and CDC. If CITY and CDC, in its sole discretion, determines that the performance of the Management Agent is deficient based upon the standards set forth in the Management Plan, this REGULATORY AGREEMENT or the Related Documents, then CITY and CDC shall provide notice to the RHCDC to compel a meeting within fifteen (15) days of such notice wherein the Parties shall in good faith consider methods for improving the operation, management and/or maintenance of the PROPERTY. In the event that RHCDC or the Management Agent fail to correct its management, operation or maintenance practices to conform to the standards of this REGULATORY AGREEMENT and the Related Documents, the CITY and CDC shall have the right to require the RHCDC to immediately remove and replace the Management Agent with another Management Agent or Agency reasonably acceptable to the CITY and CDC and not related to or affiliated with the RHCDC, and possessing no less than five (5) years experience in the property management field, including significant experience managing multiple affordable residential dwelling unit properties of the size and nature involved herein. 15. RESERVE ACCOUNTS. Annually, RHCDC shall set aside no less than One Thousand Five Hundred Dollars ($1,500.00) per year, into a separate interest-bearing trust account (the "Capital Replacement Reserve"). Funds in the Capital Replacement Reserve shall be used for capital replacements to the PROPERTY fixtures and equipment that are normally capitalized under generally accepted accounting principles. The non-availability of funds in the Capital Replacement Reserve does not in any manner relieve the RHCDC of the obligation to undertake necessary capital repairs and improvements and to continue to maintain the Project in the manner prescribed herein. Not less than once per year, RHCDC, at its expense, shall submit to the CITY and CDC an accounting for the Capital Replacement Reserve. Capital repairs to, and replacement of, the PROPERTY' fixtures shall include only those items with a long useful life, including without limitation the following: carpet and drape replacement; appliance replacement; exterior painting, including exterior trim; hot water heater replacement; plumbing fixtures replacement, including tubs and showers, toilets, lavatories, sinks, faucets; air conditioning and heating replacement; asphalt repair and replacement, and seal coating; roofing repair and replacement; landscape tree replacement and irrigation pipe and controls replacement; gas line pipe replacement; lighting fixture replacement; elevator replacement and upgraded work; miscellaneous motors and blowers; common area furniture replacement, and common area repainting. 16. MONITORING & RECORD KEEPING. Throughout the Affordability Period, RHCDC shall comply with all applicable record keeping and monitoring requirements set forth in Section 92.508 of Title 24 of the United States Code of Federal Regulations (or successor regulation) and shall annually complete and submit to CITY and CDC a Certification of Continuing Program Compliance in the form provided by the CITY and CDC. 17. RECORD RETENTION & ACCESS TO RECORDS. Records shall be retained as follows: (a) The Parties shall each retain this REGULATORY AGREEMENT and the Related Documents for a period of sixty (60) years from the date this duly executed REGULATORY AGREEMENT is recorded. 0 t~7 C~ hlI 6t1 p1Y (b) RHCDC shall retain all documentation relating to tenant income, rent and unit inspection information for a period of sixty (60) years from the date this duly executed REGULATORY AGREEMENT is recorded. LA #4843-7018-6242 vI 9 • • II (c) RHCDC shall retain records related to property acquisition and any related displacements for a period of five (5) years from the date all persons displaced from the property and all persons whose property is acquired for the project have received the final payment to which they are entitled in accordance with 92.353 of Title 24 of the United States Code of Federal Regulations. (d) The Parties shall retain all other records for a period of not less than five (5) years. If any litigation, claim, negotiation audit, monitoring inspection or other action has started before the expiration of the required record retention period, records shall be retained until completion of that matter and all issues arising therefrom, or until the end of the required period, whichever is later. The City of Rosemead, the Rosemead Community Development Commission, the United States Department of Housing and Urban Development and the Controller General of the United States, and their respective agents, officers or employees shall have the right of access to any and all pertinent books, documents, papers or other records to conduct audits, examinations or to make excerpts and transcripts. Representatives of the CITY and CDC shall further have the right (a) to enter onto the PROPERTY, upon at least twenty-four (24) hours notice to RHCDC to monitor compliance with this REGULATORY AGREEMENT and the Related Documents; (b) to inspect the records of the PROPERTY; and (c) to conduct an independent audit or inspection of such records. RHCDC agrees to cooperate with the CITY and CDC and in making the PROPERTY available for such inspection or audit. If for any reason CITY and CDC is unable to obtain the RHCDC's consent to such an inspection or audit, RHCDC understands and agrees that the CITY and CDC may obtain at RHCDC's expense an administrative inspection warrant or other appropriate legal order to obtain access to records and/or the PROPERTY themselves. 18. NON-DISCRIMINATION COVENANTS. A. RHCDC covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the PROPERTY or there residential dwelling unit located therein, nor shall RHCDC itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees on the PROPERTY. RHCDC shall also comply with the equal opportunity and fair housing requirements set forth in Section 92.350 of Title 24 of the United States Code of Federal Regulations. B. RHCDC covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, national origin, sex, marital status, handicap, religion or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the RHCDC itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, leases, subtenants, sublessees, or vendees of the Property. C. The RHCDC shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, ancestry, national origin, sex, marital status, handicap, or religion of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following d5 nondiscrimination or nonsegregation clauses: 4:a ulI GU sw' LA #4943-7018-6242 v1 10 • • 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 race, color, creed, national origin, sex, religion, marital status, handicap, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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, subtenants, sublessees or vendees in the land herein conveyed. 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 race, color, creed, national origin, sex, marital status, handicap, religion, or ancestry, 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." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, national origin, sex, religion, marital status, handicap, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee 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, subtenants, sublessees or vendees of the premises." D. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Property or any part thereof. The covenants contained in this section shall remain in perpetuity. 19. Indemnity and Insurance A. RHCDC shall defend, indemnify, assume all responsibility for and hold the CDC and the CITY, and their respective elected and appointed officers and employees, harmless from all costs (including attorneys' fees and costs), claims, demands orjudgments for injury or damage to property and injuries to persons, including death, which may be caused by any of RHCDC's activities under this Agreement, whether such activities or performance thereof be by the RHCDC or anyone directly or indirectly employed or contracted with by the RHCDC and whether such damage shall accrue or be discovered before or after termination of this Agreement. C) B. Not in derogation of the indemnity provisions of this Section, the RHCDC shall take out 6~0 and maintain during the life of this Agreement, as follows: 1. Not in derogation of the indemnity provisions of this Section, the RHCDC Gl shall take out and maintain during the life of this Agreement a comprehensive liability policy in the amount of at least One Million Dollars ($1,000,000) for any person, One lh L-D LA 94843-7018-6242 v1 1 1 • 3 Million Dollars ($1,000,000) for any occurrence, and One Million Dollars ($1,000,000) property damage naming the CITY and CDC as additional insureds. RHCDC shall also insure the Property (fire, etc.) for the full acquisition amount. 2.. A policy of workers' compensation insurance in such amount as will fully comply with the California laws and which shall indemnify, insure and provide legal defense for the RHCDC against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the RHCDC in the course of carrying out the activities in the CC&Rs. 3. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person and ONE MILLION DOLLARS ($1,000,000.00) per occurrence and (ii) property damage liability limits of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) per occurrence and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) in the aggregate. Said policy shall include coverage for owned, non-owned, leased and hired vehicles. tJ Cis C. All policies of insurance shall be primary insurance and shall name the CITY and the CDC, and their officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the CITY and/or the CDC and their officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) calendar days prior written notice by registered mail to the CITY and CDC. In the event any of said policies of insurance are canceled, the RHCDC shall, prior to the cancellation date, submit new evidence of insurance in conformance with Section 4.3 to the CITY Manager/CDC Executive Director. No operation of the Project shall commence until the RHCDC has provided the CITY and CDC with certificates of insurance or appropriate insurance binders evidencing the above insurance coverage, and said certificates of insurance or binders are approved by the CITY and CDC. 20. DEFAULTS & REMEDIES. Defaults (i.e. "Events of Default") under this REGULATORY AGREEMENT and remedies therefore shall be governed by the default provisions of the DEED OF TRUST. 21. WAIVER OF TERMS & CONDITIONS. Either Party may, in its sole discretion, agree to waive any duty or obligation owed to it by the other Party under this REGULATORY AGREEMENT, provided such waiver is (a) in writing; and (h) permitted under the HOME Investment Partnership Program or under regulations set forth by HUD. Any waiver that does not satisfy the foregoing conditions shall be invalid Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, tern, or condition. 22. NON-LIABILITY OF CITY OFFICIALS & EMPLOYEES. No member, official, employee or. agent of the CITY or CDC shall be personally liable to the RHCDC, 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 RHCDC or its successors, or on any obligations under the terms of this REGULATORY AGREEMENT. 23. TIME. Time is of the essence under this REGULATORY AGREEMENT. The Parties acknowledge and agree that the time period and set forth herein are to be strictly adhered to, unless otherwise provided under this REGULATORY AGREEMENT or unless strict compliance with such deadlines is properly waived. LA #4843-7018-6242 v 1 12 • y 24. NOTICES. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this REGULATORY AGREEMENT must be in writing and may be given either by (i) personal service; (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below, or at any other address that party may later designate by Notice: CITY/CDC: City of Rosemead Development Services Department 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Oliver Chi, City Manager c/o Michelle Ramirez, Economic Dev. Administrator RHCDC: Rio Hondo Community Development Corporation 1104 Valley Boulevard, Suite 201 El Monte, California 91731 Attention: Donna Duncan, President Notice shall be deemed given on the date of personal delivery, the five (5) from the date deposited with the United States Postal Service if by regular mail; or the date upon which notice is received if by certified mail or reputable document delivery service such as Federal Express. Such addresses may be changed by notice to the other party given in the same manner as provided above. 25. EFFECTIVE DATE; AGREEMENT TERM; SUCCESSORS & ASSIGNS. This REGULATORY AGREEMENT shall become effective upon the date it is signed and duly executed by all of the Parties. The REGULATORY AGREEMENT and all terms, conditions and restrictions contained herein shall continue in full force and effect for a period that shall end fifty-five (55) years from the date this duly executed REGULATORY AGREEMENT is recorded, whichever is recorded later; this period shall hereinafter be referred to as the "Contract Term." This REGULATORY AGREEMENT and all covenants, terms, conditions and restrictions contained herein shall run with the land, and shall be binding upon the RHCDC, the CITY, their respective successors and assigns, and any subsequent owner of the PROPERTY for the duration of the Contract Term. Whenever the term "RHCDC," or "CITY"or "CDC" is used in this REGULATORY AGREEMENT, such term shall include any other successors and assigns as herein provided. 26. NO THIRD PARTY BENEFIT. This REGULATORY AGREEMENT is made and entered into for the sole protection and benefit of the CITY and CDC, and RHCDC, and no other person or persons shall have any right of action hereon. 27. PARTIAL INVAILIDITY. If any provision of this REGULATORY AGREEMENT shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. 28. GOVERNING LAW. This REGULATORY AGREEMENT and the Related Documents shall be construed in accordance with and be governed by the laws of the State of California, except to the extent any of its provisions are exclusively governed by federal law. Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. LA 44843-7018-6242 vi 13 29. CORPORATE AUTHORITY. The persons executing this REGULATORYAGREEMENT on behalf of the Parties hereto warrant that they are duly authorized to execute this REGULATORY AGREEMENT on behalf of said Parties and that by doing so, the Parties hereto are formally bound to the provisions of this REGULATORY AGREEMENT. 30. ENTIRE AGREEMENT. This REGULATORY AGREEMENT and the Related Documents constitute the entire, complete, final and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, or entered into by the Parties prior to the execution of the REGULATORY AGREEMENT and the Related Documents. No statements, representations or other agreements, whether oral or written, made by any Party which are not embodied herein shall be valid or binding. No amendment to, or modification of, this REGULATORY AGREEMENT or the Related Documents shall be valid or binding unless in writing and duly signed and executed by each of the Parties. 31. AMENDMENT. This REGULATORY AGREEMENT may not be modified or amended orally. Any contemplated modification or amendment shall be made by mutual written agreement of the Parties. 32. RESOLVING INCONSISTANCY WITH RELATED DOCUMENTS. In the event of inconsistency between this REGULATORY AGREEMENT and any of the Related Documents, this REGULATORY AGREEMENT shall control. Signatures on Following Page iLA 44843-7018-6242 v1 14 • • I ~P IN WITNESS WHEREOF, the parties hereto have executed this REGULATORY AGREEMENT as of the 22nd Day of April 2008. CITY OF ROSEMEAD, a municipal corporation By: A R- Joh n, Mayor Oliver Chi City Manager Date: S122.10$ X*9*Wy1MIX XXXXXxxxxxxXXXXXXXXXXXX Mj Xx xxxxxxxXXXX ~ M7 M ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION, a municipal corporation By: 1 Joh r n, Chairman Date: 21, O By: G1k--jC., Oliver Chi, Executive Director Date: 5 /22 /o& APPR D AS TOF By. Joe Monte p, Co mission Legal Cou self I o?~ Date: RIO HONDO COMMUNITY DEVELOPMENT CORPORATION, a California public benefit corporation By: &1~ ~ & M-- D nno Du can, President Date: 1"al By: LA #4843-7018-6242 vl 15 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA } } S.S. COUNTY OF Los Angeles } On May 21, 2008 before me, Maria Raygoza, Notary Public, personally appeared Donna L. Duncan, President, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person 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. MARIA RAYGOZA COMM. #1501679 > WITNESS my hand and official seal. NOTARY PUBLIC - CALIFORNIA LOS ANGELES COUNTY 1 Qy Comm. Expires JUL. 19, 2008 Signature Ma)-tL This area for official notarial seal TO ONLY BE ATTACHED TO REGULATORY AGREEMENT DATED APRIL 22, 2008 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Subject Address: 9331 Glendon Way (I SFD unit on lot) Legal Description: Parcel 3 as shown on Parcel Map No. 5172, in the City of Rosemead, County of Los Angeles, State of California, as per map recorded in Book 57, Page 64 of Parcel Maps, in the office of the County Recorder of said County. City: Rosemead County: Los Angeles State: California Zip Code: 91770-2006 Census Tract: 4329.01 Map Reference: 59647 APN: 8594022042 LA 44843-7018-6242 vl 16 EXHIBIT B PROPERTY PARCEL MAP co Cfl (D 14~~- c~ `A FP N N N9 WW To 9 -HART AVE` a' 3 Q's 3 _ "Y _is_. I ~ e ^ ~ m a awl-N r >et A O Z 1 O :9~ t~ 1t O -v O IC O mz ~m.w -i; L ~ x I - ~ - I R M' _ n :75 7I -i t--i_ - $ - _ JGI _ ZN - V - i.n n. e.o ~ 1 ,'M 8 21 0114 -IIS ~ r D (ly. Wd 4 [h- w' q~Y LA #4843-7018-6242 vl tl A alu IN y ID 114 -115 Na d= 12~ 0o i :,t nr r nn p0 D 1/ EXHIBIT C DEED OF TRUST ,~w5 Q? LA 44843-7018-6242 v1 18 • RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF ROSEMEAD 8838 E. Valley Boulevard Rosemead, California 91770 Attention: Michelle Ramirez Exempt from Recording Fee per Government Code Section 27383 • 21 (SPACE ABOVE THIS LINE RESERVED FOR RECODER'S USE) DEED OF.TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT (RIO HONDO CDC: RENTAL HOUSING PROPERTY) THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, FIXTURE FILING AND SECURITY AGREEMENT ("Deed of Trust") is made as of April 22, 2008, by the Rio Hondo Community Development Corporation, a California public benefit corporation (hereinafter referred to as "Trustor"), whose address is 11401 Valley Boulevard, Suite 201, El Monte, California 91731, to United Title Company, whose address is 500 North Brand Boulevard, Suite 1150, Glendale, California 91203 (hereinafter referred to as "Trustee"), for the benefit of the City of Rosemead ("City") and the Rosemead Community Development Commission ("CDC"), a municipal corporation, its successors and assigns (herein called "Beneficiaries"), whose address is 8838 E. Valley Boulevard, Rosemead, California 91770. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, and for the purpose of securing, in such priority as Beneficiaries may elect, each of the following: 1. The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in that certain Promissory Note of even date herewith in the principal amount not to exceed Four Hundred Fifty-Seven Thousand Eight Hundred Ninety-Nine Dollars ($457,899), together with interest thereon specified therein, executed by Trustor, as maker, to the order of Beneficiaries and any and all modifications, extensions or renewals thereof, whether hereafter evidenced by the Promissory Note or otherwise; and 2. The payment of all other sums, with interest thereon at the rate of interest provided for herein or in the Promissory Note, becoming due or payable under the provisions of this Deed of Trust, the Loan Agreement dated as of April 22, 2008, by and between Truster and the Beneficiaries or any other instrument or instruments heretofore or hereafter executed by Trustor having reference to or arising out of or securing the indebtedness represented by the Promissory Note; and 3. The payment of such additional sums and interest thereof which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiaries, whether or not evidenced by a ` promissory note or notes which are secured by this Deed of Trust; and r` t tt t)4 0 1 • • 4. The due, prompt and complete observance, performance and discharge of each and every obligation, covenant and agreement of Truster contained in the Loan Agreement, the Promissory Note, this Deed of Trust or any other Loan Document. TRUSTOR DOES HEREBY irrevocably grant, transfer, bargain, sell, convey and assign to Trustee, in trust, with power of sale and right of entry and possession, and does grant to Beneficiaries a security interest for the benefit and security of Beneficiaries under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Property" whether now owned or held or hereafter acquired and wherever located, including any and all substitutions, replacements and additions to same: (a) That certain real property located in Los Angeles County, State of California, and more particularly described in Exhibit "A", attached hereto and incorporated herein by this reference, together with all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including specifically but not limited to all appurtenant water, water rights and water shares or stock of Trustor, any and all general intangibles relating to the use and/or development of the real property, including development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, surveys and/or soil and substrata studies, and all other rights, privileges and appurtenances related to the said real property and all of the estate, right, title, interest, claim and demand whatsoever of Trustor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired; (b) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the real property described in Exhibit "A" (hereinafter referred to as the "Improvements"), including all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of said structures, buildings, improvements on the real property described in Exhibit "A" or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the real property described in Exhibit "A" as between the parties hereto and all persons claiming by, through or under such parties except that same shall not include such machinery and equipment of Trustor, its contractors or subcontractors, or any tenant of any portion of the real property described in Exhibit "A" or Improvements, which is part of and/or used in the conduct of the normal business of Truster or its tenant conducted upon the real property described in Exhibit "A„ (c) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof, other than personal property which is or riN at any time has become toxic waste, waste products or hazardous substances, including without (k limitation all installations, shelving, partitions, door-tops, vaults, awnings, window shades, venetian l~ blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, j drapery rods and brackets, screens, water heaters, wall coverings, carpeting, linoleum, tile, other • floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of 1J property, the specific enumerations herein not excluding the general, now or at any time hereafter r w= 2 22 • . 0 placed upon or used in any way in connection with the ownership, operation or maintenance of the real property described in Exhibit "A" or the Improvements or any portion thereof and owned by Trustor or in which Trustor now has or hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the real property described in Exhibit "A" and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, real property described in Exhibit "A" shall not include (i) personal property which may be owned by lessees or other occupants of the real property described in Exhibit "A"; (ii) inventory of any lessee or occupant of the real property described in Exhibit "A" used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the real property described in Exhibit "A" only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or proper maintenance, of the real property described in Exhibit "A"; (d) All right, title and interest of Trustor, now owned or hereafter acquired in and to and lying within the right-of-way of any street, road, alley or public place, opened or proposed,.vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the real property described in Exhibit "A" or now or hereafter used in connection with or now or hereafter belonging or appertaining to the real property described in Exhibit "A"; and all right, title and interest in the Trustor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the real property described in Exhibit "A"; (e) . All judgments, awards of damages, settlements and any and all proceeds derived from such hereafter made as a result of or in lieu of any taking of the real property described in Exhibit "A" or any part thereof, interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the real property described in Exhibit "A" or the Improvements thereon, including change of grade of streets, curb cuts or other rights of access for any public or quasi-public use or purpose under any law; (f) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the real property described in Exhibit "A", or arising from any lease or similar agreement pertaining thereto and all right, title and interest of Trustor in and to all leases of the real property described in Exhibit "A" now or hereafter entered into and all right, title and interest of Trustor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Trustee or Beneficiaries may demand, sue for and recover such payments but shall not be required to do so; and 3 z (g) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims. • • Trustor makes the foregoing grant to Trustee for the purposes herein set forth; provided, however, that if the Trustor shall pay or cause to be paid to the holder of the Promissory Note all amounts required to be paid under the provisions of the Promissory Note, this Deed of Trust or any other Loan Documents, and at the time and in the manner stipulated therein, and shall further pay or cause to be paid all other sums payable hereunder and all indebtedness hereby secured, then, in such case, the estate, right, title and interest of the Trustee and Beneficiaries in the Property shall cease, determine and become void, and upon proof being given to the satisfaction of the Beneficiaries that all amounts due to be paid under the Promissory Note have been paid or satisfied, and upon payment of all fees, costs, charges, expenses and liabilities chargeable or incurred or to be incurred by Trustee or Beneficiaries, and of any other sums as herein provided, the Trustee shall, upon receipt of the written request of the Beneficiaries, cancel, reconvey and discharge this Deed of Trust. TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE TRUSTEE ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. To protect the security of this Deed of Trust, Trustor agrees: 1. Trustor's Covenant of Payment. Trustor shall perform all of its obligations under the Loan Agreement, the Promissory Note and this Deed of Trust when due, without excuse or delay of any kind whatsoever, except as expressly provided herein or therein, and Trustor shall pay the Loan and all other debts and monies secured by this Deed of Trust when due, without set off or deduction of any kind. 2. Trustor's Warranties of Title. Trustor warrants to Beneficiaries that they are the sole holder of fee simple absolute title to all of the Property and that said title is marketable and free from any lien or encumbrance, except as otherwise provided in this section, or approved in writing by Beneficiaries, and the liens imposed by law for nondelinquent real property taxes and assessments. Trustor further covenants and agrees as follows: that Trustor will keep the Property free from all liens of any kind, including, without limitation, statutory and governmental; that no lien superior or junior to this Deed of Trust will be created or suffered to be created by Trustor during the life of this Deed of Trust without Beneficiaries' prior written consent; that Trustor has good right to make this Deed of Trust and the person or persons executing this Deed of Trust on behalf of Trustor has or have the authority to do so; and that Trustor will forever warrant and defend Beneficiaries' interest in the Property against every person, whomsoever, claiming any right or interest in the Property or any part thereof. 3. Trustor's Right to Contest Statutory Liens. As used herein the words "mechanic's lien" and "materialman's lien" mean and include a stop notice as this term is defined in California Civil Code Section 3179, et seq. The filing of a mechanic's or materialman's lien against the Property or a stop notice against the Trustor or the Beneficiaries and/or funds held by or owed to the Trustor for the improvement of the Property shall not constitute a default hereunder, if and so long as (a) no defaults exist under the Loan Agreement, this Deed of Trustor the Promissory Note; (b) within fifteen (15) days after filing of such lien, Trustor obtains and maintains in effect a bond issued by a California admitted surety acceptable to Beneficiaries, in an amount not less than the entire sum alleged to be owed to the lien claimant or such other amount as is required to obtain a ?/Y • • court order to release said lien of record; (c) Trustor provides to Beneficiaries and pays for an endorsement to Beneficiaries' title insurance policy, in a form satisfactory to Beneficiaries, which insures the priority of this Deed of Trust over the lien being contested; (d) Trustor immediately commences its contest of such lien and continuously pursues the same in good faith and with due diligence; (e) such bond or contest stays the foreclosure of the lien; and (f) Trustor pays in full any judgment rendered for the lien claimant within ten (10) days following entry of any such judgment. 4. [RESERVED - NO TEXT]. 5. Maintenance and Inspection of Improvements. Trustor shall maintain the buildings and other improvements now or hereafter located on the Property in a good and reasonable condition and state of repair. Trustor shall not commit or suffer any waste; shall promptly comply with all requirements of federal, state and municipal authorities and all other laws, ordinances, regulations, covenants, conditions and restrictions respecting the Property or the use thereof; and shall pay all fees or charges of any kind in connection therewith. 6. Construction and Repairs. Trustor shall complete or restore promptly and in a good and workmanlike manner any building or improvement that may be constructed, damaged or destroyed on the Property, and pay when due all costs incurred therefor. 7. Alterations. No building or other improvement on the Property shall be structurally altered, removed or demolished without the Beneficiaries' prior written consent, nor shall any fixture or chattel covered by this Deed of Trust and adapted to the proper use and enjoyment of the Property be removed at any time without Beneficiaries' prior written consent, unless actually replaced by an article of equal suitability and value, owned by the Trustor, free and clear of any lien or security interest, except such as may be approved in writing by the Beneficiaries. 8. Compliance With Laws. Trustor shall comply with all statutes, laws, ordinances and regulations which now or hereafter pertain to the construction, repair, condition, use and occupancy of the Property, including, without limitation, all environmental, subdivision, zoning, building code, fire, occupational, health, safety, occupancy and other similar or dissimilar statutes, and shall not permit any tenant or other occupant to violate the same. If any statute or order of any court of competent jurisdiction requires any correction, alteration or retrofitting of any improvements on or related to the Property, Trustor shall promptly undertake the required repairs and restoration and complete the same with due diligence at its sole cost and expense. 9. Environmental Covenants. Representations. Warranties and Indemnity. (a) Trustor will not use any Hazardous Materials (as defined herein below) in the construction of any improvements on or about the Property. (b) Trustor shall, at its sole expense, comply and cause each tenant leasing space within the Property to comply with all applicable laws, regulations, codes and ordinances relating to any Hazardous Materials or to any Environmental Activities (as defined herein below), including, without limitation, obtaining, filing, serving or posting all applicable notices, permits, licenses and similar authorizations. Trustor shall establish and maintain a management and operating policy for 2 5 • • the Property to assure and monitor continued compliance by Trustor and each tenant leasing space in the Property with all such laws, regulations, codes and ordinances. (c) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, certifying that the Property is not now being used nor has it ever been used for any Environmental Activities. Beneficiaries reserve the right, in their reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Trustor and/or to conduct its own investigation of the Property for Hazardous Materials. Trustor hereby grants to Beneficiaries, their agents, employees, consultants and contractors the right to enter upon the Property to perform such tests as are reasonably necessary to conduct such a review and/or investigation. (d) Upon the discovery by Trustor of any event or situation which would render any of the representations or warranties contained in subparagraph 9(g) hereof inaccurate in any respect, if made at the time of such discovery, Trustor shall promptly notify Beneficiaries of such event or situation and, within thirty (30) days after such discovery, submit to Beneficiaries a preliminary written environmental plan setting forth a general description of such event or situation and the action that Trustor proposes to take with respect thereto. Within sixty (60) days after such discovery, Trustor shall submit to Beneficiaries a final written environmental report, setting forth a detailed description of such event or situation and the action that Trustor proposes to take with respect thereto, including, without limitation, any proposed corrective work, the estimated cost and time of completion, the name of the contractor and a copy of the construction contract, if any, and such additional data, instruments, documents, agreements or other materials or information as Beneficiaries may reasonably request. The plan shall be subject to Beneficiaries' written approval, which approval may be granted or withheld in Beneficiaries' sole but reasonable discretion. Beneficiaries shall notify Trustor in writing of its approval or disapproval of the final plan within fifteen (15) days after receipt thereof by Beneficiaries. If Beneficiaries disapprove the plan, Beneficiaries' notice to Trustor of such disapproval shall include a brief explanation of the reasons therefor. Trustor shall submit to Beneficiaries a revised final written environmental plan that remedies the defects identified by Beneficiaries as reasons for Beneficiaries' disapproval of the previous plan. If Trustor fails to submit a revised plan to Beneficiaries within said thirty (30) day period, or if such revised plan is submitted to Beneficiaries and Beneficiaries disapproves said plan, such failure or disapproval shall, at Beneficiaries' option and upon notice to Trustor, constitute an "Event of Default" hereunder. If Beneficiaries do not notify Trustor of its approval or disapproval of the final plan or any revisions thereof within the fifteen (15) day period described above, Trustor shall provide written notice to Beneficiaries of Beneficiaries' failure to respond, at which time Beneficiaries shall have an additional forty-five (45) days after receipt of such notice from Trustor to notify Trustor of their approval or disapproval of the final plan within said additional forty-five (45) day period. If Beneficiaries fail to notify Trustor of their disapproval or approval of said plan within said forty-five (45) day period the plan shall be deemed approved. Once any such plan is approved 4'R) in writing or deemed approved by Beneficiaries, Trustor shall promptly commence all action necessary to implement such plan and to comply with any requirements or conditions imposed by Beneficiaries, and shall diligently and continuously pursue such action to completion in strict { accordance with the terms of said plan. The rights of Beneficiaries with respect to the approval or disapproval of the environmental plan set forth herein and the actions of Beneficiaries pursuant to 4s such rights are not intended to, and shall not, in and of themselves, confer on Beneficiaries a right to UPI 0 6 qk*e • • 21 manage, operate or control the Property on a continuing basis following the discovery of the event(s) or occurrence(s) described in this subparagraph 9(d). (e) Trustor agrees to submit from time to time, if requested by Beneficiaries, a report, satisfactory to Beneficiaries, specifying any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials on the Property. Beneficiaries reserve the right, in its sole and reasonable discretion, to retain, at Trustor's expense, an independent professional consultant to review any report prepared by Truster and/or to conduct its own investigation of the Property. Truster hereby grants to Beneficiaries, their agent, employees, consultants and contractors the right to enter upon the Property and to perform such tests as Beneficiaries deem are necessary to conduct such a review and/or investigation. Beneficiaries shall hold in confidence any report delivered by Truster to Beneficiaries pursuant to this Section 9, except for disclosure to (a) any consultant(s) hired by Beneficiaries to review said report, (b) legal counsel, accountants and other professional advisors to Beneficiaries, (c) regulatory officials having jurisdiction over Beneficiaries who may request said report, (d) as required by any federal, state, county, regional or local authority or law, rule, regulation or ordinance, (e) as required in connection with any legal proceeding, and (f) any financial institution in connection with a disposition or proposed disposition of all or part of Beneficiaries' or any participant's interests hereunder. "Hazardous Materials" as used in this Deed of Trust shall mean any hazardous or toxic materials, pollutants, effluents, contaminants, radioactive materials, flammable explosives, chemicals known to cause cancer or reproductive toxicity, emissions or wastes and any other chemical, material or substance, the handling, storage, release, transportation, or disposal of which is or becomes prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, is or becomes known to pose a hazard to the health and safety of the occupants of the Property including, without limitation, (i) asbestos, (ii) petroleum and petroleum by-products, (iii) urea formaldehyde foam insulation, (iv) polychlorinated biphenyls, (v) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq. the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or the Resource, Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (vi) all substances now or hereafter designated as "hazardous wastes" in Section 25117 of the California Health & Safety Code or as "hazardous substances" in Section 25316 of the California Health & Safety Code; (vii) all substances now or hereafter designated by the Governor of the State of California pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer or reproductive toxicity, or (viii) all substances now or hereafter designated as "hazardous substances," "hazardous materials" or "toxic substances" under any other federal, state or local laws or in any regulations adopted and publications promulgated pursuant to said laws. CD "Environmental Laws" as used herein shall mean all laws, rules, regulations and t;6F ordinances relating to Hazardous Materials, including, but not limited to, those relating to soil and groundwater conditions and those statutes referred to in the definition of Hazardous Materials set forth hereinabove. t)p 7 "Environmental Activities" as used herein shall mean the use, generation, transportation, treatment, storage or disposal of any Hazardous Materials at any time located on or present on, under or about the Property. (0 Trustor hereby agrees, at its sole cost and expense, to indemnify, protect, hold harmless and defend (with counsel of Beneficiaries' choice), Beneficiaries, their successors and assignees, and the officials, officers, agents, attorneys and employees of each of them (individually, each an "Indemnitee", and collectively, the "Indemnitees") from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses (including, without limitation, attorneys' and experts' reasonable fees, disbursements and costs) of any kind or of any nature whatsoever (collectively, "Claims") which may at any time be imposed upon, incurred or suffered by, or asserted or awarded against, any Indemnitee directly or indirectly relating to or arising from any of the following "Environmental Matters," but excluding any Claims arising solely from the gross negligence or willful misconduct of Beneficiaries: (i) Any past, present or future presence of any Hazardous Materials on, in, under or affecting all or any portion of the Property or on, in, under or affecting all or any portion of any property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (ii) Any past, present or future storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under or from the Property or any portion thereof, (iii) The failure of Trustor to comply with any and all laws, rules, regulations, judgments, orders, permits, licenses, agreements, covenants, restrictions, requirements or the like now or hereafter relating to or governing in any way the environmental condition of the Property or the presence of Hazardous Materials on, in, under or affecting all or any portion of the Property including, without limitation, all Environmental Laws; (iv) The failure of Trustor to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants, and the like relative to any of the Environmental Matters described herein in connection with the Property or the ownership, use, operation or enjoyment thereof, (v) The extraction, removal, containment, transportation or disposal of any and all Hazardous Materials from any portion of the Property or any other property adjacent or proximate to the Property, if such Hazardous Materials originated or allegedly originated on or from the Property; (vi) Any past, present or future presence, permitting, operation, closure, CD abandonment or removal from the Property of any storage tank that at any time contains or contained any Hazardous Materials and is or was located on, in or under the Property or any portion thereof; (fib 8 • • 2~1 (vii) The implementation and enforcement of any monitoring, notification or other precautionary measures that may at any time become necessary to protect against the release or discharge of Hazardous Materials on, in, under or affecting the Property or into the air, any body of water, any other public domain or any property adjacent or proximate to the Property; (viii) Any failure of any Hazardous Materials generated or moved from the Property to be removed, contained, transported or disposed of in compliance with all applicable Environmental Laws; or (ix) Any breach by Trustor of any of its covenants, representations or warranties regarding Environmental Matters contained in this Deed of Trust. The indemnity contained herein shall terminate and be of no further force and effect, if no Claim is pending, upon the repayment of the Loan in accordance with its terms. (g) Trustor hereby represents and warrants as follows: (i) The Property is not and has not been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, or transportation of any Hazardous Materials; (ii) The Property is in compliance with all Environmental Laws; (iii) Trustor has not received any written notice of claims or actions (collectively, "Hazardous Materials Claims") pending or threatened against Trustor or any previous owner or user of the Property (and relating to Trustor's and/or such previous owner's or user's ownership of the Property), by any governmental entity or agency or any other person or entity and relating to Hazardous Materials or pursuant to Environmental Laws; and (iv) Trustor has not received any written notice (i) pursuant to which the Property has been designated as "border zone property" under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, (ii) of a hearing at which the Property will be considered for designation as "border zone property," or (iii) of an occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be designated as "border zone property." The foregoing shall constitute environmental provisions for purposes of California Code of Civil Procedure Section 736. 10. Insurance 10.1. Casualty Insurance. Trustor shall at all times keep the Property insured for the benefit of Trustee and Beneficiaries as follows, despite governmental requirements that may detrimentally affect Trustor's ability to obtain or may materially increase the cost of such insurance coverage: G i~ 10.1.1. Against damage or loss by fire and such other hazards (including lightning, windstorm, hail, explosion, riot, acts of striking employees, civil commotion, vandalism, malicious mischief, aircraft, vehicle, and smoke) as are covered by the broadest form of extended coverage endorsement available from time to time, in an amount not less than the full insurable value (as defined in section 10.9) of the Property, with a deductible amount not to exceed an amount satisfactory to Beneficiaries; 10.1.2. Rent or business interruption or use and occupancy insurance on such basis and in such amounts and with such deductibles as are satisfactory to Beneficiaries; 10.1.3. Against damage or loss by flood, if the Property is located in an area identified by the Secretary of Housing and Urban Development or any successor or other appropriate authority (governmental or private) as an area having special flood hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, on such basis and in such amounts as Beneficiaries may require; 10.1.4. Against damage or loss from (a) sprinkler system leakage and (b) boilers, boiler tanks, heating and air conditioning equipment, pressure vessels, auxiliary piping, and similar apparatus, on such basis and in such amounts as Beneficiaries may require; 10.1.5. During any alteration, construction, or replacement of improvements on the Property, or any substantial portion thereof, a Builder's All Risk policy with extended coverage with course of construction and completed value endorsements, for an amount at least equal to the full insurable value of the improvements on the Property with provision for replacement with the coverage described in Section 10.1.5, without gaps or lapsed coverage, for any completed portion of improvements on the Property and workers' compensation, in statutory amounts; and 10.1.6. Against damage or loss by earthquake, in an amount and with a deductible satisfactory to Beneficiaries, if such insurance is required by Beneficiaries in the exercise of its business judgment in light of the commercial real estate practices existing at the time the insurance is issued and in the County where the Property is located. 10.2. Liability Insurance. Trustor shall procure and maintain workers' compensation insurance for Trustor's employees and comprehensive general liability insurance covering Trustor, Trustee, and Beneficiaries against claims for bodily injury or death or for damage occurring in, on, about, or resulting from the Property, or any street, drive, sidewalk, curb, or passageway adjacent to it, in standard form and with such insurance company or companies and in an amount of at least $2,000,000 combined single limit, or such greater amount as Beneficiaries may require, which insurance shall include completed operations, product liability, and blanket contractual liability coverage that insures contractual liability under the indemnifications set forth in this Deed of Trust (but such coverage or its amount shall in no way limit such indemnification). 3L) 10 10.3. Other Insurance. Trustor shall procure and maintain such other insurance or such additional amounts of insurance, covering Trustor and the Property, as (a) may be required by the terms of any construction contract for any improvements on the Property or by any governmental authority, other than Beneficiaries or (b) may be reasonably required by Beneficiaries from time to time. 10.4. Form of Policies. All insurance required under this Section 10 shall be fully paid for and nonassessable. The policies shall contain such provisions, endorsements, and expiration dates as Beneficiaries from time to time reasonably requests and shall be in such form and amounts, and be issued by such insurance companies doing business in the State of California, as Beneficiaries shall approve in Beneficiaries' sole and absolute discretion. Unless otherwise expressly approved in writing by Beneficiaries, each insurer shall have a Best Insurance Guide, current edition, rating of at least A(viii), or better. All policies shall (a) contain a waiver of subrogation endorsement; (b) provide that the policy will not lapse or be canceled, amended, or materially altered (including by reduction in the scope or limits of coverage) without at least 30 days' prior written notice to Beneficiaries; (c) with the exception of the comprehensive general liability policy, contain a mortgagee's endorsement (438 BFU Endorsement or equivalent), and name Beneficiaries and Trustee as insureds; and (d) include such deductibles as Beneficiaries may approve. If a policy required under this paragraph contains a co-insurance or overage clause, the policy shall include a stipulated value or agreed amount endorsement acceptable to Beneficiaries. 10.5. Duplicate Originals or Certificates. Duplicate original policies evidencing the insurance required under this Section 10 and any additional insurance that may be purchased on the Property by or on behalf of Trustor shall be deposited with and held by Beneficiaries and, in addition, Trustor shall deliver to Beneficiaries (a) receipts evidencing payment of all premiums on the policies and (b) duplicate original renewal policies or a binder with evidence satisfactory to Beneficiaries of payment of all premiums at least 30 days before the policy expires. In lieu of the duplicate original policies to be delivered to Beneficiaries under this Section 10.5, Trustor may deliver an underlier of any blanket policy, and Truster may also deliver original certificates from the issuing insurance company, evidencing that such policies are in full force and effect and containing information that, in Beneficiaries' reasonable judgment, is sufficient to allow Beneficiaries to ascertain whether such policies comply with the requirements of this Section 10. 10.6. Increased Coverage. If Beneficiaries determine that the limits of any insurance carried by Trustor are inadequate or that additional coverage is required, Trustor shall, within 10 days after written notice from Beneficiaries, procure such additional coverage as Beneficiaries may require in Beneficiaries' sole and absolute discretion. 10.7. No Separate Insurance. Trustor shall not carry separate or additional insurance concurrent in form or contributing in the event of loss with that required under this Section 10, unless endorsed in favor of Trustee and Beneficiaries, as required by this Section 10 and otherwise approved by Beneficiaries in all respects. 0 gEY 10.8. Transfer of Title. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Trustor's obligation to repay the Loan, all right, title, and interest of Trustor in and to all insurance policies t.rp required under this Section 10 or otherwise then in force with respect to the Property and all t'C? ki 11 • proceeds payable under, and unearned premiums on, such policies shall immediately vest in the purchaser or other transferee of the Property. 0 (0 3 to l~ 10.9. Replacement Cost. For purposes of this Section 10, the term "full insurable value" means the actual cost of replacing the Property in question, without allowing for depreciation, as calculated from time to time (but not more often than once every calendar year) by the insurance company or companies holding such insurance or, at Beneficiaries' request, by appraisal made by an appraiser, engineer, architect, or contractor proposed by Trustor and approved by said insurance company or companies and Beneficiaries. Trustor shall pay the cost of such appraisal. 10.10. Approval Not Warran ty. No approval by Beneficiaries of any insurer may be construed to be a representation, certification, or warranty of its solvency and no approval by Beneficiaries as to the amount, type, or form of any insurance may be construed to be a representation, certification, or warranty of its sufficiency. 10.11. Beneficiaries' Right To Obtain Insurance. Trustor shall deliver to Beneficiaries original policies or certificates evidencing such insurance at least 30 days before the existing policies expire. If any such policy is not so delivered to Beneficiaries or if any such policy is canceled, whether or not Beneficiaries have the policy in its possession, and no reinstatement or replacement policy is received before termination of insurance, Beneficiaries, without notice to or demand on Truster, may (but are not obligated to) obtain such insurance insuring only Beneficiaries and Trustee with such company as Beneficiaries may deem satisfactory, and pay the premium for such policies, and the amount of any premium so paid shall be charged to and promptly paid by Trustor. Truster acknowledges that, if Beneficiaries obtain insurance, it is for the sole benefit of Beneficiaries and Trustee, and Trustor shall not rely on any insurance obtained by Beneficiaries to protect Trustor in any way. 10.12. Duty To Restore After Casualty. If any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable) results in damage to or loss or destruction of the Property, Trustor shall immediately give notice of such loss or damage to Beneficiaries and, if Beneficiaries so instruct, shall promptly, at Truster's sole cost and expense, regardless of whether any insurance proceeds will be sufficient for the purpose, commence and continue diligently to completion to restore, repaid, replace, and rebuild the Property as nearly as possible to its value, condition, and character immediately before the damage, loss or destruction. 11. Assignment of Insurance and Condemnation Proceeds. Should the Property or any part or appurtenance thereof or right or interest therein be taken or damaged by reason of any public or private improvement, condemnation proceeding (including change of grade), fire, earthquake or other casualty, or in any other manner, Beneficiaries or Trustee may, at their option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any reasonable compromise or settlement in connection with such taking or damage, and obtain all compensation, awards or other relief therefor. All compensation, awards, damages, rights of action and proceeds, including the policies and the proceeds of any policies of insurance affecting the Property, are hereby assigned to Beneficiaries, but no such assignments shall be effective to invalidate or impair any insurance policy. Trustor further assigns to Beneficiaries any return premiums or other repayments upon any insurance at any time provided for the benefit of the Beneficiaries and all refunds or rebates made of taxes or assessments on the Property, and 12 32,o,,, • • 33 Beneficiaries may at any time collect said return premiums, repayments, refunds and rebates in the event of any default by Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note. No insurance proceeds or condemnation awards at any time assigned to or held by Beneficiaries shall be deemed to be held in trust and Beneficiaries may commingle such proceeds with its general assets and shall not be liable for the payment of any interest thereon. Trustor also agrees to execute such further assignments of any such policies, compensation, award, damages, rebates, return of premiums, repayments, rights of action and proceeds as Beneficiaries or Trustee may require. 12. Use of Insurance Proceeds. After any damage by casualty to the Property, whether or not required to be insured against under the policies to be provided by Trustor, Trustor shall give prompt written notice thereof to Beneficiaries generally describing the nature and cause of such casualty and the extent of the damage to or destruction of the Property. Trustor shall have the obligation to promptly repair the damage, regardless of whether and to the extent the casualty was covered by an insurance policy. For these purposes, Beneficiaries shall make available to Truster proceeds of any insurance policy covering the casualty and maintained by Trustor under and subject to each of the following terms and conditions: (a) Insurance proceeds which are directly attributable to the damage (herein the "Proceeds") shall be released to Trustor upon and subject to satisfaction of each of the following conditions: (i) There exists no default under the Loan Agreement, this Deed of Trust or the Promissory Note at any time prior to or during the course of reconstruction; (ii) Receipt by Beneficiaries of satisfactory written evidence that any proposed restorations by Trustor will comply with all statutes, ordinances, regulations, rules, rulings, restrictive covenants, reciprocal easements, leases and contracts; that all proposed plans and specifications are approved by all required governmental agencies; and that Trustor has obtained all necessary building and other permits and approvals for such reconstruction; (iii) Receipt by Beneficiaries of proof reasonably satisfactory to Beneficiaries that there exists and will continue to exist, until the Property is reasonably expected to be restored and fully occupied, a source of funds sufficient to pay the Loan as and when due. Such computation shall include Beneficiaries' estimate of the amount necessary to pay all of Trustor's operating expenses and pay all of the sums due on the Loan over the projected period of reconstruction, and Beneficiaries may require Trustor to establish and fund a holdback account up to the r amount of the difference between the anticipated debt service and operating expenses of Trustor. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts against accrued interest and the outstanding amounts due under the Loan; b~ btu 13 ~b (iv) Receipt by Beneficiaries from Trustor of sufficient cash funds to cover one hundred percent (100%) of any difference between the estimated costs of completion, as certified by an architect or engineer approved by Beneficiaries in writing, and the Proceeds, the amount of such difference shall be paid in cash to Beneficiaries with said amount and any interest earned thereon shall be released to Beneficiaries, as necessary, following the exhaustion of available insurance proceeds, or at such earlier time deemed appropriate by Beneficiaries. In the event of any default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements, Beneficiaries may, at their option, apply any portion or all of such amounts and interest against the accrued interest and principal sums outstanding under the Loan; (v) Receipt by Beneficiaries of a certificate executed by Trustor describing the work to be performed in connection with such restoration and a certificate by an independent architect or engineer selected or approved by Beneficiaries in writing stating that the work described in the Trustor's certificate is adequate to restore the Property to substantially the same size, design, quality and condition as existed prior to the damage. The architect's or engineer's certificate shall include its estimate of all costs and expenses which will be required to complete such restorations; and (vi) Such additional conditions as may reasonably be imposed by Beneficiaries to provide assurance that the Proceeds will be used to restore the Property to substantially the same condition, to the extent possible, as existed prior to the damage or taking, including, without limitation, Beneficiaries' prior written approval of all permits, plans, specifications and construction contracts for such restoration. (b) Beneficiaries shall disburse the Proceeds in increments corresponding to the percentage of completion costs then incurred for labor performed and materials furnished (which may, at Beneficiaries' discretion, be subject to reasonable holdbacks required by Beneficiaries, not exceeding ten percent (10%) of the total estimated cost of completion and which will be released upon lien-free completion of the restorations in accordance with the requirements of this Deed of Trust and the expiration of the periods within which any mechanic's or materialman's lien may be filed). Disbursements shall be conditioned upon Beneficiaries' written confirmation that all of its requirements therefor have been satisfied, including its receipt of periodic inspection and completion percentage certificates executed by the project architect approved by Beneficiaries in writing, payment acknowledgments and unconditional lien releases, and such other conditions to periodic disbursements as are customarily imposed by Beneficiaries in connection with its construction loans, no defaults or misrepresentations of Truster and Trustor's obtaining all title insurance endorsements, payment and performance bonds, and builder's risk policies required by Beneficiaries. Trustor shall, C9 during the progress of the work, also submit to the Beneficiaries, at periodic intervals not less frequently than monthly, a certificate satisfactory to Beneficiaries furnished by an architect or p engineer approved by Beneficiaries in writing showing the cost of labor and materials incorporated into the work during the period specified in the certificate, which period shall not include any part of j~ the period covered by any other such certificate; and k~ 6'0 fir; 14 (c) After completion of the restoration and subject to the conditions herein stated, and, if Trustor is not then in default under the Loan Agreement, this Deed of Trust or the Promissory Note, Beneficiaries shall pay to Truster (or such other persons or entities that may have an interest therein) the undisbursed Proceeds and Trustor's deposit for any estimated restoration expense held by Beneficiaries upon delivery to Beneficiaries of (i) a certificate executed by Trustor showing that the work has been completed and that all bills for labor performed and materials furnished in connection therewith have been paid, (ii) unconditional lien releases and other appropriate written acknowledgments of payment in full executed by all contractors and subcontractors performing labor on or furnishing materials to the Property; (iii) a certificate executed by an architect or engineer approved by Beneficiaries confirming that the Property has been restored to substantially the same size, design, quality and condition as existed immediately prior to the damage and in accordance with all applicable federal, state, local and other governmental laws and regulations; and (iv) a certificate of occupancy and other permits issued by the appropriate governmental authorities authorizing the occupancy of the Property for its intended purposes and use. If: (i) any of the conditions in subparagraph 12(b), above, are not fulfilled within sixty (60) days after the date of the casualty, or if the reconstruction cannot be completed within such 60 day period, within such additional time as may be reasonably necessary to complete the reconstruction, not to exceed one hundred eighty (180) days, and provided such additional time does not result in a breach by the Trustor under the Loan Agreement, this Deed of Trust or the Promissory Note; or (ii) Trustor fails to exercise diligence in promptly commencing or continuously prosecuting the work; or (iii) Trustor is otherwise in default under the Loan Agreement, this Deed of Trust, the Promissory Note or any reconstruction requirements set forth therein or herein, then in any such event Beneficiaries may, at their option, apply the Proceeds and any deposits made by Trustor hereunder to the indebtedness secured hereby, or to complete the necessary repairs and use the Proceeds for the payment thereof. If the Proceeds are so applied to the indebtedness and, together with any other payments due to Beneficiaries under the Loan and all other debts of Trustor to Beneficiaries are discharged, Beneficiaries shall not have the right to require the Property to be repaired under the terms of this Deed of Trust, but Beneficiaries' rights under any other lien that it holds against the Property and which is not also required to be released shall not be thereby impaired or affected. Truster shall not commence any repairs or reconstruction of any casualty until Beneficiaries consent in writing thereto, which consent may be withheld by Beneficiaries in its sole discretion, until all of the conditions contained in this paragraph are satisfied. All work of repairing or restoring damage shall be done in a good and workmanlike manner with materials of good quality and in conformity with all applicable laws, ordinances, rules and regulations. Nothing herein contained shall be construed as authorizing the Truster to subject the Property to any mechanic's, materialman's or other lien for the payment of bills for material furnished or labor performed in connection with any work contemplated by this paragraph 12. In any event in which the Beneficiaries are not otherwise obligated to authorize the insurance proceeds to be applied to the restoration of the Property as hereinabove described and, at the option of Beneficiaries, the proceeds of a loss under any policy, whether or not endorsed payable to Beneficiaries, may be applied in payment of the principal, interest or any other sums secured by this Deed of Trust, whether or not then due, or to the restoration or replacement of any building on the Property, without in any way affecting the enforceability or priority of the lien of this Deed of S 15 0 0 Y4~~ Trust or the obligation of the Trustor or any other person for payment of the indebtedness hereby secured or the reconstruction of the damaged improvements, whether such Trustor be the then owner of said building or improvements or not. 13. Use of Condemnation Awards. Should the Property or any portion thereof or any improvements thereon be taken or damaged by reason of any public improvement or condemnation proceeding, or by any other form of eminent domain, Trustor agrees that Beneficiaries shall be entitled to all compensation, awards and other payments or relief therefor and may, at its option, commence, appear in or prosecute in its own name any action or proceeding or make any reasonable compromise or settlement in connection with such taking or damage, and Trustor agrees to pay Beneficiaries' costs and reasonable attorneys' fees incurred in connection therewith. All such compensation, awards, damages, rights of actions and proceeds may be applied by Beneficiaries toward the repair of any damage to the improvements on any portion of the Property not subject to the taking as and subject to the same conditions herein provided with respect to the disposition of insurance proceeds; provided, however, that if the taking results in a loss of the Property to an extent which, in the reasonable opinion of Beneficiaries, renders or will render the Property not economically viable or which substantially impairs Beneficiaries' security or lessens to any extent the value, marketability or intended use of the Property, Beneficiaries may apply the condemnation proceeds to reduce the unpaid indebtedness secured hereby in such order as Beneficiaries may determine. Trustor agrees to execute such further assignments of condemnation proceeds as Beneficiaries or Trustee may from time to time require. If so applied, any proceeds in excess of the unpaid principal and accrued interest due under the Loan plus all other sums due to Beneficiaries from Trustor shall be paid to Trustor or Trustor's assignee. 14. Property Taxes and Assessments. Trustor shall pay in full on or before the due date thereof all rents, taxes, assessments and encumbrances, with interest, that may now or hereafter be levied, assessed or claimed upon the Trustor's ownership or use of the Property that is the subject of this Deed of Trust or any part thereof, and upon request, provide the Beneficiaries with copies of official receipts for payment therefor, and shall pay all taxes imposed upon, and reasonable costs, fees and expenses of, this Deed of Trust. 15. Assessment Districts. Trustor agrees to consent to inclusion of the Property in any local improvement or special assessment district and to the imposition of any special or local improvement assessment against the Property, upon the Beneficiaries' written request. 16. Mortgage Taxes. In the event of the passage after the date of this Deed of Trust of any federal, state or municipal law, ordinance or regulation relating to the taxation of mortgages, deeds of trust or debts secured thereby so as to tax or assess any interest of Beneficiaries or any payments secured hereby, Trustor shall bear and pay the full amount of such taxes. C7 17. Special Assessment and Insurance Reserves. Trustor shall, at the request of the Beneficiaries, pay to Beneficiaries equal monthly installments of the special assessments and insurance premiums estimated by the Beneficiaries next to become due, in addition to any other 4L periodic payment or performances owed by Trustor under the Loan Agreement, the Promissory Note 1 or this Deed of Trust, so that thirty (30) days before the due date thereof, or of the first installment 1 thereof, Beneficiaries will have on hand an amount sufficient to pay the next maturing assessments l.q and insurance premiums. The amount of the additional payment to be made on account of lily 16 • • 3? assessments and insurance premiums shall be adjusted annually or more frequently as Beneficiaries deem necessary and any deficit shall be immediately paid by Trustor upon request and any surplus shall be credited on the mortgage account. Subsequent payments on account of assessments and insurance premiums shall be made in accordance with the next estimate by the Beneficiaries of annual requirements. To the extent permitted by applicable law, all monies paid to Beneficiaries on account of assessments or insurance premiums may be commingled and invested with Beneficiaries' own funds and, unless and to the extent required by law, shall not bear interest for Trustor. Beneficiaries shall not exercise the rights granted in this paragraph so long as all of the following conditions are met: (a) There is no other default under the Loan Agreement, this Deed of Trust or the Promissory Note; and (b) Trustor pays all assessments and insurance premiums prior to delinquency. 0 03 Upon Trustor's failure to comply with either of the conditions (a) and (b), above, Beneficiaries may, at their option, then or thereafter exercised, require Trustor to pay the additional sums described in this paragraph. 18. Truster's Right to Contest Taxes. Truster shall have the right to contest any real property tax or special assessment so long as (a) no defaults exist under the Loan Agreement, this Deed of Trust or the Promissory Note; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition to pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent and continuously pursues the same in good faith and with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the date of resolution of such contest. 19. Report of Real Estate Transaction. Trustor has made or provided for making, or will make or provide for making, on a timely basis, any reports or returns required by state or local law relating to the Property, or the development of the Property, notwithstanding the fact that the primary reporting responsibility may fall on the Beneficiaries, or other party. Trustor's obligations under this paragraph will be deemed to be satisfied, if proper and timely reports and returns required under this paragraph are filed by a title company involved in each real estate transaction relating to the Property, but nothing contained herein shall be construed to require such returns or reports to be filed by Beneficiaries. 20. Leases/Rental Agreements. With respect to any leases and/or rental agreements currently or hereafter relating to any portion of the Property, Trustor agrees that: (a) Trustor shall take all reasonable measures to cause each dwelling unit on the Property to be made available for rent and occupancy by a "low- or moderate-income household" as this term is defined in the HOME Investment Partnerships Regulations. For purposes of this subparagraph (a), compliance by the Trustor of the applicable provisions of the HOME Regulatory Agreement of even date herewith relating to the rental and occupancy 17 • • 3~ of each such dwelling unit on the Property shall be deemed to be compliance with the provisions of this subparagraph (a); (b) Each lease or rental agreement for each dwelling unit on the Property shall comply with the covenants of the Trustor under the Loan Agreement, this Deed of Trust the Promissory Note and the HOME Regulatory Agreement of even date herewith; (c) Truster shall fully comply with all of its obligations under all leases or rental agreements on the Property so that the same shall not become in default and shall do all that is necessary to preserve the same in force; (d) Trustor shall not permit an assignment of any leases, or any subletting thereunder; and (e) Beneficiaries and their successors and assigns (including any purchaser at a foreclosure or trustee's sale) shall have the right, at its option, to recognize and continue in effect any such leasehold interests following any foreclosure or trustee's sale hereunder. 21. Collateral Assignment of Leases and Rents to Beneficiaries. Trustor hereby unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries, all leases, subleases, rental agreements, occupancy agreements, licenses, concessions, entry fees and other agreements that grant a possessory interest in all or any part of the Property, together with all rents, issues, deposits and profits of the Property, together with the immediate and continuing right to collect and receive the same, for the purpose and upon the terms and conditions hereinafter set forth. Trustor further unconditionally and absolutely assigns, transfers and sets over unto Beneficiaries all of its right, title and interest in and to any plans, drawings, specifications, permits, engineering reports and land planning maps, which it now has or may hereafter acquire regarding any improvements now on or to be constructed upon the Property. Beneficiaries confer upon Trustor a license to collect and retain the rents, issues, deposits and profits of the Property, as they become due and payable, subject, however, to the right of Beneficiaries upon a default hereunder to revoke said license, at any time, in its sole discretion and without notice to Trustor. Beneficiaries may revoke said license and collect and retain the rents, issues, deposits and profits of the Property assigned herein to Beneficiaries upon the occurrence of an Event of Default hereunder or under any of the obligations secured hereby, and without taking possession of all or any part of the Property, and without prejudice to or limitation upon any of its additional rights and remedies granted pursuant hereto or pursuant to the Loan Agreement or the Promissory Note, and Beneficiaries shall, in their sole and absolute discretion, have the right to apply such income for the payment of all expenses or credit the net amount of income that it receives from the Property, to the indebtedness in the manner, order and amounts as Beneficiaries shall determine. In the event the Beneficiaries exercise or are l entitled to exercise any of their rights or remedies under this Deed of Trust as a result of the default of the Trustor under the Loan Agreement, and if any lessee, sublessee or assignee under any lease assigned under this paragraph files or has filed against it any petition in bankruptcy or for reorganization or undertakes or is subject to similar action, Beneficiaries shall have, and are hereby lh assigned by Truster, all of the rights that would otherwise inure to the benefit of Trustor in such A proceedings, including, without limitation, the right to seek "adequate protection" of its interests, to U1 compel assumption or rejection of any such lease and to seek such claims and awards as may be to 0 18 • • 39 sought or granted in connection with the rejection of any such lease. Unless otherwise agreed to by Beneficiaries in writing, Beneficiaries' exercise of any of the rights provided in this paragraph shall preclude Trustor from the pursuit and benefit thereof, without any further action or proceeding of any nature. The foregoing assignment shall not impose upon Beneficiaries any duty to produce rents from the Property, and such assignment shall not cause Beneficiaries to be a "mortgagee in possession" for any purpose. The rights granted in this paragraph shall be in addition to and not in derogation of any similar or related rights granted to Beneficiaries in any separate assignment of leases and rents. 22. Impairment of Securi ty. Trustor shall not, without first obtaining Beneficiaries' written consent, assign any of the rents or profits of the Property or change the general nature or use of the Property or initiate or acquiesce in any zoning reclassification, or do, or suffer to be done, any act or thing that would impair the security of Beneficiaries' lien upon the Property or the rents thereof. Trustor shall not, without the written consent of Beneficiaries, (i) initiate or support any zoning reclassification of the Property, seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in a manner that would result in such use becoming a non-conforming use under applicable zoning ordinances; (ii) modify, amend or supplement any easement, reservation, restriction, covenant, condition or encumbrance pertaining to the Property; (iii) impose or consent to any restrictive covenant or encumbrance upon the Property, execute or file any subdivision or parcel map affecting the Property or consent to the annexation of the Property to any municipality; or (iv) permit or suffer the Property to be used by the public or any person in such manner as might make possible a claim of any implied dedication or easement. 23. Defense of Suits. Trustor shall appear in and defend any suit, action or proceeding that might affect the value, priority or enforceability of this Deed of Trust or the Property itself or the rights or powers of Beneficiaries or Trustee, including any suits relating to damage to property or death or personal injuries, whether or not Trustor is ultimately found liable for any negligence or other wrongful conduct or inaction. .Trustor, following mutual negotiations with Beneficiaries, has waived and does hereby waive any immunity to such liability to Beneficiaries under any industrial insurance or similar statute, to the extent such immunity would impair Beneficiaries' rights against Trustor. Should Beneficiaries elect to appear in or defend any such action or proceeding or be made a party to any such action or proceeding by reason of this Deed of Trust, or elect to prosecute such action as appears necessary to preserve the value, priority or enforceability of this Deed of Trust or the Property itself, Trustor will at all times indemnify from and, on demand, reimburse Beneficiaries and Trustee for, any and all loss, damage, expense or cost, including cost of evidence of title expert witness fees and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and any appeal or petition for review thereof, and the sum of such expenditures shall be secured by this Deed of Trust with interest at the rate of 10% per annum and shall be due and payable on demand. Trustor shall pay costs of suit, cost of ~y evidence of title expert witness fees and reasonable attorneys' fees in any proceeding or suit brought by Beneficiaries to foreclose this Deed of Trust and in any appeal therefrom or petition for review thereof. 24. Due on Sale and Sale of Premises or Additional Financing Not Permitted. Trustor specifically agrees that: ltt 19 erv~ 9 0 q (a) In order to induce Beneficiaries to make the loan secured hereby, Truster agrees that if the real property described in Exhibit "A" or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered with financing other thanthat secured hereby or otherwise alienated by Truster whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or without the prior written consent of Beneficiaries, then Beneficiaries, at their option, may declare the Promissory Note secured hereby and all other obligations hereunder to be forthwith due and payable. Except as shall be otherwise specifically provided herein, any (a) change in the legal or equitable ownership of the real property described in Exhibit "A" whether or not of record, or (b) change in the form of entity or ownership (including the hypothecation or encumbrance thereof) of any ownership interest in Trustor shall be deemed a transfer of an interest in the real property described in Exhibit "A"; provided, however, that any transfer of the real property described in Exhibit "A" or any interest therein to an entity which controls, is controlled by, or is under common control with Truster shall not be considered a transfer hereunder. In connection herewith, the financial stability and managerial and operational ability of Trustor is a substantial and material consideration to Beneficiaries in their agreement to make the loan to Trustor secured hereby. The transfer of an interest in the real property described in Exhibit "A" may materially alter and reduce Beneficiaries' security for the indebtedness secured hereby. Moreover, Beneficiaries have agreed to make its loan based upon the presumed value of the real property described in Exhibit "A" and the rents and profits thereof Therefore, it will be a diminution of Beneficiaries' security if junior financing, except as shall be permitted by Beneficiaries, or if other liens or encumbrances should attach to the real property described in Exhibit "A". (b) Trustor may request Beneficiaries to approve a sale or transfer of the real property described in Exhibit "A" to a party who would become the legal and equitable owner of the real property described in Exhibit "A" and would assume any and all obligations of Trustor under the Loan Documents (the "Purchaser"). Beneficiaries shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Beneficiaries may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the real property described in Exhibit "A", or any part thereof, becomes vested in a person or persons other than Trustor, the Beneficiaries may deal with such successor or successors in interest with reference to the Note or this Deed of Trust in the same manner as with Truster, without in any way releasing, discharging or otherwise affecting the liability of Truster under the Promissory Note, this Deed of Trust or the other Loan Documents. No sale of Trustor's interest in the real property described in Exhibit "A", no forbearance on the part of Beneficiaries, no extension of the time for the payment of the Deed of Trust indebtedness or any change in the terms thereof consented to by Beneficiaries shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of the Truster herein, either in whole or in part. Any deed conveying the real property described in Exhibit "A", or any part thereof, shall C7 provide that the grantee thereunder assume all of Trustor's obligations under the Note, this Deed of Trust and all other Loan Documents. In the event such deed shall not contain such assumption, Beneficiaries shall have all rights reserved to it hereunder in the event of a default or if Beneficiaries shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the real property described in Exhibit "A" or t such portion thereof subject to this Deed of Trust. Nothing contained in this section shall be Lid construed to waive the restrictions against the transfer of the real property described in Exhibit "A" Gf~ 20 M • • yl contained in paragraph 24(a). 25. Further Encumbrances. Trustor acknowledges that Beneficiaries relied upon the Property not being subject to additional liens or encumbrances for reasons including, but not limited to, the possibility of competing claims or the promotion of plans disadvantageous to Beneficiaries in bankruptcy; the risks to Beneficiaries in a junior lienholder's bankruptcy; questions involving the priority of future advances, the priority of future leases of the Property, the marshaling of Trustor's assets, and the Beneficiaries' rights to determine the application of condemnation awards and insurance proceeds; the impairment of the Beneficiaries' option to accept a deed in lieu of foreclosure; the increased difficulty of reaching agreements for workouts or to the actions to be taken by trustees, receivers, liquidators and fiduciaries; and Beneficiaries' requirements of Trustor's preservation of its equity in the Property and the absence of debt that could increase the likelihood of Trustor's being unable to perform its obligations when due. Therefore, as a principal inducement to Beneficiaries to make the Loan secured by this Deed of Trust, and with the knowledge that Beneficiaries will materially rely upon this paragraph in so doing, Trustor covenants not to further encumber the Property without first receiving Beneficiaries' express written consent in each instance, which consent may be withheld by Beneficiaries in their sole discretion. A breach of this covenant shall constitute a default under the Loan Agreement and this Deed of Trust, and Beneficiaries may exercise all remedies available to Beneficiaries under the Loan Agreement or this Deed of Trust. Without limiting the generality of the foregoing, no mortgage, deeds of trust or other forms of security interests prior or subordinate to the security interests of Beneficiaries shall encumber the Property, except for that certain purchase money subordinate deed of trust of even date herewith by and among the Trustor, the City and the Trustee in the original principal amount of $457,899 to which the Beneficiaries hereby consent as a subordinate security interest to this Deed of Trust. 26. RESERVED - NO TEXT. 27. Event of Default. An "Event of Default" shall be deemed to have occurred in any of the following circumstances: (a) Failure of Trustor to satisfy any performance or payment obligation required under the HOME Regulatory Agreement, the subordinate deed of trust referenced in paragraph 25 of this Deed of Trust, the Loan Agreement or the Promissory Note when due; (b) Failure of Trustor to properly perform its obligations under this Deed of Trust, the Loan Agreement or the Promissory Note by a date specified herein or therein or in a written notice to Trustor, if applicable, (which date specified shall not be less than thirty (30) days from the date of such notice, and shall be determined by Beneficiaries in their sole discretion); provided, however, that: (i) if such default set forth in the notice cannot be cured by the date specified, (ii) Trustor commences to cure the default prior to the date specified in the notice, and (iii) Trustor diligently proceeds to cure the default thereafter; then the date specified in the notice may be extended by any period reasonably necessary to complete the cure, but in no event for more than ninety (90) days after the date originally specified in the wy notice; t1f1 w 21 • (c) The condemnation, seizure or appropriation of, or the occurrence of an uninsured casualty with respect to, any material (as determined by Beneficiaries) portion of the Property; (d) Trustor becomes insolvent or generally is not paying its debts as they become due, as defined in the United States Bankruptcy Reform Act, as amended from time to time (which Act, as amended, is herein called the "Bankruptcy Code"), or shall file a voluntary petition in bankruptcy seeking to effect a reorganization plan or other arrangement with creditors or any other relief under the Bankruptcy Code or under any other state or federal law relating to bankruptcy or other relief for debtors, whether now or hereafter in effect, or shall consent to or suffer the entry of any order for relief in any involuntary case under the Bankruptcy Code, or shall be the defendant or subject of any involuntary petition filed under the Bankruptcy Code that is not dismissed within ninety (90) days of the filing thereof, or shall make an assignment for the benefit of creditors; (e) Any court (or similar tribunal) having jurisdiction over Trustor or any of the Property or other property of Trustor shall enter a decree or order appointing a receiver, trustee, guardian, conservator, assignee in bankruptcy or insolvency of Trustor, of any of the Property, of any other real property of Trustor, of any other significant asset of Trustor, or shall enter a decree or order for relief in any involuntary case under the Bankruptcy Code; (f) The entry of any final judgment or arbitration award against Trustor that is not paid or stayed pending appeal, or the sequestration or attachment of, or any levy or execution upon (i) any of the Property, (ii) any other collateral provided by Trustor or any other person under this Deed of Trust or as security for performance or payment of the Loan, or (iii) any significant portion of the other assets of Trustor, which is not released, expunged or dismissed prior to the earlier of (10) days after such sequestration, attachment or execution or five (5) days before the sale of any such assets; (g) Trustor shall dissolve, liquidate or wind up its affairs or shall bring any legal action or take any other action contemplating such dissolution, liquidation or winding up; (h) The determination by Beneficiaries that any representation, warranty or statement contained in this Deed of Trust or the Loan Agreement or in any other writing delivered to Beneficiaries in connection with the Loan or the Promissory Note was incomplete, untrue or misleading in any material respect as of the date made; (i) The enactment of any law that deducts from the value of the Property for the purpose of taxation of any lien thereon or imposing upon Beneficiaries the payment of the whole or any part of the taxes, assessments, charges or liens herein required to be paid by Trustor or changing in any way the laws relating to the taxation of deeds of trust or debts secured by deeds of trust or Beneficiaries' interest in the Property or the manner of collection of taxes so as to affect this Deed of Trust or the Loan Agreement or the Promissory Note or the holder thereof or imposing a tax, other than a Federal or state income tax, on or payable by Trustee or Beneficiaries by reason of their ownership of this Deed of Trust, the Loan q, 2 22 Agreement or the Promissory Note and, in such event, Trustor, after demand by Beneficiaries, does not pay such taxes or assessments or reimburse Beneficiaries therefor or, in the opinion of counsel for Beneficiaries, it might be unlawful to require Trustor to make such payment or the making of such payment might result in the imposition of interest costs beyond the maximum amount permitted by applicable law; 0) The occurrence of a default by Trustor under any of the contracts and agreements assigned to Beneficiaries under this Deed of Trust, where such default is not cured within the applicable cure period, if any, or the failure of Trustor to diligently enforce its rights and remedies under such contracts and agreements upon the default of any other party thereto; and (k) Trustor acknowledges and agrees that all material non-monetary defaults are conclusively deemed to be and are defaults impairing the security of this Deed of Trust, and that Beneficiaries shall be entitled to exercise any appropriate remedy, including, without limitation, foreclosure of this Deed of Trust, upon the occurrence of any such material non-monetary default. 28. Rights and Remedies on Default. Upon the occurrence of any Default or Event of Default under this Deed of Trust and at any time thereafter, Trustee or Beneficiaries may exercise any one or more of the following rights and remedies: (a) Loan Agreement. Beneficiaries may exercise any right or remedy provided for in the Loan Agreement or the Promissory Note; (b) Acceleration. Beneficiaries may declare the Loan and all other performances or sums secured by this Deed of Trust immediately due and payable; (c) Foreclosure Rights. Beneficiaries may declare all performances or sums secured hereby immediately due and payable either by commencing an action to foreclose this Deed of Trust as a mortgage, or by the delivery to Trustee of a 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 in case of foreclosure by exercise of the power of sale herein. Should Beneficiaries elect to foreclose by exercise of the power of sale herein, Beneficiaries shall also deposit with Trustee this Deed of Trust, the documents evidencing the Loan and any receipts and evidence of expenditures made and secured hereby as Trustee may require, and notice of sale having been given as then required by law and after lapse of such time as may then be required by law after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place of sale fixed by it in said notice of sale at public auction to the highest bidder upon any terms and conditions specified by Beneficiaries and permitted by applicable law. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser its deed or deeds conveying the Property, or any portion thereof, so sold, but without any covenant or warranty, express or implied. The recitals in such deed or deeds of any matters or facts, shall be conclusive proof of the truthfulness 23 ~ ~ uN thereof. Any person, including Trustor, Trustee or Beneficiaries, may purchase all or any portion of the Property, as applicable, at sale. (d) Right to Rescind. Beneficiaries, from time to time before Trustee's sale, may rescind any such notice of breach or default and of election to cause the Property to be sold by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiaries of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiaries to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause the Property to be sold to satisfy the obligations hereof, nor otherwise affect any provision, agreement, covenant or condition of the Loan Agreement and/or of this Deed of Trust or any of the rights, obligations or remedies of the parties hereunder. (e) UCC Remedies. Beneficiaries shall have all the rights and remedies under this Deed of Trust as a secured party under the California Uniform Commercial Code, including, without limitation, Section 9501(4) thereof. Upon request, Trustor shall assemble and make such collateral available to Beneficiaries at a place to be designated by Beneficiaries that is reasonably convenient to both parties. Upon repossession, Beneficiaries may propose to retain the collateral in partial satisfaction of the Loan or sell the collateral at public or private sale in accordance with the Uniform Commercial Code as adopted in the state where the Property is situated or any other applicable statute. Such sale may be held as a part of, distinctive from or without a trustee's sale or foreclosure of the real property secured by this Deed of Trust. If any notification of disposition of all or any portion of the collateral is required by law, such notification shall be deemed reasonably and properly given, if mailed at least ten (10) days prior to such disposition. If Beneficiaries dispose of all or any part of the collateral after default, the proceeds of disposition shall be applied in the following order: (i) to the reasonable expenses of retaking, holding, preparing for sale, selling the collateral, and the, like; (ii) to the reasonable attorneys' fees and legal expenses incurred by Beneficiaries; and (iii) to the satisfaction of the indebtedness secured by this Deed of Trust. (f) Remedial Advances. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiaries or Trustee, without obligation so to do and ? without demand upon Trustor and without releasing Trustor from any obligation hereof, may (i) make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiaries or Trustee being authorized to enter upon the ty Property for such purposes; (ii) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiaries or Trustee, lq (iii) pay, purchase, contest or compromise any encumbrance, charge, lien, tax or assessment, 24 C;? or the premium for any policy of insurance required herein; and in exercising any such power, incur any liability, expend whatever amounts in its absolute discretion it may deem necessary therefor, including cost of evidence of title, employ counsel and pay such counsel's fees. Beneficiaries shall be subrogated to the rights and lien interests of any person who is paid by Beneficiaries pursuant to the terms of this paragraph. Trustor shall repay immediately on written notice to Trustor all sums expended or advanced hereunder by or on behalf of Beneficiaries, with interest from the date of such advance or expenditure at the rate of 10% per annum, and the repayment thereof shall be secured hereby. (g) Summary Possession. Beneficiaries may, at their option, either in person or by agent, employee or court-appointed receiver, enter upon and take possession of the Property and continue any work of improvement, repair or renovation thereof at Trustor's expense and lease the same or any part thereof, making such alterations as it finds necessary, and may terminate in any lawful manner any lease(s) of the Property, exercising with respect thereto any right or option available to the Trustor. The entering upon and taking possession of the Property, the collection of rents, issues and profits, or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage to the Property, and the application or release thereof shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (h) Collection of Rents. Beneficiaries may require any tenant or other user of the Property to make payments of rent or use fees directly to Beneficiaries, regardless of whether Beneficiaries has taken possession of the Property. If any rents are collected by Beneficiaries, then Trustor hereby irrevocably designates Beneficiaries as Trustor's attorney- in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Beneficiaries in response to Beneficiaries' demand shall satisfy the obligation for which the payments are made, whether or not any proper grounds for the demand existed. Beneficiaries may exercise its rights under this paragraph either in person, by agent or through a receiver. (i) Beneficiaries' Enforcement of Leases. Beneficiaries are hereby vested with full power to use all measures, legal and equitable, deemed by it necessary or proper to collect the rents assigned in this Deed of Trust, including the right, in person or by agent, employee or court-appointed receiver, to enter upon the Property, or any part thereof, and take possession thereof forthwith to the extent necessary to effect the cure of any default on the part of Trustor as lessor in any leases or upon Trustor's default under the Loan Agreement.. Trustor hereby grants to Beneficiaries full power and authority to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Trustor, including the right to operate and manage the Property, make and amend leases and perform any other acts reasonably necessary to protect the value, priority or enforceability of any security for the obligations of the Trustor under the Loan Agreement and use and apply all of the rents and other income herein assigned to the payment of the costs of exercising such remedies, of managing and operating the Property, and of any indebtedness or liability of Trustor to Beneficiaries, including but not limited to the payment of taxes, special assessments, insurance premiums, damage claims, the costs of maintaining, repairing, rebuilding and restoring any improvements on the Property or of making the same rentable, attorneys' fees incurred in connection with the enforcement of this Deed of Trust, and any 25 0 1 0 : q C40 principal and interest payments due from Trustor to Beneficiaries under the Loan Agreement, the Promissory Note and this Deed of Trust, all in such order as Beneficiaries may determine. Beneficiaries shall be under no obligation to enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under any leases and does not assume any of the liabilities in connection with or arising or growing out of the covenants and agreements of Trustor in any leases. It is further understood that this Deed of Trust shall not operate to place responsibility for the control, care, management or repair of the Property, or parts thereof, upon Beneficiaries nor shall it operate to make Beneficiaries liable for the carrying out of any of the terms and conditions of any leases, or for any waste of the Property by the lessee under any leases or by any other party, or for any dangerous or defective condition of the Property or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any lessee, invitee, licensee, employee or stranger, except as may result from the gross negligence or willful misconduct of Beneficiaries after taking possession of the Property hereunder. 0) Beneficiaries' Enforcement of Contracts. Beneficiaries shall have the right to enforce Trustor's rights under all architect, engineering, construction and related contracts and to bring an action for the breach thereof in the name of Beneficiaries or, at Beneficiaries' option, in the name of Trustor, in the event any architect, engineer, contractor or other party breaches their respective contract or contracts, regardless of whether Beneficiaries acquires or retains any interest in the Property. Trustor hereby irrevocably appoints Beneficiaries as its attorney-in-fact for the purposes of the foregoing, which power shall be durable and coupled with an interest. Beneficiaries do not assume and shall not be obligated to perform any of Trustor's obligations under said contracts nor shall Beneficiaries be required to enforce such contracts or bring action for the breach thereof, provided; however, any performance of the respective contracts specifically required by the Beneficiaries in writing, following any default by Trustor under the Loan Agreement or the contracts, and which is properly and timely undertaken by the contractor, engineer or architect, shall be paid for by the Beneficiaries in accordance with the terms and conditions of the contracts. Such payments shall be deemed additions to the amounts owed by Trustor to the Beneficiaries under the Loan Agreement and Promissory Note and secured by this Deed of Trust and shall bear interest at the rate of 10% per annum from the date of advance to and including the date of full payment, and shall be secured by any deed of trust, collateral assignment of leases and rents, security agreement and other documents granted to secure the Loan. (k) Appointment of Receiver. Beneficiaries have the right to have a receiver appointed to take possession of any or all of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, to collect the income from the Property and apply the proceeds, over and above the cost of the receivership, against the Loan. The receiver may serve without bond, if permitted by law. Beneficiaries' right to the appointment of a receiver shall exist whether or not the. apparent value of the Property exceeds the indebtedness secured hereby by a substantial amount. UJ Employment by Beneficiaries shall not disqualify a person from serving as a receiver. Upon taking possession of all or any part of the Property, the receiver or Beneficiaries may: (i) use, operate, manage, control and conduct business on the Property and make expenditures for all maintenance and improvements as in its judgment are necessary and proper; (ii) collect the 0 rr~ 26 • 0 income from the Property and apply such sums to the expenses of use, operation and management; and (iii) at Beneficiaries' option, complete any construction in progress on the Property, and in that connection pay bills, borrow funds, employ contractors and make any changes in plans or specifications as Beneficiaries. deems reasonably necessary or appropriate. If the revenues produced by the Property are insufficient to pay expenses, the receiver may borrow, from Beneficiaries or otherwise, as Beneficiaries may deem reasonably necessary for the purposes stated in this paragraph. The amounts borrowed or advanced shall be payable on demand and bear interest from the date of expenditure until repaid at the rate of 10% per annum. Such sums shall become a part of the debt secured by this Deed of Trust. (1) Specific Enforcement. Beneficiaries may specifically enforce any covenant in this Deed of Trust or the Trustor's compliance with its warranties herein and may restrain and enjoin the breach or prospective breach of any such covenant or the noncompliance with any condition and Trustor waives any requirement of the posting of any bond in connection therewith. (m) General Creditors-Remedies. Beneficiaries shall have such other rights and remedies as are available under any statute or at law or in equity, generally, and the delineation of certain remedies in this Deed of Trust shall not be deemed in limitation thereof. ~u C~ G(1 art 29. Application of Sale Proceeds. After deducting all costs and expenses of Trustee and of this Deed of Trust, including cost of evidence of title and reasonable attorneys' fees in connection with sale, as above set forth, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof, not then repaid, with accrued interest at the rate of 10% per annum; all other sums then secured hereby; and the remainder, if any, to the Beneficiaries and any other person or persons legally entitled thereto. 30. Remedies Cumulative. No remedy herein conferred upon or reserved to Trustee or Beneficiaries is intended to be exclusive of any other remedy provided herein or under the Loan Agreement or the Promissory Note, or otherwise by law provided or permitted, or provided in any guaranty given in connection with the Loan, but each shall be cumulative and shall be in addition. to every other remedy. Every power or remedy given by this instrument to Trustee or Beneficiaries or to which either of them may be otherwise entitled, may be exercised concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiaries and either of them may pursue inconsistent remedies. 31. No Waiver. No waiver of any default or failure or delay to exercise any right or remedy by Beneficiaries shall operate as a waiver of any other default or of the same default in the future or a preclusion of any right or remedy with respect to the same or any other occurrence. 32. Marshaling. In case of a sale under this Deed of Trust, the Property, real, personal and mixed, may be sold in one parcel. Neither Trustee nor Beneficiaries shall be required to marshal Trustor's assets. 33. SUBMISSION TO JURISDICTION. 27 0 0 q CID co (A) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS DEED OF TRUST, (B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN LOS ANGELES COUNTY, CALIFORNIA, (C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN LOS ANGELES COUNTY, CALIFORNIA (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARIES TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TRUSTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT THE ADDRESS FOR NOTICES DESCRIBED HEREIN, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW). (B) TRUSTOR, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS DEED OF TRUST OR ANY CONDUCT, ACT OR OMISSION OF BEN