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HomeMy WebLinkAbout1994-07-19; City Council; 12790; Agreements Related To The Villas. . - Cl-f OF CARLSBAD AGREEMENTS RELATED TO CONSTRUCTION OF THE VILLAS AT EL CAMINO REAL AFFORDABLE HOUSING PROJECT DEPT. RED. WITHIN THE CITY LIMITS OF CARLSBAD. RECOMMENDED ACTION: SO /-+WL Adopt City Council Resolution No. 9Y-Aog to APPROVE “Ground Lease” between the City and the El Camino Villas Associates, of which Bridge Housing Corporation is the General Managing Partner, and the “Affordable Housing and Financial Reimbursement Agreement” between the City, Aviara Land Associates and El Camino Villas Associates as related to construction and operation of the Villas at El Camino Real Affordable Housing Project. ITEM EXPLANATION: Proiect Backqround On October 26, 1993, the City Council approved development of the Villas at El Camino Real Affordable Housing Project. The project is located west of El Camino Real, between Camino Vida Roble and Alga Road, in the southwest quadrant of the City. It consists of 344 affordable rental apartments. This project will assist Aviara Land Associates in meeting their inclusionary housing requirement for the Aviara Master Plan as well as provide additional units which could be used to satisfy the affordable housing requirements of other offsite developers. In addition to approving the site development plan, special use and hillside development permits and a zone change for the project, the City Council, together with the Housing and Redevelopment Commission, also considered financial assistance for the Villas at El Camino Real on October 26, 1993 and March 22, 1994. The Council and Commission authorized 1) acquisition of property by the City for the project; 2) guarantee of grading deposit with Redevelopment Set-Aside Funds; 3) fee deferrals to Certificate of Occupancy for all city-controlled fees; 4) construction and permanent financing loans not to exceed $2.9 million from the Redevelopment Agency, 5) the use of s500,OOOof project cash flow and/or proceeds from the sale of Affordable Housing Credits for reserves and guarantees as required by other financing sources, and 6) declared that the Park In-Lieu Fee was not applicable to the project based on existing surplus park dedication within the Southwest Quadrant by the Aviara Master Plan. Proiect Aqreements As a result of the actions taken by the City Council to approve property acquisition and other financial assistance for the Villas at El Camino Real Affordable Housing Project, the City must now enter into agreements with Aviara Land Associates and El Camino Villas Associates, the development partnership, to formalize the previously approved actions. Attached as exhibits for City Council review are the following agreements: 0 Ground Lease between City of Carlsbad and the El Camino Villas Associates - this agreement allows El Camino Villas Associates, in which Bridge Housing Corporation is the General Managing Partner, to lease property from the City on a long term (57 . Page 2 of AB# jd, 390 years) basis and to construct and operate 344 affordable housing rental units on the property consistent with the Redevelopment Agency’s Regulatory Agreement and requirements of the Low Income Housing Tax Credit Program. The lease payments shall be $150,000 per year or 30% of the surplus cash flow from project operation. As a note, these payments shall serve as “program income” to the City’s Community Development Block Grant (CDBG) program. Therefore, they will be available for reallocation to other CDBG-eligible projects at a future date. 0 Affordable Housing and Financial Reimbursement Agreement - this outlines the financial assistance provided or committed to the project by the City and Aviara Land Associates. It also indicates that Aviara Land Associates will receive credit for meeting its minimum lnclusionary Housing Requirement for the Aviara Master Plan with the execution of this agreement upon the closing of the project construction loan. The agreement establishes the distribution of proceeds from the sale of Affordable Housing Credits with Aviara Land Associates receiving up to $1 million of the proceeds after the City has recovered all of its investment into the project. Since the actual loans to the project are being provided through use of the Redevelopment Low and Moderate Income Housing Set-Aside and Tax Increment Funds, related loan and regulatory agreements/documents shall be submitted to the Housing and Redevelopment Commission for action under a separate agenda bill. These agreements include: First and Second Agency Loan Agreements with related Promissory Notes and Deeds of Trust as well as Agency Regulatory and Operating Deficit Guarantee Agreements for the project. It is important to note that the structure established for the proposed repayment of the Redevelopment Agency loans is based on cash flow projected to be generated from the housing project operations. The Redevelopment Agency and City of Carlsbad will ultimately receive 100% of the project cash flow through payments on a Ground Lease and the loans previously approved by the Housing and Redevelopment Commission; 30% of the cash flow will be designated for ground lease payments to the City and 70% of the cash flow is for loan payments to the Agency. It is staff’s recommendation that the City Council approve the “Ground Lease” and the “Affordable Housing and Financial Reimbursement Agreement” as related to the Villas at El Camino Real Affordable Housing Project. FISCAL IMPACT: By approving the Ground Lease between the City and the El Camino Villas Associates, the City will receive approximately $150,000 per year for 55 years in lease payments; this amount may be more or less in any given year based on project cash flow. Since the property acquisition was entirely financed through the City’s CDBG program, any rental income received shall serve as “program income” to the CDBG program. The City financial assistance provided to the project includes a deferral of approximately $3.4 million in City fees until Certificate of Occupancy, but all fees will be paid by the project. AB # /a; 790 Page 3 EXHIBITS: 1. City Council Resolution No. qq- 2 oc) approving the Ground Lease with El Camino Villas Associates and the Affordable Housing and Financial Reimbursement Agreement with Aviara Land Associates and El Camino Villas Associates. 2. Ground Lease for Villas at El Camino Real between City of Carlsbad and El Camino Villas Associates (on file in the City Clerk’s Office). 3. Affordable Housing and Financial Reimbursement Agreement between City of Carlsbad, Aviara Land Associates and El Camino Villas Associates (on file in the City Clerk’s Office). CITY COUNCIL RESOLUTION NO. 94-209 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA TO APPROVE A GROUND LEASE WITH EL CAMINO VILLAS ASSOCIATES AND AN AFFORDABLE HOUSING AND FINANCIAL REIMBURSEMENT AGREEMENT WITH AVIARA LAND ASSOCIATES AND EL CAMINO VILLAS ASSOCIATES. CASE NAME: THE VILLAS AT EL CAMINO REAL APN: 2 15-020-l 5 WHEREAS, on October 26, 1993 and March 22, 7994, the City Council approved the City’s financial assistance program for the Villas at El Camino Real Affordable Housing Project based on anticipated requirements of other financing sources and evaluation of the financial proforma for the project; and WHEREAS, the City of Carlsbad is prepared to formalize the previously approved actions to provide financial assistance to the Villas at El Car&no Real Affordable Housing Project within appropriate legal documents. NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. The above recitations are true and correct. 2. The City Council approves the Ground Lease between the City of Carlsbad and the El Camino Villas Associates which allows the development partnership to lease property from the City on a long term (57 years) basis and to construct and operate 344 affordable housing rental units on the property. 3. The City Council approves the Financial Assistance and Reimbursement Agreement between the ‘City of Carlsbad, Aviara Land Associates and El Camino Villas Associates which outlines the financial assistance to be provided by, or committed by, the City or Aviara Land Associates to the project. The agreement also indicates that Aviara Land Associates will receive credit for meeting its minimum lnclusionary Housing Requirement for the Aviara Master Plan upon execution of said agreement at closing of the project construction loan for the Villas at El Camino Real Affordable Housing Project. . . . . . . . . . . .a... I, r I * . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CC Resolution No. 94-209 Page 2 4. That the City Manager of the City of Carlsbad is authorized to execute said agreements in substantially the form presented to the City Council and with such modifications as the City Attorney deems necessary and appropriate, and all documents required to implement the provisions of the Ground Lease, including deeds of trust for the City’s fee interest in the property to Wells Fargo Bank, Great Western Savings, and other approved lenders under the Ground Lease. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad, California, held on the 19th day of JULY , 1994, by the following vote, to wit: AYES: Council Members Lewis, Stanton, Kulchin, Nygaard, Finnila NOES: None ABSENT: None ABSTAIN: None ATTEST: && ALETHA RAU July 29, 1994 .- TO: RON BALL, CITY A-ITORNEY FROM: City Clerk THE VILLAS AT EL CAMINO REAL AGREEMENTS - July 1?,1994 meeting Just a reminder. The City Council, at their meeting of July 19, 1994, adopted Resolution No. 94-209, approving a ground lease with El Camino Villas Associates, and an affordable housing and financial reimbursement agreement with Aviara Land Associates and El Can&o Villas Associates. That same night, the Housing & Redevelopment Commission adopted Resolution NO. 251, approving agreements for a construction loan and a permanent loan (also in connection with The Villas project). Copies of all documents were on file in the City Clerk’s Office. Following the Council meeting, I inquired whether the documents we had were correct and whether we should process them for signatures. You responded that you didn’t know if our documents were correct or not, and therefore, we should not process them for signatures. At that time, we agreed th.at my office would take no action with those agreements until we heard from you and/or your office. To date, I’ve heard nothing, and I just wanted to let you know I am still holding those documents and will do nothing until we hear from you. City Clerk lr EXHIBIT 2 GROUND LEASE FOR VILLAS AT EL CAMINO REAL AFFORDABLE HOUSING PROJECT GROUND LEASE By and Between THE CITY OF CARLSBAD and LA TERRAZA ASSOCIATES, a California Limited Partnership La Terraza Affordable Housing Development 1442cH.P50 07/l 3/94 . . , TABLE OF CONTENTS Page ARTICLE 1: DEFINITIONS ................. 1 1.1 Definitions .................... 1 ARTICLE 2: LEASE OF THE LAND; PAYMENT OF RENT; OWNERSHIP . OF IMPROVEMENTS ............... 2.1 Lease of the Land ................. 2.2 Term 2.3 Payment ifoR% 2.4 Title to Improvement; .......................................... 2.5 Assignment of Lesseels'Lea~ehoid'I&est; Transfer of the Development ............ 5 ARTICLE 3: DEVELOPMENT OF IMPROVEMENTS ......... 3.1 Commencement of Construction ........... 3.2 Completion of Construction 3.3 Construction Pursuant to Permits' .................. 3.4 Equal Opportunity ................. 3.5 Liens ....................... 3.6 Permits, Licenses and Easements .......... 3.7 Assurances by Lessee ............... ARTICLE 4: USE AND MAINTENANCE OF THE DEVELOPMENT .... 4.1 Use of Development 4.2 Maintenance of the D;?&lopment ........................ 4.3 Utilities 4.4 Taxes and Assessment: ................................. 4.5 Hazardous Materials ................ 4.6 Non-Discrimination .............. 4.7 Community Development Block Grant Requirements . . ARTICLE 5: AFFORDABILITY REQUIREMENTS ........... 5.1 Affordability Definitions ............. 5.2 Occupancy of Development ............. 5.3 Maximum Rental Charges .............. 8 8 9 9 9 10 12 12 14 14 15 15 ARTICLE 6: MORTGAGE APPROVED LOANS ............. 6.1 Loan Obligations 6.2 Liens and Encumbra&s'Aga&*L&&e~l~ IniereLt' . 16 16 in the Leasehold Estate .............. 6.3 Cost of Approved Loans to be Paid by Lessee .... 6.4 Proceeds of Approved Loans . 6.5 Subordination of Lessor's Fe;! IntereLt' ...... 6.6 Notice and Right to Cure Defaults Under Appr&d' . 16 20 20 20 Loans ....................... 21 ‘i 1442cH.P50 07/13/94 -i- ‘. m (continued) ARTICLE 7: INSURANCE.................... 22 7.1 Required Insurance Coverage . . . . . . . . . . . . 22 7.2 Insurance Policies and Premiums . . . . . . . . . . 23 7.3 Proceeds of Insurance . . . . . . . . . . . . . . . 23 7.4 Indemnification . . . . . . . . . . . . . . . . . . 23 ARTICLE 8: CONDEMNATION, DAMAGE OR DESTRUCTION OF THE DEVELOPMENT . . . . . . . . . . . . . . . . . 8.1 Condemnation . 8.2 Administration'of Cok&uction'Fund in'the'E;ent' . 24 24 of Condemnation, or Damage or Destruction of Development . . . . . . . . . . . . . . . . . . . . 8.3 Lessee, Lessor, Approved Lenders to be Made Parties in Legal Proceedings . . . . . . . . . . . 8.4 Termination . . . . . . . . . . . . . . . . . . . . 27 27 28 ARTICLE 9: ASSURANCES OF LESSOR 9.1 Lessor to Give Peaceful Pokks&' . . . . . . . . . 9.2 Lessor to Lease Development with Marieiah;! !i?iili . 9.3 Lessor to Obtain Necessary Governmental Approvals . 9.4 Release of Lessor . . . . . . . . . . . . . . . 9.5 Encumbrance by Lesior . . . . . . . . . . . . . . . 28 28 28 28 29 29 ARTICLE 10: DEFAULTS AND REMEDIES . . . . . . . . . . . 10.1 Events of Default; Remedy for Default by Lessee . . 10.2 Remedy for Default by Lessor . . . . . . . . . . . 29 29 31 ARTICLE 11: 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 MISCELLANEOUS Instrument Is E&k;! Agreement .................. Notices Limited P&&'&ent ......................... Force Majeure ................. Recording Non-Waiver Af'Breach .............. Effective Date; Count&a% .................... Lease Binding on Successors .......... Relationship of Parties ............ No Merger Gender and I;\ll;lb&' .............................. Titles ..................... Severability .................. Applicable Law ................. 31 31 31 32 32 33 33 33 33 34 34' 34 34 34 35 1442cH.PSO 07/13/94 -ii- ‘. - GROUND LEASE 4 THIS GROUND LEASE (@'Lease"), is entered into as of 1994, by and between the City of Carlsbad, a municipal &oration ("Lessor") and La Terraza Associates, a California Limited Partnership ("Lessee"). c RECITALS A. The City owns certain real property situated in the City of Carlsbad, County of San Diego, which is more particularly described in Exhibit A attached hereto (the "Property"). B. The City has entered into an Option to Lease Agreement dated April 13, 1994 (the 810ption Agreement") with the Lessee, pursuant to which this Lease is executed. c. The Lessee has agreed to develop on the Property a multifamily housing development consisting of three hundred forty-four residential units (the "Improvements"), which Improvements will be owned in fee by the Lessee. D. The City desires to lease the Property to the Lessee for a period of fifty-seven (57) years pursuant to the terms of this Lease. NOW, THEREFORE, in consideration of the promises and the respective covenants and agreements contained in this Lease, the parties hereby agree as follows: ARTICLE 1: DEFINITIONS 1.1 Definitions The following terms shall have the following meanings in this Lease: (3 "Affordability Requirements" shall mean the Lessor's requirements pursuant to Article 5 of this Lease. (b) 88Approved Lenders" shall mean each and all of the lenders providing the Approved Loans to Lessee. (‘=I "Approved Loans" shall mean the loans described in Section 6.2(a) below, any loan refinancing a loan described in Section 6.2(a) below, additional loans not to exceed one million 1442cH.P50 07/13/94 -l- , - dollars ($l,OOO,OOO), or such other loans approved in writing by the Lessor, now or hereafter obtained by Lessee in connection with the Development, as evidenced by promissory notes and secured by deeds of trust (and any related security documents, including security agreements, fixture filings, and financing statements required of the Lessee) which are given by the Lessee. (d) "Approved Loan Documents I1 shall mean all documents executed by the Lessee evidencing or securing the Approved Loans. W wwAuthorized Officersww shall mean, in the case of the Lessor, the City Manager, and in the case of the Lessee, its Managing General Partner. (f) wwDevelopmentww shall mean the Improvements and the Lessee's leasehold interest in the Land. (9) "Dwelling Units" shall mean the three hundred and forty-four (344) units of rental housing, which shall be occupied by the Tenants and by one or more resident managers. (h) wwForeclosure Transferee" shall have the definition set forth in Section 2.3(b) hereof. (i) wwImprovementsww shall mean the buildings, structures and other improvements, including the building fixtures therein, now or hereafter located on the Land. 0) wwLandww shall mean the land, more fully described in Exhibit A attached to this Lease and incorporated into this Lease by this reference. (k) wwLeaseww shall mean this Ground Lease between the Lessor and the Lessee and shall include any and all amendments made to this Lease. (1) "Lease Termww shall mean the fifty-seven (57) year period set forth in Section 2.2 below, during which this Lease shall be in effect unless earlier terminated in accordance with the provisions of this Lease. ON "Lease Year" shall mean a period of one calendar year beginning January 1 and ending December 31. The first lease year shall commence on the date of this Lease and end on the last day of the following December. The last lease year shall begin on January 1 of that year and end on the last day of this Lease. 1442cH.PSO 07/ 13/94 -2- .- 00 wwLesseen shall mean La Terraza Associates, a California Limited Partnership, and its permitted successors and permitted assigns. (0) wwLessorww shall mean the City of Carlsbad, and its successors and assigns. r (P) "Partnership Agreement" shall mean the Limited Partnership Agreement of Lessee, as amended from time to time. ta wwSurplus Cash" shall have the meaning set forth in Section 2.3(b) O-1 nTenantsww shall mean the residents who are authorized by Lessee to occupy the Dwelling Units. ARTICLE 2: &'L IMPROVEMENTS The Lessor, for and in consideration of the covenants and agreements to be kept and performed by the Lessee, leases the Land to the Lessee, and in consideration thereof, the Lessee does take, hire and lease the Land from the Lessor pursuant to the terms of this Lease. The Lessee or its designee shall operate the Development in compliance with applicable laws. 2.2 Term The term of this Lease shall commence on the date of this Lease as set forth above and shall continue from such date until the expiration of fifty-seven (57) years, unless earlier terminated in accordance with this Lease. 2.3 Pavment of Rent (a) The Lessee shall pay to the Lessor, at City Hall, 1200 Carlsbad Village Drive, Carlsbad, CA 92008, or such other place as Lessor may designate in writing, wwRentww in an annual amount equal to One Hundred and Fifty Thousand Dollars ($150,000), without abatement, deduction or offset (except as otherwise provided in this Lease), payable in arrears on the first day of the second month following the close of each Lease Year, subject to subsections (b) and (c) below. (b) The first payment of Rent shall be equal to the Rent multiplied by a fraction, the numerator of which is the number of 1442cH.PSO 07/l 3/w -3- . days from the date of this Lease through the end of the first Lease Year and the denominator of which is 365. The final payment of Rent under this Lease shall be prorated in a similar manner. Subject to subsection (c), Rent shall be payable only to the extent of thirty percent (30%) of Surplus Cash. wwSurplus Cash" shall mean operating income of the Development (excluding interest income earned on tenant security deposits and Development reserve accounts) less reasonable operating expenses. For this purpose, operating expenses shall include all costs and expenses related to ownership and operation of the Development including, but not limited to, deposits into reserves, taxes and other similar charges, the partnership management fee in an amount not to exceed twenty thousand dollars ($20,000), debt service currently due on the Approved Loans (excluding the loans from the Redevelopment Agency of the City of Carlsbad), the property management fee and other expenses of a property manager in amounts reasonable and customary in the industry, but shall not include any allowance for depreciation. In the event the thirty percent (30%) of Surplus Cash available to pay the Rent is less than the amount of Rent due under this Lease in any year, the difference between thirty percent (30%) of Surplus Cash and the Rent shall accrue with interest at percent ( %) compounded annually, and shall be paid when and to the extent Surplus Cash becomes available. All payments of Rent shall be applied first to accrued amounts due for prior years, then to accrued interest from that year, and then to current Rent due, beginning with the first year Rent accrued. Any Rent outstanding shall be payable on the earlier of the sale of the Improvements (in full), Refinancing (as defined below) of the Improvements (to the extent of available cash) or termination of this Lease (in full). wwRefinancingww shall mean the repayment of any Approved Loan by the proceeds of a new loan secured by the Development. After a sale, Rent shall be due currently on an annual basis on the date set forth in subsection (a) above. Notwithstanding anything to the contrary, (i) if the sale is due to a judicial foreclosure, nonjudicial foreclosure or deed-in-lieu of _ I foreclosure which does not terminate this Lease or (ii) the Lease terminates in accordance with Section 6.2(c)(9) due to a judicial foreclosure, nonjudicial foreclosure, or deed-in-lieu of foreclosure, then the Lender or other transferee of the Development (a wwForeclosure Transferee") and its successors and assigns shall have no liability for the payment of any Rent which accrued prior to such transfer, and thereafter Lessor shall have no right to terminate this Lease on account of nonpayment of such accrued Rent. (c) Notwithstanding the provisions of section (b), irrespective of the existence of Surplus Cash, accrued Rent for 1442cH.PSO 07/l 3/94 -4- any year shall be paid in full not later than the tenth anniversary of the date such Rent accrued. (d) Lessor agrees that Lessee may prepay the Rent at any time in its discretion. 2.4 Title to Imnrovements Lessor hereby grants to Lessee, without warranty express or implied, any right, title, or interest that Lessor may have in the Improvements now or hereafter located on the Land. Improvements on the Land during the Lease Term shall be and remain the property of Lessee; provided, however, that Lessee shall have no right to destroy, demolish or remove the Improvements except as specifically provided for in this Lease or as approved in writing by Lessor. When the Lease Term expires or, subject to applicable cure rights of Lenders and limited partners of Lessee, when the Lease is otherwise terminated under the terms of this Lease, title to the Improvements shall revert to and vest in Lessor without cost to Lessor. It is the intent of the parties hereto that this Lease shall create a constructive notice of severance of the Improvements from the Land without the necessity of a deed from Lessor to Lessee after the Improvements have been constructed. The Improvements, when built, shall be and remain real property and shall be owned in fee by the Lessee for the Lease Term. Lessee agrees to execute, at the request of Lessor at the end of the Lease Term, within ten (10) days of Lessor's written request, a confirmatory quitclaim deed of the Improvements to Lessor to be recorded at Lessor's option and expense and any other documents that may be reasonably required by Lessor or Lessor's title company to provide Lessor title to the Land and the Improvements free and clear of all monetary liens and monetary encumbrances not caused or agreed to by Lessor. 2.5 Assianment of Lessee's Leasehold Interest; Transfer of the Develonment The Lessee may at any time and from time to time assign its interest in this Lease and sell or transfer the Development in accordance with the provisions of the Partnership Agreement and any Approved Loan Documents applicable to the Development, but only with the written consent of the Lessor, which consent shall be granted by the Agency if the Agency reasonably determines that the transferee has the ability to pay the Rent due hereunder, taking into account income available to pay Rent from the Development, that the transferee has the capacity and experience necessary to properly operate a three hundred and forty-four (344) unit affordable housing development, and that the 144zcH.PSO 07/l 3/94 -5- : _, l ’ . 1 . . transferee has a good reputation in the community for proper operation and maintenance of developments. Notwithstanding the above, the following transfers shall not require the consent of the Lessor: (i) any transfer of Lessee's interest in this Lease and the Development to an Approved Lender; (ii) any transfer of Lessee's interest in the Lease and the Development to a Foreclosure Transferee, and one further transfer of Lessee's interest in this Lease and the Development by a Foreclosure Transferee, and (iii) any transfer of Lessee's interest in this Lease and the Development to BRIDGE Housing Corporation or a nonprofit affiliate of BRIDGE Housing Corporation. ARTICLE 3: DEVELOPMENT OF IMPROVEMENTS 3.1 Commencement of Construction Subject to Section 11.4 below, the Lessee shall commence construction of the Improvements within one hundred twenty (120) days after the date a memorandum of this Lease is recorded in the Official Records of San Diego County, unless such date is extended by the City Manager in the reasonable exercise of his or her discretion. 3.2 Comnletion of Construction The Lessee shall prosecute diligently to completion the construction of the Improvements, and shall complete construction within ( ) months of commencement of construction of the Improvements, subject to Section 11.4 below. 3.3 Construction Pursuant to Permits The Improvements shall be constructed in accordance with the terms and conditions of the City's land use permits and approvals and building permits. 3.4 Euual Onnortunitv During the construction of the Improvements there shall be no discrimination on the basis of race, color, creed, religion, sex, sexual orientation, age, disability, marital status, national origin or ancestry in the hiring, firing, promoting or demoting of any person engaged in the construction work. 3.5 Liens Subject to subsection 4.4(d), the Lessee covenants and agrees promptly to pay all sums legally due and payable by the 1442cH.P50 07/l 3/94 -6- . - Lessee on account of any labor performed or materials supplied for the Development on which any lien is or can be legally asserted against the Lessee's leasehold interest in the Property. In the event any mechanics @ or materialmen's lien is filed against the Development, subject to subsection 4.4(d), the Lessee at its expense shall promptly cause such lien to be removed by bonding or otherwise, and the Lessee shall hold the City harmless from any and all such asserted claims or liens. 3.6 Permits, Licenses and Easements The City agrees that, within ten (10) days after receipt of written request from the Lessee, it shall (at no expense to the City) join in any and all applications for permits, licenses or other authorizations required by any governmental or other body claiming jurisdiction in connection with any work the Lessee may do pursuant to this Lease or the operation of the Development, and shall also join in any grants of easements for public utilities useful or necessary to the proper construction of the Improvements or the operation of the Development. 3.7 Assurances bv Lessee Lessee agrees that it shall not cause the building permit or other governmental permits and entitlements necessary to construct the Development to be amended to permit Lessee to construct less than three hundred and thirty (330) housing units on the Land, and Lessee agree to construct not less than three hundred and thirty (330) housing units on the Land. Lessee acknowledges that the construction of affordable housing units on the Land in excess of one hundred and sixty (160) units will generate affordable housing credits available for sale by the City to developers that seek to satisfy affordable housing inclusionary requirements within the City (the *@Affordable Housing Credits"). Lessee further acknowledges and agrees that the City alone shall be entitled to sell the Affordable Housing Credits, and that the Lessee shall have no claim whatsoever on the Affordable Housing Credits, and Lessee covenants and agrees to make no such claim. Aviara Land Associates, a California Limited Partnership shall be a third party beneficiary of this Section 3.7 (and no other provision) of this Lease, with full rights to enforce the provisions of this Section 3.7, including the right of specific enforcement. 1442CH.PSO 07/l 3/94 -7- ARTICLE 4: USE AND MAINTENANCE OF THE DEVELOPMENT 4.1 Use of Develonment The Lessee shall at all times during the Lease Term use or cause the Development to be used for the purposes.set forth in this Lease, consistent with all applicable zoning and environmental laws of any governmental authority having jurisdiction over the Development, and with all requirements of Approved Lenders. Lessee agrees to comply with all applicable and lawful statutes, rules, orders, ordinances, requirements and regulations of the United States, the State of California, and of any other governmental authority having jurisdiction over the Development; provided, however, that Lessee may, in good faith and on reasonable grounds, dispute the applicability of, or the validity of any charge, complaint or action taken pursuant to or under color of, any statute, rule, order, ordinance, requirement or regulation, defend against the same, and in good faith diligently conduct any necessary proceedings to prevent and avoid any adverse consequence of the same. Lessee agrees that any such contest shall be prosecuted to a final conclusion as speedily as reasonably possible. The Lessee agrees: (a) not to use the Development for any disorderly or unlawful purpose, but only to provide proper housing facilities and ancillary uses to Tenants, and to maintain the character of the Development as required by the Affordability Requirements, the Partnership Agreement, and any Approved Loan Documents, for so long as such agreements remain in effect; (b) to use best efforts, taking into account what is commercially reasonable, including but not limited to seeking legal or equitable relief, where appropriate, to prevent any Tenant from committing or maintaining any nuisance or unlawful conduct on or about the Development; (c) to use best efforts, taking into account what is commercially reasonable, to prevent any Tenant from violating any of the covenants and conditions of this Lease with respect to the Development; (d) to use best efforts, taking into account what is commercially reasonable, if necessary, to abate any violation of this Lease by any Tenant upon notice from the Lessor; and W subject to any applicable laws of the State of California and the rights of Tenants, to permit the Lessor and its agents to inspect the Development or any part thereof at any reasonable time during the Lease Term. 1442cH.PSO 07/l 304 -8- -1 ’ ’ 1 . . - 4.2 Baintenance of the DeVe~OD~ent Subject to Sections 7.3, 8.1 and 8.2, during the term of this Lease, the Lessee shall perform, or cause to be performed, all maintenance and repairs necessary to maintain the Development in good repair and tenantable condition. The Lessor shall have the right, upon reasonable notice to the Lessee, and subject to the rights of Tenants, to enter the Development to make inspections to determine Lessee's compliance with this Section. 4.3 Utilities The Lessee shall be responsible for the cost of all utilities, including water, heat, gas, electricity, waste removal, sewers, and other utilities or services supplied to the Development and, subject to Section 4.4(d), the Lessee shall pay or cause same to be paid currently and as due. 4.4 Taxes and Assessments (a) Pavment of Taxes and Assessments. The Lessee covenants and agrees during the entire Lease Term, at its own cost and expense, to pay the public officers charged with their collection, as the same become due and payable and before any fine, penalty, interest, or other charge may be added to them for nonpayment, all real estate taxes, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind and nature, made, assessed, levied or imposed upon, or due and payable in connection with, or which become a lien upon, the Land, the Improvements, or any part of the Land or Improvements, or upon the Lessee's leasehold interest in the Land pursuant to this Lease, as well as assessments for sidewalks, streets, sewers, water, or any other public improvements and any other improvements or benefits which shall, during the Lease Term, be made, assessed, levied, or imposed upon or become due and payable in connection with, or a lien upon the Land, the Improvements, or any part of the Land or Improvements, or upon the Lessee's leasehold interest in the Land pursuant to this Lease. (b) Pavment of Fees. The Lessee covenants and agrees during the entire Lease Term, at its own cost and expense, to pay, as the same become due and payable and before any fine, penalty, interest or other charge may be added to them for nonpayment, license and permit fees, charges for public utilities of any kind, and any and all governmental charges relating to the use or occupancy of the Improvements. 1442cH.PSO 07/l 3/94 -9- ,- (c) Conies of Notices to Lessee. The Lessor agrees promptly to send to the Lessee copies of any and all notices received by it in respect to any taxes, assessments, charges or fees for which the Lessee is liable pursuant to this Section 4.4. (d) Ttesseels Riaht to Contest. If the Lessee disputes any amount or validity of any liens, taxes, assessments, charges, penalties or claims, including liens or claims of materialmen, mechanics or laborers, upon the Land or the Improvements, the Lessee may contest and defend against the same at its cost, and in good faith diligently conduct any necessary proceedings in connection therewith to prevent and avoid the same; provided, however, that such contest shall be prosecuted to a final conclusion as speedily as possible. During any such contest, the Lessee shall (by the payment of such disputed taxes, assessments or charges, if necessary) prevent any advertisement of tax sale, any foreclosure of, or any divesting thereby of the Lessor's title, reversion or other interest in or to the Land and Improvements. 4.5 Hazardous (a) Definitions. The following special definitions shall apply for the purposes of this Section 4.5: (i) llHazardous Materials" shall mean: (A) any llhazardous substance" as defined in Section lOl(14) of CERCLA (42 U.S.C. Section 9601(14)) or Section 25281(d) or 25316 of the California Health and Safety Code at such time; (B) any *@hazardous waste," llinfectious waste" or llhazardous material I1 as defined in Section 25117, 25117.5 or 25501(j) of the California Health and Safety Code at such time; (C) any other waste, substance or material designated or regulated in any way as lltoxicll or llhazardousll in the RCRA (42 U.S.C. Section 6901 & sea-) I CERCLA Federal Water Pollution Control Act (33 U.S.C. Section 1521 & m.), Safe Drinking Water Act (42 U.S.C. Section 3000 (f) & sea.), Toxic Substances Control Act (15 U.S.C. Section 2601 & sea.), Clean Air Act (42 U.S.C. Section 7401 & sea.), California Health and Safety Code (Section 25100 & sea., Section 3900 & sea.), or California Water Code (Section 1300 & sea.) at such time; and 1442cH.P50 07/l 3/94 -lO- (D) any additional wastes, substances or material which at such time are classified, considered or regulated as hazardous or toxic under any other present or future environmental or other similar laws relating to the Development. c (ii) llHazardous Materials Laws" means all federal, state, and local laws, ordinances, regulations, orders and directives pertaining to Hazardous Materials in, on or under the Development or any portion thereof. (b) Certain Covenants and Aareements. The Lessee hereby covenants and agrees as follows: (i) The Lessee shall not knowingly permit the Development or any portion thereof to be a site for the use, generation, treatment, manufacture, storage, disposal or transportation of Hazardous Materials or otherwise knowingly permit the presence of Hazardous Materials in, on or under the Project; provided however that, for the purposes of this subsection (b)(i) only, the term llHazardous Materials" shall not include the following (which shall hereinafter be referred to as the "Excluded Hazardous Materials"): construction materials in reasonable quantities for lawful use in the construction of the Improvements; reasonable quantities of gardening materials, household products, office supply products or janitorial supply products of the type customarily used in the construction, maintenance, rehabilitation, or associated with buildings and grounds, or typically used in household activities, in a manner typical of other residential housing developments which are comparable to the Improvements; certain substances which may contain chemicals listed by the State of California pursuant to Health aPQ3 Draft Printer - JEB - 6/18HPLAII2.PRSItion living within the region of the Development, including, but not limited to, alcoholic beverages, aspirin, tobacco products, nutrasweet and saccharine. (ii) The Lessee shall keep and maintain the Development and each portion thereof in compliance with, and shall not cause or permit the Development or any portion thereof to be in violation of, any Hazardous Materials Laws; (iii) Upon receiving actual knowledge of the following, the Lessee shall immediately advise the Lessor in writing of: (A) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against the Lessee or the Development pursuant to 144xH.P50 07/13/94 -ll- any applicable Hazardous Materials Laws; (B) any and all claims made or threatened by any third party against the Lessee or the Development relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in the foregoing clause (A) and this clause (B) are hereinafter referred to as llHazardous Materials Claims"); (C) the presence of any Hazardous Materials in, on or under the Development other than Excluded Hazardous Materials; or (D) the Lessee's discovery of any Hazardous Materials, except the discovery of any Excluded Hazardous Materials, on any real property adjoining or in the vicinity of the Development, which Lessee reasonably believes may impact the Development. The Lessor shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims. (iv) Without the Lessor's prior written consent, which shall not be unreasonably withheld, the Lessee shall not take any remedial action in response to the presence of any Hazardous Materials on, under, or about the Development (other than in emergency situations or as required by governmental agencies having jurisdiction), nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Materials Claims. 4.6 Non-Discrimination The Lessee or its designee shall not, in the selection or approval of Tenants or provision of services or in any other matter, discriminate against any person or group of persons on the grounds of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, age, or disability. 4.7 Community Development Block Grant Reauirements Lessee shall comply with all applicable laws and regulations governing the use of funds as set forth in 24 CFR 570 & m., including (but not limited to) the following requirements, to the extent applicable: (a) Environment and HistoricPreservation. Section 104(f) of the Housing and Community Development Act of 1974 and 24 CFR Part 58 that prescribe procedures for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4361), and the additional laws and authorities listed at 24 CFR 58.5. 1442m.PSO 07/l 3/w -12- (b) Annlicabilitv of OMB Circulars. The policies, guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110 and A-122, as they relate to the acceptance and use of Community Development Block Grant funds. (c) Architectural Barriers. The requirements of the Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157). . (d) Lead-Based Paint. The requirement of the Lead-Based Paint Poisoning Prevention Act, as amended (42 U.S.C. 4821 & sea.) and implementing regulations at 24 CFR Part 35. (e) Relocation. The requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, and similar state laws. (f) Ha dica 1. The requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 706), and federal regulations issued pursuant thereto, which prohibit discrimination against the handicapped in any federally assisted program. (g) Trainina Onoortunities. The requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C. 1701), requiring that to the greatest extent feasible opportunities for training and employment be given to lower income residents of the project area and agreements for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in, the areas of the project. The Lessee shall include the following language in all contracts executed under this Lease: 'IThe work to be performed under this agreement is a project assisted under a program providing direct federal financial assistance from the United States Department of Housing and Urban Development (VIUD1l) and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701. Section 3 requires that to the greatest extent feasible opportunities for training and employment be given to lower income residents of the project area and agreements for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in, the areas of the project." (h) HUD Reaulations. Any other HUD regulations present or as may be amended, added, or waived in the future pertaining to Community Development Block Grant Funds, including but not limited to HUD regulations as may be promulgated regarding subrecipients. 1442cxP50 07/13/94 -13- ARTICLE 5: AFFORDABILITY REOUIREMENTS 5.1 Affordabilitv Definitions The following terms shall have the following meanings as used in this Article 5: (a) "Area Median Income I1 means the median income for the San Diego Primary Metropolitan Statistical Area (llPMSAA1), with adjustments for household size, as determined from time to time by the United States Department of Housing and Urban Development (@'HUD") pursuant to the United States Housing Act of 1937, as amended. If HUD no longer publishes such income determinations, the Lessee shall use the median income for San Diego County as published by the California Department of Housing and Community Development (llHCD1l). If HCD no longer publishes such income determinations, the Lessee shall calculate median income in a manner consistent with the methods previously used by HUD. (b) "Low Income Household11 means a household whose annual gross income does not exceed the qualifying limits, adjusted for household size and other factors, for a lower income household for the San Diego PMSA, as determined from time to time by HUD pursuant to the United States Housing Act of 1937, as amended. If HUD no longer publishes such income determinations, the Lessee shall use the lower income determination for San Diego County as published by HCD. If HCD no longer publishes such income determinations, the Lessee shall calculate lower income in a manner consistent with the methods previously used by HUD. (‘=I "Moderate Income Household11 means a household whose annual gross income does not exceed the qualifying limits, adjusted for household size and other factors, for a moderate income household (120% of median income) as determined from time to time by HCD for San Diego County. If HCD no longer publishes such income determinations, the Agency shall calculate moderate income in a manner consistent with the methods previously used by HCD. (d) llRentll shall mean the total of monthly payments by the tenants of a Dwelling Unit for the following: use and occupancy of the Dwelling Unit and associated facilities, including parking; any separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits; the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service; any other interest, taxes, fees 1442CH.PSO 07/13/94 -14- or charges for use of the Dwelling Unit or associated facilities and assessed by a public or private entity other than owner, and paid by the tenant. 5.2 Occunancv of Develonment. The Developer shall limit for the full Lease Term the rental of one hundred sixty (160) Units to households whose incomes at initial occupancy do not exceed the income limits for Low Income Households. The Developer shall limit for the full Lease Term the rental of the remaining Units to households whose incomes at initial occupancy do not exceed the income limits for Moderate Income Households, excluding - (- ) units for resident managers. 5.3 Maximum Rental Charaes (a) The total charges for Rent to Low Income Households shall not exceed the lesser of: (i) the applicable low income housing tax credit rent; or (ii) one-twelfth of thirty percent (30%) of sixty percent (60%) of Area Median Income, adjusted for assumed household size pursuant to subsection (c) below; provided, however, for Low Income Households whose gross income, upon annual income recertification, exceeds sixty percent (60%) of Area Median Income, the Developer may charge Rent equal to the lesser or (i) the applicable low income housing tax credit rent; or (ii) thirty percent (30%) of the gross income of the household, adjusted for household size pursuant to subsection (c) below. In the event a Low Income Householdls gross income, upon annual recertification, exceeds the maximum income for a Low Income Household, the Developer shall rent the next available Unit to a Low Income Household and may charge the over-income household a rent comparable to the rent which may be charged for a Moderate Income Household Unit. (b) The total charges for Rent to Moderate Income Households shall not exceed one-twelfth of thirty percent (30%) of one hundred ten percent (110%) of Area Median Income, adjusted for assumed household size pursuant to subsection (c) below. For Moderate Income Households whose gross income, upon annual recertification, exceeds one hundred ten percent (110%) of Area Median Income, the Developer may charge a Rent equal to thirty percent (30%) of the gross income of the household. In the event ., a Moderate Income Household's gross income, upon annual recertification, exceeds the maximum income for a Moderate Income '. Household, the Developer shall not be required to terminate the tenancy of the over-income household and shall not be restricted in the rent charged to the over-income household so long as the 1442aLP50 07/13/94 -15- over-income household otherwise remains a tenant in good standing in the Development. (c) In calculating the allowable Rent for the Units, the Developer shall use the occupancy per unit assumptions used by the California Tax Credit Allocation Committee ('*TCAC") for so long as the Development is subject to a TCAC regulatory agreement; and if the Development is no longer subject to a TCAC regulatory agreement, the Developer shall use the occupancy per unit assumption of one more occupant per unit than the number of bedrooms in the unit. In no case, however, shall the Developer be required by this Lease to use occupancy per unit assumptions which would cause the Developer to be in violation of any regulatory agreement recorded against the Property by any federal or state government agency or any lender. ARTICLE 6: MORTGAGE APPROVED LOANS 6.1 Loan Obliaations Nothing contained in this Lease shall relieve Lessee of its obligations and responsibilities under any Approved Loans to operate the Development as set forth therein. 6.2 c Interest in the Leasehold Estate (a) Lessee shall have the right to encumber, without the consent of Lessor, the leasehold estate created by this Lease and the Improvements with the following: W a deed of trust securing a construction loan for the Development from a private lender in an amount not to exceed Twenty-Six Million Five Hundred Thousand Dollars ($26,500,000); (ii) deed(s) of trust securing permanent loans for the Development from one or more private lenders in a total amount not to exceed Nine Million Five Hundred Thousand Dollars ($9,500,000); (iii) a deed of trust securing a construction and permanent loan for the Development from the Redevelopment Agency of the City of Carlsbad in an amount not to exceed One Million Seven Hundred Twelve Thousand Dollars ($1,712,00); :-.: . (iv) a deed of trust securty a construction and permenant loan for the Development from the Redevelopment Agency ' 1442cH.PSO 07/l 3194 -16- . . of the City of Carlsbad in an amount not to exceed Five Hundred Thousand Dollars ($500,000); (v) Regulatory Agreements of Approved Lenders and of the California Tax Credit Allocation Committee. . (b) Lessee shall not have the right, without Lessor's consent, to encumber Lessor's interest in the Land or Lessor's reversionary interest in the Improvements. If Lessor so consents, Lessor's liability under such loan shall be limited to Lessor's property which is security for the loan and Lessor shall not be personally liable for repayment of such loan. (c) For as long as there is any lien securing any Approved Loans: (1) Lessor shall not agree to any mutual termination or accept any surrender of this Lease, nor shall Lessor consent to any amendment or modification of this Lease without prior written consent of Approved Lenders which have an outstanding Approved Loan. (2) Notwithstanding any default by Lessee under this Lease, Lessor shall have no right to terminate this Lease unless Lessor shall have given Approved Lenders which have an outstanding Approved Loan written notice of such default pursuant to the requirement of Sections 6.2(c)(7) and 11.2 and such Approved Lenders shall have failed to remedy such default or acquire Lessee's leasehold estate created by this Lease or commence foreclosure or other appropriate proceedings as set forth in, and within the time specified by, this Section 6.2(c)(2). In the event that Lessor receives competing or conflicting offers to cure any default, Lessor shall accept the offers to cure in the following order: first, the Lessee or the limited partner therein, then each Approved Lender in the same relative priority as their respective deeds of trust or mortgages. (3) Any Approved Lender which has an outstanding Approved Loan shall have the right, but not the obligation, at any time to pay any or all of the rental due pursuant to the terms of this Lease, and do any other act or thing required of Lessee by the terms of this Lease, to prevent termination of this Lease. Each Approved Lender shall have ninety (90) days after receipt of notice from Lessor describing such default to cure the default. All payments so made and all things so done shall be as effective to prevent a termination of this Lease as the same would have -. ,.. , 1442CH.PSO 07/l 3/94 -17- been if made and performed by Lessee instead of by Approved Lender(s). (4) In addition to the cure period provided in paragraph (3) above, if the default is such that possession of the Development may be reasonably necessary to remedy the default, any Approved Lender which has an outstanding Approved Loan shall have a reasonable time after the expiration of such ninety (90) day period within which to remedy such default, provided that (i) such Approved Lender shall have fully cured any default in the payment of any monetary obligations of Lessee under this Lease within such ninety (90) day period and shall continue to pay currently such monetary obligations when the same are due, (ii) such Approved Lender shall have acquired Lessee's leasehold estate hereunder or commenced foreclosure or other appropriate proceedings prior to or within such period, and shall be diligently prosecuting the same; and (iii) after gaining possession of the Development, the Approved Lender shall have cured all non-monetary defaults capable of cure by the Approved Lender and performed all obligation of Lessee capable of performance by the Approved Lender when the obligations are due. (5) Any default under this Lease which by its nature cannot be remedied by any Approved Lender shall be deemed to be remedied if (i) within ninety (90) days after receiving written notice from Lessor describing the default, or prior thereto, any Approved Lender shall have acquired Lessee's leasehold estate or commenced foreclosure or other appropriate proceedings, (ii) the Approved Lender shall diligently prosecute any such proceedings to completion, (iii) the Approved Lender shall have fully cured any default in the payment of any monetary obligations of Lessee hereunder which does not require possession of the Development, and (iv) after gaining possession of the Development, the Approved Lender shall perform all other obligations of Lessee hereunder capable of performance by the Approved Lender when the obligations are due. (6) If Approved Lenders are prohibited, stayed or enjoined by any bankruptcy, insolvency or other judicial proceedings involving Lessee from commencing or prosecuting foreclosure or other appropriate proceedings, the times specified for commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of such prohibition; provided that any Approved Lender shall have fully cured any default in the payment of any monetary obligations of Lessee under this Lease and shall continue to 1442cH.P50 07/l 3/94 -18- . pay currently such monetary obligations when the same fall due; provided, further, that such Approved Lender shall not interfere with Lessor's efforts to seek compliance by the Lessee with any non-monetary obligation under this Lease. (7) Lessor shall mail or deliver to any Approved Lenders which have any outstanding Approved Loan a duplicate copy of all notices which Lessor may from time to time give to Lessee pursuant to this Lease. No notice by Lessor to Lessee hereunder shall be effective unless and until a copy of the notice shall have been mailed or delivered to such Approved Lenders as set forth in this Section 6.2(c)(7). All notices delivered by Lessor to any Approved Lenders shall also comply with the notice provisions of Section 11.2. (8) In the event any Foreclosure Transferee becomes Lessee under this Lease by means of foreclosure or deed in lieu of foreclosure or pursuant to any new lease obtained under subsection (9) below, that Foreclosure Transferee shall be personally liable under this Lease or such new lease only for the period of time that Foreclosure Transferee remains lessee thereunder. Nothing in this Section shall be construed to obligate any Foreclosure Transferee to remedy any default of Lessee, and any failure of any Approved Lender to complete any such cure after commencing the same shall not give rise to any liability of any Approved Lender to Lessor or Lessee. (9) In the event a Foreclosure Transferee becomes the legal owner of the leasehold estate, and upon written request by Foreclosure Transferee given within sixty (60) '.,2: days after becoming the legal owner of the leasehold estate, Lessor shall enter into a new lease of the Land with the Foreclosure Transferee for the remainder of the Lease Term with the same agreements, covenants, reversionary interests and conditions (except for any requirements which have been fulfilled by Lessee prior to termination) as are contained in this Lease and with priority equal to this Lease; provided, however, that the Foreclosure Transferee shall promptly cure any defaults by Lessee susceptible to cure by the Foreclosure Transferee. (10) Any limited partners of Lessee shall have the same rights as any Approved Lender authorized under paragraphs (2), (3) and (7) of this Section 6.2(c) of this Lease and any reference to a Approved Lender in paragraphs (2), (3) and (7) of this Section 6.2(c) shall be deemed to include ,, such limited partners. 1442cH.P50 07/ 13/94 -19- (11) Lessor shall cooperate in including in this Lease by suitable amendment from time to time any provision which may reasonably be requested by any proposed leasehold mortgagee for the purpose of implementing the mortgagee- protection provisions contained in this Lease and allowing such leasehold mortgagee reasonable means to protect or preserve the lien of the leasehold mortgage and the value of its security. Lessor agrees to execute and deliver (and to acknowledge, if necessary, for recording purposes) any agreement necessary to effect any such amendment; provided, however, that any such amendment shall not in any way affect the Lease Term or rent under this Lease nor otherwise in any material respect adversely affect any rights of Lessor under this Lease. (12) Notwithstanding anything to the contrary contained in this Section 6.2(c), to effect a cure of a default by Lessee, an Approved Lender shall not be required to pay any accrued Rent or interest thereon. 6.3 Cost of Aonroved Loans to be Paid bv Lessee The Lessee affirms that it shall bear all of the costs and expenses in connection with (i) the preparation and securing of the Approved Loans, (ii) the delivery of any instruments and documents and their filing and recording, if required, and (iii) all taxes and charges payable in connection with the Approved Loans. 6.4 Proceeds of Annroved Loans It is expressly understood and agreed that all Approved Loan proceeds shall be paid to and become the property of Lessee, and that the Lessor shall have no right to receive any such Approved ':, Loan proceeds. 6.5 Subordination of Lessor's Fee Interest In addition to Lessee's right to encumber its leasehold estate in the Land and its fee interest in the Improvements, Lessor agrees to encumber its fee title in the Land with the encumbrances and liens described in Section 6.2(a) above. Upon written request by Lessee, Lessor agrees to provide the subordination provided in this Section 6.5, subject to the conditions described in this Lease, including the following: (a) The liability of Lessor under any documents executed in connection with any Approved Loan shall be limited by the express 1442cH.P50 07/l 3/94 -2o- 5’ . . terms of the instrument of subordination. The limitations shall include: (i) the limitation of Lessor's liability solely to the interest or interests subordinated, Lessor's right not to execute any instrument which would obligate Lessor for the payment of the Approved Loan, and the Approved Lender's express recognition that Lessor is not so obligated; and (ii) the Approved Lender's agreement to provide Lessor with notice of any default under the Approved Loan, and the right, without the obligation, within the same time provided to Lessee, to cure any default or to purchase the Approved Lender's rights under the Approved Loan Documents and other debt and security interests for an amount equal to the sum of the unpaid principal balance, plus accrued interest and other amounts evidenced and secured thereby. (b) Lessee shall not be in Material Default under the terms of this Lease at the time of a request for subordination of Lessor's fee interest. "Material Default" shall mean any material breach by Lessee under this Lease, including, without limitation, the failure to pay Rent then due and payable, or, the filing of a bankruptcy petition by or against Lessee. Lessee shall not be in Material Default if Lessee has commenced to cure the Material Default at the time in question and diligently pursues such cure to completion. (c) Provided the conditions of this Section 6.5 are satisfied, Lessor shall, within ten (10) days after written request by Lessee, execute, acknowledge and deliver a deed of trust or other instrument of subordination, together with other documents as may be reasonably required by the Approved Lender from Lessor to effectuate the provisions of this Section 6.5, without any charge by Lessor to Lessee therefor, subject to the terms and conditions contained in this Lease. Lessor will immediately pay over to Lessee proceeds received by Lessor, if any, of any Approved Loan and the proceeds of any Approved Loan received by Lessor shall be considered a trust fund to be paid to Lessee. The agreement of subordination contained herein shall be self-operative and no further instrument of subordination shall be necessary unless it be required by an Approved Lender. If any proceeds are made payable to both Lessor and Lessee, Lessor shall immediately sign any papers necessary to transfer the proceeds to Lessee. 6.6 9 Upon the recording of a Memorandum of Lease or this Lease, Lessor may record in the office of the Recorder of the County in which the Land is situated a request for notice of any default under each Approved Loan. In the event of default by Lessee under an Approved Loan, Lessor shall have the right, but not the 1442cH.P50 07/l 3/94 -21- I . ’ . . . obligation, to cure the default. Any payments made by Lessor to cure a default shall be treated as rent due from Lessee which shall be paid within thirty (30) days of the date on which the payment was made by the Lessor. ARTICLE 7: INSURANCE 7.1 Reauired Insurance Coveraae (a) Fire and Extended Coveraae Endorsement. The Lessee shall during the Lease Term keep the Development insured against loss or damage by a standard all risk policy in amounts not less than the replacement value of the Development, or should insurance in such amount not be reasonably and commercially available, such lesser amount as may be acceptable to both Lessor and Approved Lenders. The amount of such insurance shall be adjusted by reappraisal of the Improvements by the insurer or its designee at least once every five (5) years during the Lease Term, if requested by Lessor. If an all risk policy insuring the full replacement value of the Development is not reasonably and commercially available, Lessee shall use best efforts to obtain and maintain an extended coverage endorsement that ensures the full replacement value of the Development as soon as such coverage becomes commercially and reasonably available. (b) Liabilitv and Prouertv Damaae Insurance. During the Lease Term, the Lessee shall keep in full force and effect a policy or policies of comprehensive general liability and property damage insurance against liability for bodily injury to or death of any person or property damage arising out of an occurrence on or about the Development. The limits of such insurance shall be not less than one million dollars ($l,OOO,OOO) combined single limit for bodily injury and property damage. The limits of the insurance shall be adjusted once every five (5) years if and as reasonably required by Lessor. (c) Workers' Comnensation Insurance. The Lessee shall carry or cause to be carried workers t compensation insurance covering all persons employed by Lessee in connection with the Development and with respect to whom death, bodily injury, or sickness insurance claims could be asserted against the Lessor or Lessee. (d) Builders I Risk Insurance. During the course of any alteration, construction or reconstruction, the cost of which exceeds one hundred thousand dollars ($lOO,OOO), the Lessee shall :.. require any contractor to provide builders' risk insurance for not less than one million dollars ($l,OOO,OOO) combined single ,. ? 1442uLP50 07/l 3/94 -22- +. ::. ;*.‘* . . . , limit for bodily injury or property damage insuring the interests of Lessor, Lessee and any contractors and subcontractors. 7.2 Insurance Policies and Premiums (a) All liability policies required by this Lease or any Approved Loan Document shall name the Lessor as an additional insured. Duplicate copies of such policies or certificates of such insurance shall be promptly furnished to the Lessor. (b) To the extent obtainable, any policy of insurance shall provide that any change or cancellation of said policy must be made in writing and sent to Lessee and Lessor at their respective principal offices at least thirty (30) days before the effective date of change or cancellation. 7.3 Proceeds of Insurance (a) For so long as any Approved Loan on the Development is outstanding: All fire and standard risk or extended coverage (casualty) insurance proceeds shall be applied to the payment of the costs of repairing or rebuilding that part of the Development damaged or destroyed if (i) the Lessee agrees in writing within ninety (90) days after payment of the proceeds of insurance that such repair or rebuilding is economically feasible, and (ii) each Approved Lender with an outstanding Approved Loan permits such repairing or rebuilding, provided that the extent of Lessee's obligation to restore the Development shall be limited to the amount of the insurance proceeds. If the Development is not repaired or rebuilt, all such proceeds shall be applied in a manner consistent with the terms of the Approved Loans. (b) In the event that no Approved Loan is outstanding, all insurance proceeds received under the policies set forth in this Article 7 shall be paid to the Lessee, provided that the Lessee shall apply such proceeds, to the extent possible, to reconstruction or repair in a manner consistent with the provisions of Section 8.2. 7.4 Indemnification (a) Lessee shall indemnify and save harmless Lessor, its councilmembers, officers, employees, agents, and contractors, utilizing attorneys approved by the Lessor from all claims, actions, demands, judgements, settlements, costs, expenses and attorneys' fees arising out of, attributable to or otherwise occasioned, in whole or in part, by any act or omission of Lessee, its partners, agents, contractors, servants, employees or 1442cJ+P50 07/l 3/94 -23- invitees, arising from or relating to operation of the Development. (b) Lessor shall indemnify and save harmless Lessee, its partners, officers, employees, agents, contractors, or the partners, officers, employees, agents, contractors, stockholders or principals of its partners, utilizing attorneys approved by the Lessee, from all claims, actions, demands, judgements, settlements, costs, expenses and attorneys' fees arising out of, attributable to or otherwise occasioned, in whole or in part, by any act or omission of Lessor, its agents, contractors, servants, employees or invitees, arising from or relating to operation of the Development. ARTICLE 8: CONDEMNATION, DAMAGE OR DESTRUCTION OF THE DEVELOPMENT 8.1 Condemnation If the Development or the Land or any part thereof shall be taken or condemned, for any public or quasi-public purpose or use by any competent entity in appropriate proceedings, or by any right of eminent domain, the Lessor and Lessee shall request that awards and other payments on account of a taking of the Development and the Land (less costs, fees and expenses incurred by Lessor and Lessee in connection with the collection thereof) shall be divided by the presiding court between loss of value of the fee interest in the Land and loss of value of the Development. In any case, such awards and payments shall be applied as follows: (a) Net awards and payments received on account of a partial taking of the Development, other than a taking for a temporary use not exceeding one (1) year, shall be allocated and paid in the following order of priority: (1) If Lessee reasonably believes restoration is economically feasible, and unless Lessee is then in default and the opportunity to cure has expired under the Approved Loan Documents, first, to pay the cost of restoration of the Development, provided that the extent of Lessee's obligations to restore the Development shall be limited to the amount of the net award and payment received on account of the taking. Lessee shall furnish to Lessor evidence reasonably satisfactory to Lessor of the total cost of the restoration of the Development. (2) Second, or first if (i) Lessee does not reasonably believe that restoration is economically feasible, or (ii) Lessee . 1442uLP50 Q7/13/94 -24- , . is in default and the opportunity to cure has expired under the Approved Loan Documents, to any Approved Lenders (in the order of their respective lien priority, if there is more than one Approved Lender) in an amount equal to the decrease (if any) in the value of the security for their respective Approved Loans as a result of the partial taking (calculated as set forth below in this subsection 8.1(a)(2)), less amounts payable to or recovered by the Approved Lender pursuant to such taking, but not to exceed the unpaid balance of their Approved Loans. For purposes of this subsection 8.1(a)(2), the amount of decrease in the value of the security for an Approved Loan shall be the amount, if any, necessary to reduce the outstanding principal of said Approved Loan such that the Loan to Value Ratio (as defined below) of said Approved Loan immediately following the taking is equal to the Loan to Value Ratio of said Approved Loan immediately preceding the taking. Loan to Value Ratio shall mean that fraction the numerator of which is the sum of the principal amount of the Approved Loan plus the principal amounts of all Approved Loans higher in lien priority to the Approved Loan either immediately following the taking (after taking into account any paydown pursuant to this subsection of any loans of higher priority) or, immediately preceding the taking, as applicable, and the denominator of which is the appraised value of the Development immediately following the taking or immediately preceding the taking, as applicable. The values of the Development immediately preceding the taking and immediately following the taking shall be determined by an MA1 or SRI appraiser selected by Lessee and who is reasonably satisfactory to Lessor. (3) The balance, if any, shall be divided between Lessor and Lessee in the manner specified in subparagraph (e) below; provided, however, if the taking has no effect on the value of the Lessor's fee interest in the Land or reversionary interest in the Improvements, the balance shall be paid exclusively to Lessee. (b) Net awards and payments received on account of a partial or total taking of only Lessor's fee interest in the Land .- or the reversionary interest in the Improvements (that is, a taking of Lessor's fee interest in the Land or Lessor's reversionary interest in the Improvements that has no effect on the value of Lessee's leasehold interest in the Land or Lessee's fee interest in the Improvements), including severance damages, shall be paid to Lessor, which amount shall be free and clear of any claims of Lessee, or any other persons claiming rights to the Land through or under Lessee, other than Approved Lenders to which the Lessor has subordinated its interest in the Land. 1442cH.P50 07/13/544 -25- (c) Net awards and payments received on account of a taking for temporary use not exceeding one (1) year and relating to a period during the Lease Term shall be paid to Lessee; provided, however, that if such taking for temporary use has resulted in any damage to or destruction of the Development, such net awards and payments shall be first applied to pay the cost of restoration thereof if the Lessee determines that restoration is * economically feasible. Net awards and payments received on account of a taking for temporary use not exceeding one (1) year ' and relating to a period beyond the Lease Term shall be paid to Lessor. (d) Net awards and payments received on account of a total taking of the Development shall be allocated and paid in the following order of priority: (1) First, to any Approved Lenders with then- outstanding Approved Loans secured by the Development (in the order of their respective lien priority, if there is more than one Approved Lender), an amount equal to the unpaid balance secured by their respective Approved Loans to the extent there are sufficient funds to make such payments; (2) The balance, if any, shall be divided between Lessor and Lessee in the manner specified in subparagraph (e) below; provided, however, if the taking has no effect on the value of the Lessor's fee interest in the Land or reversionary interest in the Improvements, the balance shall be paid exclusively to Lessee. (e) For purposes of subsections (a)(3) and (d)(2) above, first Lessee shall receive reimbursement for any funds it has reasonably expended for repair and/or reconstruction of the Development (other than funds received from Lenders). Second, Lessor shall receive that portion of the remaining sum equal to such remaining sum, multiplied by a fraction the numerator of which is the number of years elapsed from the date of the Lease to the date of the taking, and the denominator of which is fifty- seven (57). Third, Lessee shall receive all remaining sums. (f) Lessee shall receive any award granted for or allocated to trade fixtures, moving expenses or loss of business. (g) If the Development is taken or condemned during the last five (5) years of the Lease Term under circumstances described in subparagraph (a) above, Lessee may elect to terminate the Lease and proceeds of any payment or award shall be distributed in accordance with the provisions of subparagraphs (d) and (e) above. 1442cH.P50 07/13/94 -26- , * , . . . 8.2 Administration of Construction Fund in the Event of , or Damase or Destruction of Develonment Co demnation n In the event that the Approved Loans have been paid in full, and if the Development or any part of it is to be repaired or reconstructed, after damage or destruction of the Development or its condemnation, all proceeds collected under any and all policies of insurance referred to in Article 7 above covering c such damage or destruction, or all compensation received for such taking by the exercise of the power of eminent domain, shall be paid into a special trust fund to be created and held by the Lessee and to be designated as the Construction Fund, during such repairing or reconstructing. Any surplus of such insurance or condemnation proceeds remaining after the completion of all payments for such repairing or reconstructing shall be held or applied by the Lessee in a manner consistent with the applicable provision of Article 7 or this Article. 8.3 hessee, Lessor, Annroved Lenders to be Made Parties in Leaal Proceedinas (a) In the event proceedings shall be instituted (i) for the exercise of the power of eminent domain, or (ii) as a result of any damage to or destruction of the Development, the Lessee, Lessor, and any Approved Lender with a then-outstanding Approved Loan shall be made parties to those proceedings, and if not made parties by the petitioning party, shall be brought into the proceedings by appropriate proceedings of other parties so that adjudication may be made of the damages, if any, to be paid to the Lessee, Lessor and Approved Lenders as compensation for loss of their rights in the Improvements or the Land, or for damage to or destruction of the Development. Should Lessor or Lessee receive notice of institution of any proceedings subject to Section 8.1, the party receiving such notice shall notify the other in accordance with Section 11.2 of this Lease, not later than thirty (30) days after receiving such notice. (b) The Lessor and the Lessee shall cooperate and consult with each other in all matters pertaining to the settlement, compromise, arbitration, or adjustment of any and all claims and demands for damages on account of damage to or destruction of the Development, or for damages on account of the taking or condemnation of the Improvements or the Land. 1442cxP50 07/13/94 -27- 8.4 Termination In the event of a total taking or in the event of damage, destruction, or a partial taking, other than a temporary taking of the Development, which Lessee reasonably determines renders continued operation of the Development infeasible both as a whole and in substantial part, this Lease shall terminate (except if Lessee is rebuilding the Development in accordance with the terms of this Lease), and in such event any proceeds shall be allocated pursuant to Section 7.3 or Article 8, as appropriate. In the event of a partial taking that does not result in termination pursuant to this Section 8.4, this Lease shall remain in full force and effect as to the portion of the Development remaining, except that Rent otherwise payable hereunder shall be equal to an amount determined by multiplying the Rent by the ratio that the number of square feet in the Improvements after such taking bears to the number of square feet in the Improvements prior to the taking. ARTICLE 9: A S > 9.1 Lessor to Give Peaceful Possession The Lessor covenants that it owns in fee simple, and that it has good and marketable title to the Land and that the Land is free of all easements, covenants, conditions and restrictions except for those exceptions set forth in Bxhibit B to this Lease. The Lessor has the full right and authority to make this Lease. The Lessor covenants and warrants that the Lessee and its Tenants shall have, hold and enjoy, during the Lease Term, peaceful, quiet and undisputed possession of the Land without hindrance or molestation by or from anyone so long as the Lessee is not in default under this Lease following the expiration of all applicable notice and cure periods. 9.2 Lessor to Lease Development with Marketable Title Except as disclosed in Section 9.1, Lessor covenants and warrants that, there are no outstanding liens or encumbrances on the Land. 9.3 Lessor to Obtain Necessarv Governmental Annrovals The Lessor covenants that all necessary approvals have been * I obtained from any and all governmental agencies in compliance . with all laws, ordinances, and regulations requisite to leasing of the Land. 1442CH.PSO 07/l 3/94 -28- 9.4 Release of Lessor Lessor may sell, assign, transfer or convey (but not encumber) all or any part of Lessor's interest in the Land, reversionary interest in the Improvements or this Lease without obtaining Lessee's consent, provided that the purchaser, assignee, or transferee expressly assumes all of the obligations of the Lessor under this Lease by a written instrument in a form w reasonably satisfactory to Lessee and recordable in the Official Records of the County of San Diego. In the event Lessor intends to sell all or any part of the Land, Lessor shall notify Lessee of such intention not later than ten (10) days before close of escrow. In the event of a sale, assignment, transfer or conveyance by Lessor of the Land or its rights under this Lease, the same shall operate to release Lessor from any future liability upon any of the covenants or conditions of this Lease, expressed or implied, in favor of Lessee, and in such event Lessee shall look solely to the successor in interest of Lessor in and to the Land or this Lease. This Lease shall not be affected by any such sale or transfer, and Lessee agrees to attorn to any such purchaser or assignee. Except as disclosed in Section 9.2, Lessor shall not encumber or hypothecate its interest in the Land or any part thereof with any mortgage, deed of trust or other form of security interest. Any existing mortgagee shall agree in writing in form satisfactory to Lessee not to disturb Lessee's possession of the Land in the event such mortgagee should foreclose or otherwise exercise its remedies under its loan documents provided Lessee agrees to attorn to such mortgagee. ARTICLE 10: DEFAULTS AND REMEDIES 10.1 Events of Default: Remedv for Default bv Lessee (a) Any one or more of the following events shall constitute an "Event of Default": (1) Failure to pay rent, as required pursuant to Section 2.3 of this Lease, or any other payment required hereunder, and continuance of such failure for a period of thirty (30) days after receipt by the Lessee of written notice specifying the nonpayment; (2) Failure of the Lessee to observe and perform any covenant, condition or agreement hereunder on its part to be 144zcH.P50 07/l 3/94 -29- I : ‘. . . - performed, and (i) continuance of such failure for a period of thirty (30) days after receipt by the Lessee of written notice specifying the nature of such default, or (ii) if by reason of the nature of such default the same cannot be remedied within said thirty (30) days, the Lessee fails to proceed with reasonable diligence after receipt of said notice to cure the same; or (3) Lessee's abandonment of the Land for the period of time required for such abandonment to be legally recognized as such under California law; or (4) A general assignment by Lessee for the benefit of creditors; or (5) The filing of a voluntary petition by Lessee, or the filing of an involuntary petition by any of Lessee's creditors seeking the rehabilitation, liquidation or reorganization of Lessee under any law relating to bankruptcy, insolvency or other relief of debtors, provided that in the case of an involuntary petition Lessee shall have ninety (90) days to cause such petition to be withdrawn or dismissed; or (6) The appointment of a receiver or other custodian to take possession of substantially all of Lessee's assets or of this leasehold, which appointment is not withdrawn or dismissed within ninety (90) days; or (7) Lessee becomes insolvent or declares in writing it is unwilling to pay its debts as they become due; or any court enters a decree or order directing the winding up or liquidation of Lessee or of substantially all of its assets; or Lessee takes any action toward the dissolution or winding up of its affairs or the cessation or suspension of its use of the Development; or (8) attachment, execution or other judicial seizure of substantially all of Lessee's assets or this leasehold, which is not dismissed, bonded, or stayed within ninety (90) days. (b) In the event Lessee fails to cure any default within the applicable cure period, any limited partner of Lessee shall have the same rights as provided Approved Lenders with outstanding loans under Section 6.2(c)(2),(3) and (7), which provisions shall be for the benefit of such limited partners of Lessee. l442cKP50 07/l 3/94 -3o- (c) Whenever any default shall have occurred and be continuing and upon expiration of any applicable cure periods provided herein, and subject to the cure rights of Lenders and limited partners of Lessee set forth in this Lease, the Lessor may take whatever action at law or in equity as may appear reasonably necessary to enforce performance or observance of any obligations, agreements, or covenants of the Lessee under this Lease, including without limitation, termination of this Lease. In the event of such default, Lessor's remedies shall be cumulative, and no remedy expressly provided for in this Section shall be deemed to exclude any other remedy allowed by law. 10.2 Remedy for Default bv Lessor If the Lessor defaults under this Lease, the Lessee shall give the Lessor and the Approved Lenders written notice requiring that the default be remedied by the Lessor. If the default is not cured within the time set forth by the Lessee (which shall be a reasonable time for curing the default and shall in any event be at least thirty (30) days), the Lessee and Approved Lenders may take any action as may be necessary to protect their respective interests. Such action, in the event that the Lessor shall fail to perform any of its obligations under this Lease and such failure shall continue after the expiration of the cure period specified in this section, shall include the right of the Lessee and Approved Lenders to cure such default and receive any expenditure with interest thereon (at the reference rate then in effect at Wells Fargo Bank, N-A) from Lessor within thirty (30) days after sending to Lessor a statement therefor. ARTICLE 11: 11.1 Instrument Is Entire Aareement This Lease and the attached Exhibits constitute the entire agreement between the parties with respect to the matters set forth herein. This Lease shall completely and fully supersede all other prior understandings or agreements, both written and oral, between the Lessor and the Lessee relating to the lease of the Land by the Lessor to the Lessee. 11.2 Notices All notices hereunder shall be in writing signed by Authorized Officer(s) and shall be sufficient if sent by United . States first class, certified mail, postage prepaid, or express delivery service with a receipt showing the date of delivery, addressed: 1442cH.P50 07/13/94 -31- if to the Lessor: with a copy to: if to the Lessee: City of Carlsbad City Hall 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attention: City Manager City of Carlsbad Housing & Redevelopment Department 2965 Roosevelt Drive, Suite B Carlsbad, CA 92008 Attention: Housing & Redevelopment Director La Terraza Associates, a California Limited Partnership One Hawthorne, 4th Floor San Francisco, CA 94105 Attn: Managing General Partner and following notice to the Lessor that Mission Housing (or its affiliate) has been admitted as a limited partner of Lessee, with a copy to: Mission Housing 18101 Von Karman Ave., Suite 1700 Irvine, CA 92715-1046 Attn: Asset Manager or any other address as either party may have furnished to the other in writing pursuant to the requirements of this Section 11.2 as a place for service of notice. Any notice so mailed shall be deemed to have been given on the delivery date or the date that delivery is refused by the addressee, as shown on the return receipt. 11.3 < Lessor and Lessee may not mutually agree to terminate or ' surrender this Lease without the consent of the limited partner of Lessee. 11.4 Force Maieure. Performance by either party hereunder shall not be deemed to be in default where defaults are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; ' 1442cH.P50 07/l 3/54 -32- - quarantine restrictions; freight embargoes; governmental restrictions or priority; litigation (including suits filed by third parties concerning or arising out of this Lease); weather or soils conditions which, in the opinion of the Lessee's contractor, will necessitate delays; inability to secure necessary labor, materials or tools; delays of any contractor, sub-contractor or supplier; acts of the other party; acts or failure to act of any public or governmental agency or entity (other than the acts or failure to act of the Lessor); or any other causes (other than Lessee's inability to obtain financing for the Development) beyond the control or without the fault of the party claiming an extension of time to perform. Times of performance under this Lease may also be extended in writing by the Lessor and the Lessee. 11.5 Recordinq A Memorandum of this Lease shall be recorded in the Office of the Recorder in the county in which the Development is located. Neither the failure of the Lessor or the Lessee to insist upon strict performance of any of the covenants and agreements this Lease nor the failure by the Lessor or Lessee to exercise any rights or remedies granted to such parties under the terms . of of this Lease shall be deemed a waiver or relinquishment (i) of any covenant herein contained or of any of the rights or remedies of the Lessee or Lessor hereunder, (ii) of the right in the future of the Lessor or Lessee to insist upon and to enforce by any appropriate legal remedy a strict compliance with all of the covenants and conditions thereof, or (iii) the right of the Lessor to recover possession of the Land upon occurrence of a default and the expiration of applicable notice and cure periods or the expiration of the Lease Term. 11.7 Effective Date: Counternarts This Lease shall become effective upon the commencement of the Lease Term set forth in Article 2. This Lease may be executed in counterparts, each of which shall be an original and all of which shall constitute the same instrument. 11.8 c This Lease and all of its provisions and attached Exhibits shall inure to the benefit of, and shall be binding upon, the Lessor, the Lessee, and their respective permitted successors and 1442cH.P50 07/l 3/94 -33- . _ \. . - . permitted assigns and, as provided in Sections 6.2(c)(lO) and 10.1(b), Approved Lenders and limited partners of Lessee. 11.9 Relationshin of Parties Nothing contained in this Lease shall be deemed or construed by the parties or by any third party to create the relationship of principal or agent or of partnership, joint venture or association or of buyer and seller between Lessor and Lessee, it being expressly understood and agreed that neither the computation of any payments and other charges under the terms of this Lease nor any other provisions contained in this Lease, nor any act or acts of the parties, shall be deemed to create any relationship between Lessor and Lessee other than the relationship of landlord and tenant. 11.10 No Meruer There shall be no merger of this Lease or any interest in this Lease nor of the leasehold estate created hereby, with the fee estate in the Land, by reason of the fact that this Lease or such interest therein, or such leasehold estate may be directly or indirectly held by or for the account of any person who shall hold the fee estate in the Land, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of the leasehold estate created hereby may be conveyed or mortgaged in a leasehold mortgage to a leasehold mortgagee who shall hold the fee estate in the Land or any interest of the Lessor under this lease. 11.11 Gender and Number Words of any gender used in this Lease shall be held to include any other gender, and any words in the singular number shall be held to include the plural (and vice versa), when the context requires. 11.12 Titles The titles and article or paragraph headings are inserted . i . only for convenience, and are in no way to be construed as a part :y:& . d i: :c.$- ? of this Lease or as a limitation on the scope of the particular c,.." ':", .p ..5 a- '.' provisions to which they refer. . '. 11.13 Severabilitv If any provision of this Lease or the application of any provision to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Lease, or the 1442cH.PSO 07/13/94 -34- - application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected, and each provision of this Lease shall be valid and be enforced to the fullest extent permitted by law. 11.14 Anolicable Law This Lease shall be governed by and construed in accordance with the laws of the State of California. w IN WITNESS WHEREOF, the parties have executed this Lease effective as of the day and year first above written. LESSOR: City of Carlsbad, a municipal corporation By: Its: LESSEE: La Terraza Associates, a California Limited Partnership By: BRIDGE Housing Corporation, a California nonprofit public benefit corporation, its managing general partner By: Its: APPROVED AS TO FORM By: Ron Ball City Attorney 1442aLP50 07/13/94 -35- EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY -36- J3XBIBIT B LIENS AND ENCUMBRANCES 1. 2. w 3. 1442cH.P50 07/l 3/94 -37- EXHIBIT 3 FINANCIAL ASSISTANCE AND REIMBURSEMENT AGREEMENT VILLAS AT EL CAMINO REAL AFFORDABLE HOUSING PROJECT - AFFORDABLE HOUSING AND FINANCIAL REIMBURSEMENT AGREEMENT THIS Financial Assistance and Reimbursement Agreement (the "Agreement") is entered into as of July 14-, 1994 ("Effective Date") by and between AVIARA LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership ("ALA")', BRIDGE Housing Corporation, a California non-profit public benefit corporation ("Bridge") and the CITY OF CARLSBAD, a municipal corporation ("City") with reference to the following facts: A. ALA is currently developing a master planned community known as Aviara ("Aviara") located in the City of Carlsbad, County of San Diego. Aviara consists of three planning phases within each of which are numerous "Planning Areas." The term "Phase" or "Phases" shall mean any one (or more) of such phases within Aviara. The term "Planning Area" or "Planning Areas" shall mean any one (or more) of such planning areas within Aviara. B. As a condition to Phases II and III of Aviara, the City has required a commitment from ALA for the construction and maintenance of affordable housing rental units. On September 14, 1992, ALA and City entered into that certain Aviara Master Plan Agreement for Inclusionary Housing, pursuant to duly noticed public hearing (the "Aviara Inclusionary Housing Agreement"). The requirement of ALA for Affordable Housing with respect to Aviara, as required under the Aviara Inclusionary Housing Agreement, is herein referred to as the "Aviara Inclusionary Housing Obligation"). C. The parties acknowledge that ALA has elected to proceed under the special conditions set forth in Section 3.2.2(b) of the Aviara Inclusionary Housing Agreement ("Accelerated Affordable Housing"), and that by so proceeding and by satisfying such conditions ALA will be providing a substantial amount of Affordable Housing which will be of significant benefit to City, and that ALA will be doing so substantially in advance of the required timetable for the production of Affordable Housing in accordance with the otherwise applicable Inclusionary Housing Requirements (as therein defined). The parties recognize that, by so proceeding, ALA has taken and will be taking substantial risks and incurring substantial costs. D. In order to acquire land for the purpose of satisfying the Aviara Inclusionary Housing Obligation by means of the Accelerated Affordable Housing, ALA previously entered into the Bressi Option Agreement relating to the development site (the "Land") for the affordable housing units described above. N\A003528J.Dt36 070194 -l- [AVIARA/BRESSII KRB-464861 E. For purposes of this Agreement the "Project" shall refer to and include (i) the processing and obtaining of (*'Processing") City and other governmental permits (collectively tVPermitsl') necessary to develop and construct Affordable Housing units on the Land, in sufficient number and in particular characteristics to satisfy the requirements of ALA with respect to its Aviara Project to fulfil1 the Aviara Inclusionary Housing Obligation, and to create the opportunity for the sale by City of Affordable Housing Credits as discussed in Recital R; (ii) the consulting, testing, analysis, engineering, design and all related planning (tlPlanning") for the number, configuration and location of such units; (iii) eventual acquisition by ALA (or the Bridge Partnership, pursuant to the Bridge Option) of either long term lease or fee ownership of the Land: and (iv) the actual development and construction of such units, and subsequent operation as rental apartments under the applicable rental controls necessary to assure that such housing is for lower and low income people. F. To that end, Aviara has submitted application to City relative to the Land, for (i) site development plan, (ii) final map, and (iii) related entitlements, necessary to develop on the Land approximately 344 rental units (the "Project Entitlement ApplicationsIt). G. On August 12, 1993, the Housing Commission of City considered and passed two resolutions, Resolution numbers 002 and 003, respectively, recommending (by Resolution 002) to the City Council that it accept assignment from ALA of the rights under the Bressi Option Agreement and, pursuant to such Bressi Option, purchase the Land for the purpose of holding it to be available exclusively for the Project contemplated by ALA for a designated period of time, and (by Resolution 003) recommend authorization from the City Council to submit an application to the U.S. Department of Housing and Urban Development for a Section 108 Loan to City for the purpose of providing additional funding to City for purchase of the Land. H. On October 14, 1993, the Housing Commission of City considered and passed two additional resolutions, Resolutions numbers 93-009 and 93-010, respectively, recommending (by Resolution 93-009) that the Housing and Redevelopment Director of City be authorized to execute documents required to appropriate $2,000,000.00 in funds from the Redevelopment Low and Moderate Income Housing Set-aside Funds now on hand with City in order to provide for acquisition of the Bressi Property and related purposes, and recommending (by Resolution 93-010) that the City Council resolve to provide certain financial assistance to the proposed affordable housing Project. N\A003528J.DBb 070194 -2- [AVIARA/BRESSII ICRB-46U61 ~ . ;, ‘I,, I a I. On October 26, 1993, the City Council of City held a duly noticed public hearing concerning the resolutions forwarded to City Council from the Housing Commission and staff as contained in Agenda Bill no. 12,448, and (acting as the Housing and Redevelopment Commission of City) also held a duly noticed public hearing concerning the subject matter of such resolutions forwarded by the Housing Commission and staff as contained in Agenda Bill no. 240 for the appropriation of funds for acquisition of the real property. By Housing and Redevelopment Commission Resolution number 237 (acting as the Housing and Redevelopment Commission of City), and by City Council Resolution number 93-297 (acting as the City Council) (collectively the "Enacting ResolutionsIt), the City Council, among other things, (1) authorized and directed the City to take such steps as shall be necessary to (a) accept the assignment of the Option from Aviara pursuant to the terms of this Agreement, (b) promptly submit an application for a Section 108 Loan to the U.S. Department of Housing and Urban Development (ItHUDtl) for the purpose of obtaining a portion of the funds for purchase of the subject Bressi Property, (c) immediately exercise the Bressi Option in accordance with its terms, including but not limited to the execution and delivery of the Purchase and Sale Agreement attached as an exhibit thereto, and any escrow instructions required in order to consummate such transaction, and (d) take all steps necessary to close the purchase transaction reflected in such documents on or before December 31, 1993 (the last date specified in the Option Agreement for the close of such transaction); and (2) further authorized and directed that the City use as funds for such acquisition the sum of up to $2,000,000.00 from the Redevelopment Low and Moderate Income Housing Set-aside Funds now on hand with City, with such funds ultimately to be replenished (after such acquisition) from the aggregate of (i) existing Community Development Block Grant ("CDBG") funds in the full amount of the $880,372.30 now on deposit in the City's CDBG Affordable Housing Acquisition Fund, together with (ii) the proceeds of the Section 108 Loan when and as received from HUD; and (3) authorized certain financial assistance by the City to the Project. J. Pursuant to the Enacting Resolutions, City and ALA entered into that certain Assignment and Option Agreement dated October 28, 1993 (the t'Assignmenttt), by the terms of which ALA assigned to City and City assumed the rights of the optionee under the Bressi Option, in exchange for the City's undertaking to acquire the Land for the benefit of ALA, and to grant to ALA (for itself or its assignee) the exclusive option to acquire the Land for purposes of the Project as set forth in Sections 5.1 and 5.2 thereof (the ttProject Option"). Further, in case for any reason (including without limitation the inability to satisfy the conditions prerequisite to exercise of N\A003528J.DB6 070194 -3- [AVIARA/BRESSIl [CRB-464861 the Project Option) the Project was unable to proceed and the Project Option were to expire without having been validly exercised and construction of the Affordable Housing not timely commenced, and to protect the interests of ALA in such event, City also granted to ALA an additional exclusive option to acquire the Land in such circumstances as set forth in Section 5.3 of the Assignment (the ffFallback Optionft). K. Under the terms of Recital M and Section 9.1 of the Assignment, City recognized the intention of ALA to cause the formation of a partnership (or other entity) to organize and fund development of the Project, and City granted the right for ALA to assign its rights under the Assignment to such a partnership provided that ALA is a partner and subject to the restrictions therein stated that such assignee partnership agree use the Bressi Property only for purposes of the Project. L. Pursuant to the Assignment, City duly gave notice of its exercise of the Bressi Option, and in consummation of such exercise, acquired the Land from the Trustee on November 15, 1993. City now holds title to the Land, subject to the rights of ALA as set forth in the Assignment, including without limitation the Project Option and the Fallback Option. M. In contemplation of the Project, ALA has used its best efforts to cause BRIDGE Housing Corporation, a California non-profit public benefit corporation (ffBridgef*) to form a partnership for purposes of developing the Project. In reliance thereon, Bridge has a partnership in formation tentatively named La Terraza Associates, a California limited partnership (the "Bridge Partnership"). It is further anticipated in contemplation of the Project that Bridge will seek, on behalf of the contemplated Bridge Partnership, to finance the development of the Project in part through the proceeds of the syndication of the federal low income house tax credits which the parties anticipate will be allocated to the Project pursuant to an application being processed by Bridge. In connection with such syndication, the parties anticipate the admission of one or more tax credit investors as limited. partners in the Bridge Partnership. N. In contemplation of the Project and of the application for tax credits made by Bridge, with the consent of ALA, Bridge has entered into a certain Option Agreement dated April 13, 1994 with the City (the "Bridge Option AgreementIt), pursuant to which City granted to Bridge the option (the "Bridge OptionVt) to lease the Land for purposes of the Project. Concurrently therewith, Bridge, ALA and City entered into that certain Option Subordination Agreement dated April 13, 1994 (the "ALA Subordination Agreement") pursuant to which (i) ALA subordinated the Project Option to the Bridge Option and N\A003528J.D86 070194 -4- [AVIARA/BRESSII KRB-464861 (ii) City and Bridge agreed that the exercise of the Bridge Option would be subject to the condition prerequisite that the Bridge Partnership be formed and include as a partner either ALA, or a partnership composed of ALA and others. 0. The parties acknowledge that, prior to the Effective Date, ALA has incurred significant expenses in making option payments to the Trustee under the Bressi Option, as well as other expenses related to planning and processing for the Project, as well as the payment of pre-development services all for the benefit of the Project (collectively the "Pre- Development Expensesff). A schedule of such Pre-Development Expenses in the aggregate sum of more than One Million Dollars ($1,000,000.00) as attached hereto as Exhibit '*A.lf P. The parties acknowledge that, prior to the Effective Date, the City has expended money for the benefit of and to further the Project, pursuant to the Enacting Resolutions, in the following amounts: (a) the amount of Two Million Dollars ($2,000,000.00) (the "Land Advance*') in connection with the acquisition by City of the Land; and (b) the amount of up to Two Million Nine Hundred Thousand Dollars ($2,900,000.00) (either spent or committed to be spent) in the form of other financial assistance to the Project (the "Financial Assistance Advance") from the Redevelopment Low and Moderate Income Housing Set-aside Funds of the City. Q. City acknowledges that substantial public improvements and benefits have been provided to City by Aviara having elected to proceed pursuant to the Accelerated Affordable Housing and by using its best efforts to cause the formation of the Bridge Partnership and the other matters as set forth above. In order to strengthen the public planning process and reduce the economic costs of development, and to reinforce the City's growth management plan, and to further the interest of the City in obtaining the production of affordable housing on an accelerated basis, all of which have been and will be of benefit to the City and its residents, City entered into the Assignment and acquired the Land, and intends to enter into this Agreement in order to further the same objectives. R. The parties acknowledge that the number of rental units to be constructed within the Project will substantially exceed the number of units required to satisfy the Aviara Inclusionary Housing Obligation. The parties further acknowledge the intent of the City that, by acquiring the Bressi Property, and encouraging the development of the Project, City will help create the opportunity to recapture both the Land Advance and the Financial Assistance Advance, by charging a mitigation fee to developers in the applicable portion of the City area who need to satisfy affordable housing conditions related to their respective developments, and that N\A003528J.D86 070194 -5- [AVIARA/BRESSIl KRB-464861 ‘. , ‘. : I - \- , ’ such fees can and will be imposed by City for the sale of such credits relating to the number of rental units within the Project above those required to satisfy the Aviara Inclusionary Housing Obligation (such credits to be sold by City are herein referred to as the "Affordable Housing Credits"). It is further acknowledged by the parties that this Financial Assistance and Reimbursement Agreement will provide for the opportunity for ALA to share in the monies netted from the Affordable Housing Credits, to the extent of the advances made by ALA for Pre-Development Expenses as referred to in Recital 0 hereof. S. By action of even date herewith, the City Council of City has taken action to approve various other agreements related to the Project including: Ground Lease between City and the Bridge Partnership; Agency Regulatory Agreement between City and the Bridge Partnership: Agency First Loan Agreement between City and the Bridge Partnership, to which are attached forms of an Agency First Note to be executed by the Bridge Partnership to City, and a form of Agency Deed of Trust to be executed by the Bridge Partnership in favor of City as beneficiary. The foregoing are approved by City Council Resolution Nos. . T. In light of the foregoing matters, and in further contemplation of the Project, City desires that ALA assign to Bridge for the benefit of the Bridge Partnership the right, title and interest of ALA in and to the Processing, Planning and Permits, and to provide for the direct payment by City to ALA of a portion of the monies to be netted by City from its sale of the Affordable Housing Credits, and further related matters as set forth below. NOW, THEREFORE, in consideration of the mutual covenants and promises of the parties herein contained, the parties agree as follows: 1. Term. The term of this Agreement shall commence on the Effective Date and expire on the tenth anniversary thereof, unless extended or sooner terminated as hereinafter provided. Upon request by ALA, the City Council may by resolution, without the necessity for an additional ordinance or public hearing, grant one or more extensions, each for a term not to exceed the length of the original term hereof. 2. Assisnment. Subject to the condition of Section 7 and preserving the right to execute its rights under the provisions of Sections 5 and 6: ALA does hereby assign its right, title and interest under Project Entitlement Applications, as well as the Processing, Planning and the Permits to City or its designee. City hereby designates that such assignment shall be made to Bridge for the benefit of the N\AD03528J.DB6 070194 -6- [AVIARA/BRESSIl CCRE-464861 Bridge Partnership and to be used solely in connection with the Project. Bridge hereby accepts such assignment and assumes the rights and obligations of ALA thereunder, from and after the Effective Date. It is acknowledged that Bridge intends to transfer and convey its right, title and interest in and to the Project Entitlement Applications, as well as the Processing, Planning and the Permits to the Bridge Partnership, for use solely in connection with the Project, and City hereby consents to such transfer and conveyance so long as the Bridge Partnership agrees to accept and use such transferred rights for purposes of the Project. 3. Consent Under Option Subordination Asreement. ALA hereby waives that portion of covenant 3.~. of the ALA Subordination Agreement which, without such waiver, would require that Aviara be a limited partner of the other general partner of the Bridge Partnership. ALA consents to the exercise by Bridge of the Bridge Option without Aviara being a limited partner of such other general partner. 4. Affordable Housins Credits. The parties acknowledge that the number of Affordable Housing Credits available for sale by the City will be determined by all dwelling units in the Project in excess of One Hundred Sixty (160). The parties further acknowledge that City alone shall be entitled to sell the Affordable Housing Credits by charging a mitigation fee to developers in the applicable portion of the City who need to satisfy inclusionary housing requirements for Affordable Housing conditions related to their respective developments. The amount of such mitigation fee shall be determined by City from time to time, and City shall likewise make the determination as to the persons or entities to which such sales shall be made. Bridge covenants that it shall execute (or cause the Bridge Partnership to execute, as the case may be) any documents required by City to effectuate the sale of any such Affordable Housing Credits, upon request in writing by City. 5. Sharins of Proceeds from Sale of Affordable Housins Credits. Neither Bridge nor the Bridge Partnership shall share in any of the proceeds from the sale of Affordable Housing Credits. City and ALA shall share in the proceeds of the Affordable Housing Credits sale by City as follows: (a) All proceeds from Affordable Housing Credit sales shall flow to the City until the City's financial assistance to the project, including without limitation the Land Advance, the Financial Assistance Advance and any contingent guarantees, has been recovered with interest; 4 N\AD03528J.DE6 070194 -7- [CRB-464861 ‘, ,I 1 x I I . r I fin’ (b) Once the City has recovered its funds as provided for above, all proceeds from Affordable Housing Credit sales shall flow to ALA until ALA has received a maximum of One Million Dollars ($1,000,000.00); and (c) Thereafter, such proceeds shall be allocated one hundred percent (100%) to City. City shall promptly remit the ALA share of any such proceeds to ALA upon receipt thereof by City. Any such proceeds so received by ALA shall be credited against the unpaid balance of ALA's Pre-Development Expenses. Those proceeds received by City shall be allocated by City, as it determines, to the repayment of the (i) Land Advance or (ii) the Financial Assistance Advance. 6. Assurances. City and Bridge acknowledge that the provisions of the ALA Subordination Agreement are still in effect (other than as specifically waived hereby). Further, City and Bridge agree that the Project Entitlement Applications shall not be amended by Bridge or the Bridge Partnership to reduce the number of rental units to be constructed on the Land as part of the Project to fewer than three hundred twenty (320) without the prior written consent of ALA. 7. Satisfaction of Aviara Oblisation for Affordable Housinq. City agrees that, effective as of the actions of the City Council described in Recital S above and upon mutual execution of this Agreement, all obligations of ALA for any and all affordable housing requirements attributable to the Aviara Project, including without limitation the Aviara Inclusionary Housing Obligation defined herein above, are fully satisfied with respect to all Phases and Planning Areas of Aviara, both commercial and residential. 8. Permitted Delays. Performance by either party of its obligations under this Agreement shall be excused during any period of delay caused at any time by reason of acts of God or civil commotion, riots, strikes, picketing or other labor disputes, shortage of materials or supplies, damage to work in progress by reason of fire, floods, earthquake or other casualty, restrictions imposed or mandated by governmental or quasi-governmental entities, enactment of conflicting laws, litigation, acts or neglect of the other party, or any other cause beyond the reasonable control of a party. Each party shall promptly notify the other party of any delay hereunder as soon as possible after the same has been ascertained. The term of this Agreement and the time deadline for such performance shall be extended by the period of any such delay. N\A003528J.D86 070194 -8- [AVIARA/BRESSII KRE-464861 ‘. I’: ,\* r . 1’ - 9. Default and Remedies. 9.1 Events of Default. Subject to any extensions of time by mutual consent of the parties, and subject to the provisions of Section 8 above regarding permitted delays, any failure by either party to perform any material term or provision of this Agreement shall constitute an event of default ("Event of Default") (i) if such defaulting party does not cure such failure within thirty (30) days following its receipt of notice of default from the other party, where such failure is of a nature which can be cured within such thirty (30) day period, or (ii) if such failure is not of a nature which can be cured within such thirty (30) day period, the defaulting party does not within such thirty (30) day period commence substantial efforts to cure such failure and diligently prosecute the same to completion. Any notice of default given hereunder shall specify in detail the nature of the failure in performance which the noticing party claims constitutes the Event of Default and the manner in which such Event of Default may be satisfactorily cured in accordance with the terms and conditions of this Agreement. During the time periods herein specified for cure of a failure of performance, the party charged therewith shall not be considered to be in default for purposes of termination of this Agreement or institution of legal proceedings with respect thereto. 9.2 Remedies. Upon the occurrence of and failure to timely cure an Event of Default, the non-defaulting party shall have the right, in addition to all other rights and remedies available at law or in equity, to bring any proceeding in the nature of specific performance, injunctive relief, mandamus or in equity as may be permitted by the laws then in effect or this Agreement regarding the defaulting party's failure to perform its agreements, obligations or undertakings hereunder. 10. Amendment. This Agreement may be canceled, modified or amended by mutual consent of the parties in writing. 11. Notices. Any notice to either party shall be in writing and given by delivering the same to such party in person or by sending the same by registered or certified mail, return receipt requested, with postage prepaid, to the party's mailing address set forth below: If to Aviara, to: D.L. Clemens Hillman Properties West, Inc. 2011 Palomar Airport Road Suite 206 N\A003528J.DBb 070194 -9- tAVIARA/BRESSII [CRB-464861 . - : ,I 1. a’ I - v , I’ ’ Carlsbad, California 92008 With a copy to: Sheppard, Mullin, Richter & Hampton 501 West Broadway, 19th Floor San Diego, California 92101 Attn: Christopher B. Neils If to City of Carlsbad, to: City Manager City of Carlsbad City Hall 1200 Carlsbad Village Drive Carlsbad, California 92008 If to Bridge, to: Bridge Housing Corporation 82 Second Street, Suite 200 San Francisco, CA 94105 Attention: Ben Golvin Either party may change its mailing address at any time by giving written notice of such change to the other party in the manner provided herein. All notices under this Agreement shall be deemed given, received, made or communicated on the date personal delivery is effected or, if mailed, on the delivery date or attempted delivery date shown on the return receipt. 12. Entire Asreement. This Agreement and the Exhibits attached hereto contain the entire agreement between the parties with respect to the subject matter hereof. Except as otherwise specified in this Agreement, any prior correspondence, memoranda, warranties or representations relative to the subject matter hereof are superseded by this Agreement and the Exhibits attached hereto. N\A003528J.DB6 070194 -lO- [AVIARA/BRESSII [CRB-464861 : ), L ,’ 4 . ,. l t’ - - 13. City Approval. City Council has authorized the execution of this Agreement by its Resolution No. adopted at a duly noticed meeting of the City Council, after public hearing, on July 12, 1994. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. AVIARA LAND ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership BY Aviara Land Company, a Delaware corporation, General Partner BY Republic Development Company, a California corporation, General Partner BRIDGE HOUSING CORPORATION BY Its CITY OF CARLSBAD, a Municipal corporation BY Raymond R. Patchett, City Manager City of Carlsbad APPROVED AS TO FORM: Ronald R. Ball, City Attorney ATTEST: Aletha L. Rautenkranz, City Clerk N\A003528J.DB6 070194 -ll- [AVIARA/BRESSII KRB-464861 State of California County of ; ss. ) On before me, a notary public in and for &id state, personally appeared' I personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instruments. WITNESS my hand and official seal. Signature (Seal) State of California County of ', ss. 1 On before me, a notary public in and for &id state, personally appeared I personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and- acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instruments. WITNESS my hand and official seal. Signature (Seal) N\A003528J.DBb 070194 -12- CAVIARA/ERESSII [CRB-464861 . . f .d .‘. ; L * , ’ . . State of California County of i ss. On , before me, I a notary public in and for said state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instruments. WITNESS my hand and official seal. Signature (Seal) State of California County of j ss. On before me, a notary public in and for said state, I personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instruments. WITNESS my hand and official seal. Signature (Seal) N\A003528J.DB6 [AVIARA/BRESSIl