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HomeMy WebLinkAbout; EL CAMINO FAMILY HOUSING PARTNERS LLC; 2005-0946747; Lease Related AgreementRECORDED AT THE REQUEST OF CHICAGO TITLE COMRUNY SUBDIVISION DEPT. 44301 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City Clerk's Office City of Carlsbad Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, CA 92008 No fee for recording pursuant to Government Code Section 27383 DOC# 2005-0946747 OCT 31 , 2005 4:59 PM OFFICIAL RECORDS SAN f.ilEbO L'OUNTV RECORDER'S OFFICE G R E G 0 Ffi J S M I T H CO 0 N TV R E rn R D E Fl 000 NA FEES. OC. RAGES: 2005-0946747 (SPACE ABOVE THIS LINE FOR RECORDER'S USE) MEMORANDUM OF GROUND LEASE THIS MEMORANDUM OF GROUND LEASE (the "Memorandum") is made as of October , 2005, by and between the City of Carlsbad, a municipal corporation ("Lessor") and El Camino Family Housing Partners, LLC, a California limited liability company ("Lessee") with respect to that certain Ground Lease dated October^/, 2005 (the "Lease"), between Lessor and Lessee. Pursuant to the Lease, Lessor hereby leases to Lessee and Lessee leases from Lessor that certain real property, more particularly described in Exhibit A, attached hereto and incorporated herein, (the "Property") for the term of the Lease. The Lease commenced on the date of the recordation of this Memorandum and shall continue from such date until the expiration of fifty- five (55) years thereafter, or such sooner termination pursuant to the terms of the Lease. This Memorandum shall incorporate herein all of the terms and provisions of the Lease as though fully set forth herein. This Memorandum may be executed in multiple originals, each or which is deemed to be an original, and may be signed in counterparts. This Memorandum is solely for recording purposes and shall not be construed to alter, modify, amend or supplement the Lease of which this is a memorandum. 1010\16\222864.2 44302 IN WITNESS WHEREOF, the parties have caused this Memorandum to be duly executed as of the date first above written. LESSOR:ration Name: RAYMOND R. PATCHETT Its: CITY MANAGER LESSEE:EL CAMINO FAMILY HOUSING PARTNERS, LLC, a California limited liability company By: AFFIRMED HOUSING GROUP., a California corporation, its Manager By: James Silverwood President [SIGNATURES MUST BE NOTARIZED] 1010\16\222864.2 44303 ' IN WITNESS WHEREOF, the parties have caused this Memorandum to be duly executed as of the date first above written. LESSOR:CITY OF CARLSBAD, a municipal corporation By: Name: Its: LESSEE:EL CAMINO FAMILY HOUSING PARTNERS, LLC, a California limited liability company By: AFFIRMED HOUSING GROUP., a California corporation, its Manager By: James Silverwood President [SIGNATURES MUST BE NOTARIZED] 1010\16\222864.2 44304 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT I I 1 II 1I State of California 'County of On Iss. O}(Q Date / before me,L personally appeared _ KAVlfYT)nil^ Name and Title ofOificer (e.f , "Jane Doe,'Notaiy Public") / C_ PATRICIA L. CRESCENTI Commission * 1358062 Notary Public - California % San D»go County | My Comm. Expires May 24,2006 f Name(s) of Signer(s) ^6? personally known to me D proved to me on the basis of satisfactory evidence to be the person()6) whose name$$ is/ate subscribed to the within instrument and acknowledged to me that he/sheAbey executed the same in his/her/their authorized capacity(teg), and that by his/hefitbeir signature^ on the instrument the person^), or the entity upon behalf of which the acted, executed the instrument. WITNESS my hand and official seat' -X -af > ^ OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: jV\PmQv7!UYV-O rr~) QT ^Document Date:.Numberof Pages:~ Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: Kfly tVtOrxD \ D Individual D Corporate Officer — Title(s): D Partner — D Limited D General D Attorney-in-Fact D Trustee D Guardian or Conservator CvV RIGHT THUMBPRINT OF SIGNER Top of thumb here Signer Is Representing:^ © 1999 National Notary Association • 9350 De SotoAve., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll-Free 1-800-876-6827 44305 STATE OF CALIFORNIA COUNTY OF SAN DIEGO O ) ) ss. ) before me, the undersigned, a Notary Public, personally appeared , personally known to me (or proved to me on. tho baoio of satisfactory evidence) to be the person^ whose namej£) is/are-subscribed to the within instrument, and acknowledged to me that he/abe/they executed the same in his/hcr/thcir- authorized capacity(res), and that by his/hcr/thok signature(s$ on the instrument the person^, or the entity upon behalf of which the person^ acted, executed the instrument. WITNESS my hand and official seal. STATE OF CALIFORNIA COUNTY OF SAN DIEGO ) ) ss. ) GINGER'HITZKE "1- Comm. 11328600 ,iNOTARY PUBLIC.CALIFORNIA Ul San Wego County My Comm. Expires Nov. 5,2005 ' On _, before me, the undersigned, a Notary Public, 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 instrument. WITNESS my hand and official seal. 1010\16\222864.2 44306 EXHIBIT A Legal Description of the Property 1010\16\222864.2 44307 LEGAL DESCRIPTION ALL THAT PORTION OF FRACTIONAL NORTHEAST QUARTER OF SECTION 23, TOWNSHIP 12 SOUTH, RANGE 4 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEASTERLY CORNER OF THE SOUTH 10 ACRES OF SAID FRACTIONAL NORTHEAST QUARTER OF THE SOUTHWEST QUARTER; THENCE ALONG THE NORTHERLY LINE OF SAID SOUTH 10 ACRES WESTERLY TO AN INTERSECTION WITH THE EASTERLY LINE OF ROAD SURVEY NO. 1800-1, AS DESCRIBED IN A DEED TO THE COUNTY OF SAN DIEGO, RECORDED DECEMBER 18, 1969 AS FILE NO. 230092 OF OFFICIAL RECORDS; THENCE SOUTHERLY ALONG EASTERLY LINE OF SAID ROAD SURVEY NO. 1800-1 TO AN INTERSECTION WITH THE SOUTH LINE OF SAID SOUTH 10 ACRES; THENCE EASTERLY ALONG SAID SOUTH LINE TO THE EAST LINE OF SAID NORTHEAST QUARTER OF THE SOUTHWEST QUARTER; THENCE NORTHERLY ALONG SAID EAST LINE TO THE POINT OF BEGINNING. (APN: 215-020-27) DESCLTR-09/06/94bk GROUND LEASE By and Between THE CITY OF CARLSBAD and EL CAMINO FAMILY HOUSING PARTNERS, LLC 3( , 1010\01\209755.7 TABLE OF CONTENTS ARTICLE 1: DEFINITIONS AND EXHIBITS 1 Section 1.1 Definitions 1 Section 1.2 Exhibits 4 ARTICLE 2: LEASE OF THE PROPERTY; PAYMENT OF RENT; OWNERSHIP OF IMPROVEMENTS 5 Section 2.1 Lease of the Property 5 Section 2.2 Use 5 Section 2.3 Possession 5 Section 2.4 Lease Term 5 Section 2.5 Payment of Rent 5 Section 2.6 Reports and Accounting of Residual Receipts 7 Section 2.7 Title to Improvements; Surrender Upon Termination 8 Section 2.8 Assignment of Lessee's Leasehold Interest; Transfer of the Development 8 Section 2.9 Net-Net-Net Lease 8 ARTICLE 3: DEVELOPMENT OF IMPROVEMENTS 9 Section 3.1 Commencement of Construction 9 Section 3.2 Completion of Construction 9 Section 3.3 Construction Pursuant to Permits and Disposition Agreement 9 Section 3.4 Equal Opportunity 9 Section 3.5 Discharge of Liens 9 Section 3.6 Protection of the City 9 Section 3.7 Permits, Licenses and Easements 10 Section 3.8 Compliance with Applicable Law 10 Section 3.9 Prevailing Wage 10 Section 3.10 The Lessee to Furnish and Equip the Improvements 11 ARTICLE 4: USE AND MAINTENANCE OF THE IMPROVEMENTS 11 Section 4.1 Use of Development 11 Section 4.2 Compliance with the Regulatory Agreement 12 Section 4.3 Maintenance of the Development 12 Section 4.4 Utilities 12 Section 4.5 Taxes and Assessments 13 Section 4.6 Assistance in Making Payments 13 Section 4.7 Hazardous Materials 14 Section 4.8 Non-Discrimination 16 ARTICLE 5: APPROVED LOANS 17 Section 5.1 Loan Obligations 17 Section 5.2 Liens and Encumbrances Against Lessee's Interest in the Leasehold Estate. 17 1010\01\209755.7 TABLE OF CONTENTS (Continued) Section 5.3 Cost of Approved Loans to be Paid by Lessee 20 Section 5.4 Proceeds of Approved Loans 20 Section 5.5 Notice and Right to Cure Defaults Under Approved Loans 20 Section 5.6 Modifications 20 Section 5.7 Estoppel Certificates 20 ARTICLE 6: INSURANCE 20 Section 6.1 Required Insurance Coverage 20 Section 6.2 Insurance Policies and Premiums 21 Section 6.3 Proceeds of Insurance 21 Section 6.4 Indemnification 21 ARTICLE 7: CONDEMNATION, DAMAGE OR DESTRUCTION OF THE IMPROVEMENTS 22 Section 7.1 Condemnation 22 Section 7.2 Administration of Construction Fund in the Event of Condemnation, or Damage or Destruction of Development 23 Section 7.3 Lessee, City, Approved Lenders to be Made Parties in Legal Proceedings.. 24 Section 7.4 Termination 24 ARTICLE 8: ASSIGNMENT AND TRANSFERS 24 Section 8.1 Definitions 24 Section 8.2 Purpose of Restrictions on Transfer 25 Section 8.3 Prohibited Transfers 25 Section 8.4 Permitted Transfers 25 Section 8.5 Procedure for Approval of Certain Transfers 26 Section 8.6 Assignments 26 ARTICLE 9: REPRESENTATIONS AND ASSURANCES 27 Section 9.1 City to Give Peaceful Possession 27 Section 9.2 Lessee Representations 27 Section 9.3 Release of City 28 Section 9.4 Holding Over 28 Section 9.5 No Merger 29 ARTICLE 10: DEFAULTS AND REMEDIES 29 Section 10.1 Events of Default; Remedy for Default by Lessee 29 Section 10.2 Remedy for Default by City 31 ARTICLE 11: MISCELLANEOUS 31 Section 11.1 Instrument Is Entire Agreement 31 1010\01\209755.7 TABLE OF CONTENTS (Continued) Section 11.2 Notices 31 Section 11.3 Non-Liability of Officials, Employees and Agents 32 Section 11.4 Force Majeure 32 Section 11.5 Non-Waiver of Breach 32 Section 11.6 Binding Upon Successors; Covenants to Run With Land 32 Section 11.7 Employment Opportunity 33 Section 11.8 Relationship of Parties 33 Section 11.9 Titles 33 Section 11.10 Severability 33 Section 11.11 Applicable Law 33 Section 11.12 Venue 33 Section 11.13 Approvals 33 Section 11.14 Inspection of Books and Records 34 Section 11.15 Lease Binding on Successors 34 Section 11.16 Counterparts 34 EXHIBIT A Description of the Property EXHIBIT B Insurance Requirements EXHIBIT C Preliminary Title Report EXHIBIT D Rent Payment Schedule 1010\01\209755.7 GROUND LEASE THIS GROUND LEASE (the "Lease") is entered into as of , 2005, by and between The City of Carlsbad, a municipal corporation (the "City"), and El Camino Family Housing Partners, LLC, a California limited liability company (the "Lessee"), with reference to the following facts, purposes, and understandings. RECITALS A. These Recitals refer to and utilize certain capitalized terms that are defined in Article 1 of this Lease. The Parties intend to refer to those definitions in connection with the use of capitalized terms in these Recitals. B. The City owns that certain parcel of real property located in the City of Carlsbad, California, as more particularly described in the attached Exhibit A (the "Property"). C. The Lessee and the City entered into that certain Land Disposition and Loan Agreement dated as of March 16, 2005 (the "Disposition Agreement"), pursuant to which City agreed to lease the Property to Lessee and the Lessee agreed to develop the Property. D. In accordance with the Disposition Agreement and this Lease, the Lessee shall develop and operate on the Property a fifty-six (56) unit housing development affordable to very low income and moderate income households. E. The City desires to lease the Property to the Lessee, and the Lessee desires to lease the Property from the City, for a term specified in this Lease. WITH REFERENCE TO THE FACTS RECITED ABOVE, the City and the Lessee (collectively the "Parties") agree as follows: ARTICLE 1: DEFINITIONS AND EXHIBITS Section 1.1 Definitions. The following terms shall have the following meanings in this Lease: (a) "Affirmed" shall mean Affirmed Housing Group, a California Corporation. (b) "Agency" shall mean the Carlsbad Redevelopment Agency, a public body, corporate and politic, and its successors and assigns. (c) "Approved Lenders" shall mean all of the lenders providing the Approved Loans to the Lessee and their designees, nominees, successors and assigns. 1010\01\209755.7 (d) "Approved Loan Documents" shall mean all documents executed by the Lessee evidencing or securing the Approved Loans. (e) "Approved Loans" shall mean the loans contained in the Financing Plan submitted to the City by the Lessee as required by the Disposition Agreement and approved by the City, or any other loan obtained by the Lessee in connection with and secured by the Development and approved in writing by the City. (f) "Authorized Officers" shall mean, in the case of the City, its City Manager, and in the case of the Lessee, the president of Affirmed, the managing member of the Lessee. As of the date of this Lease, the President of Affirmed is Jim Silverwood. (g) "City" shall mean the City of Carlsbad, California, a municipal corporation, operating through its governing body, the City Council, and its various departments. (h) "City Loan" shall mean the loan of One Million Four Hundred Fifty-Four Thousand Two Hundred Seventy-Six Dollars ($1,454,276) by the City to the Developer pursuant to the Disposition Agreement. (i) "Commencement Date" shall mean the date of the Closing as defined in the Disposition Agreement. (j) "Development" shall mean the Improvements and the Lessee's leasehold interest in the Property. (k) "Development Documents" shall mean all construction documentation prepared by the Lessee or on the Lessee's behalf and approved by the City pursuant to the Disposition Agreement. (1) "Disposition Agreement" shall have the meaning given in Recital C. (m) "Event of Default" shall have the meaning specified in Section 10.1. (n) "Financing Plan" shall mean the Financing Plan approved by the City pursuant to the provisions of the Disposition Agreement. (o) "Foreclosure Transferee" shall mean a transferee who acquires the Lessee's interest in this Lease and the Development through the exercise of remedies (such as foreclosure or a deed in lieu of foreclosure) pursuant to Approved Loan Documents. (p) "Hazardous Materials" shall mean any substance, material, or waste which is: (1) defined as a "hazardous waste", "hazardous material," "hazardous substance," "extremely hazardous waste," "restricted hazardous waste," "pollutant" or any other terms comparable to the foregoing terms under any provision of California law or federal law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) mold; (7) MTBE; or (8) determined by California, federal or local government authority to be capable of posing a risk of injury to health, safety or property. Without limiting the foregoing, Hazardous Materials means 1010\01\209755.7 and includes any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, a hazardous, toxic or radioactive substance, or other similar term, by any Hazardous Materials Laws including any federal, state or local environmental statute, regulation or ordinance presently in effect that may be promulgated in the future, as such as statutes, regulations and ordinances may be amended from time to time. The term "Hazardous Materials" shall not include: (i) construction materials, gardening materials, household products, office supply products or janitorial supply products customarily used in the construction, maintenance, rehabilitation, or management of commercial properties, buildings and grounds, or typically used in household activities, or (ii) certain substances which may contain chemicals listed by the State of California pursuant to California Health & Safety Coded Section 25249.8 et seq., which substances are commonly used by a significant portion of the population living; within the region of the Improvements, including, but not limited to, alcoholic beverages, aspirin, tobacco products, Nutrasweet and saccharine, so long as such materials and substances are stored, used and disposed of in compliance with all applicable Hazardous Materials Laws. (q) "Hazardous Materials Laws" shall mean 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. (r) "Improvements" shall mean the fifty-six (56) housing units and appurtenant improvements to be constructed on the Property by the Lessee. (s) "Investor" shall mean BCP/E1 Camino, LLC, a Delaware limited liability company. (t) "Lease" shall mean this Ground Lease. (u) "Lease Term" shall mean the term of this Lease, which shall commence on the Commencement Date and shall terminate fifty-five (55) years after the Commencement Date. (v) "Lease Year" shall mean a period of twelve (12) full calendar months. The first Lease Year shall begin on the Commencement Date. Each succeeding Lease Year shall commence on the anniversary of the Commencement Date. (w) "Lessee" shall mean El Camino Family Housing Partners, LLC, a California limited liability company, and its permitted successors and assigns. (x) "Median Income" shall mean the median gross yearly income, adjusted for actual household size as specified herein, in the County of San Diego, California as determined by the California Department of Housing and Community Development. (y) "Memorandum of Lease" shall mean the memorandum of ground lease substantially in the form attached to the Disposition Agreement as Exhibit H. 1010\01\209755.7 (z) "Official Records" shall mean the Official Records of San Diego County, California. (aa) "Parties" shall mean the City and the Lessee. (bb) "Party" shall mean any one of the City or Lessee. (cc) "Preliminary Title Report" shall mean that certain title report dated August 10, 2005, issued by Chicago Title Company a copy of which is attached as Exhibit C. (dd) "Property" shall mean the property more particularly described in the attached Exhibit A. (ee) "Regulatory Agreement" shall mean that Regulatory Agreement and Declaration of Restrictive Covenants to be entered into by the City and the Lessee substantially in the form attached to the Disposition Agreement as Exhibit E. (ft) "Rent" shall mean the annual rent payment made to the City by the Lessee in the amount set forth in Exhibit D. and more particularly described in Section 2.5. (gg) "Rent Commencement Date" shall mean the first May 1st immediately following the calendar year in which the certificate of occupancy was issued by the City for the Improvements, or May 1, 2010, whichever is earlier. (hh) "Transfer" is defined in Section 8.1. (ii) "Very Low Income Households" shall mean a household whose income does not exceed the qualifying limits for a very low income household as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, adjusted for assumed household size. Section 1.2 Exhibits. The following exhibits are attached to and made part of this Lease: EXHIBIT A Legal Description of the Property EXHIBIT B Insurance Requirements EXHIBIT C Preliminary Title Report EXHIBIT D Rent Payment Schedule 1010\01\209755.7 ARTICLE 2: LEASE OF THE PROPERTY; PAYMENT OF RENT; OWNERSHIP OF IMPROVEMENTS S ection 2.1 Lease of the Property. (a) The City hereby leases the Property to the Lessee, and the Lessee hereby leases the Property from the City, pursuant to the terms of this Lease. (b) The Parties shall cause the Memorandum of Lease to be recorded against the Property in the Official Records substantially in the form attached to the Disposition Agreement as Exhibit H. (c) The closing costs associated with execution of this Lease and recordation of the Memorandum of Lease including, but not limited to recording charges, county documentary transfer tax, and conveyance taxes (if any) and the cost of the Lessee's title insurance policy shall be borne by the Lessee. Each Party shall bear its own attorneys' fees and costs. Section 2.2 Use. Subject to the provisions of this Lease, the Lessee shall use the Property for the redevelopment thereof and for the construction, development and operation of the Improvements on the Property in accordance with the restrictions and requirements set forth in Article 5 hereof. Section 2.3 Possession. The City agrees to and shall provide possession of the Property to the Lessee immediately following the Commencement Date. To the best of the City's knowledge, the Property is subject only to the encumbrances listed in the Preliminary Title Report and such encumbrances approved by the Parties and recorded concurrently with the Memorandum of Lease. The City shall convey the Property to the Lessee in the physical condition set forth in the Disposition Agreement. Section 2.4 Lease Term. Unless earlier terminated pursuant to the provisions of this Lease, the Lease Term shall be for the period commencing on the Commencement Date and terminating at midnight (12:00 a.m.) on the day immediately preceding the fifty-fifth (55th) anniversary of the Commencement Date. Section 2.5 Payment of Rent. The Lessee shall make annual lease payments to the City under this Lease as follows: (a) Commencing on the first May 1st immediately following the calendar year in which a certificate of occupancy was issued for the Improvements, and continuing through each May 1st thereafter throughout the Lease Term (each such May 1st is referred to as a "Payment Date"), the Lessee shall pay to the City an annual rent payments in the amount set forth for that year in Exhibit D, attached hereto and incorporated herein; provided, however, Rent payments in any year shall be payable only to the extent of the Rental Share of Residual Receipts (as defined below) from the previous calendar year. To the extent that the Rental Share of Residual Receipts, in any calendar year, is less than the Rent due in the subsequent calendar 1010\01\209755.7 year, as set forth in Exhibit D. then the unpaid balance of Rent due shall accrue (without interest) and shall be due and payable on subsequent Payment Dates from the Rental Share of Residual Receipts, until fully paid. Any accrued Rent payments remaining unpaid at the end of the Lease Term shall be paid in full no later than ninety (90) days preceding the end of the Lease Term. The Lessee shall accompany each payment of Rent with an audited financial statement (as described in Section 2.6 below). (b) Special Definitions. The following special definitions shall apply for purposes of this Section 2.5: (i) "Annual Operating Costs" with respect to a particular Lease Year shall mean the following costs reasonably and actually incurred for operation and maintenance of the Development to the extent that they are consistent with the annual budget for the Development, approved by the City pursuant to the Regulatory Agreement, and with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property taxes and assessments imposed on the Development; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Development) on loans associated with development of the Development and approved by the City in the Financing Plan pursuant to Section 2.4 of the Disposition Agreement; property management fees and reimbursements, not to exceed fees and reimbursements which are standard in the industry and pursuant to a management contract approved by the City pursuant to Sections 2.7 and 6.7 of the Disposition Agreement; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of occupancy fees required for operation of the Development; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Development in an amount not to exceed the amount required in connection with the permanent financing approved by the City pursuant to Section 2.4 of the Disposition Agreement, or by the City if no other lender or investor requires approvals of such amount; cash deposited into an operating reserve in an amount not to exceed the amount required in connection with the permanent financing approved by the City pursuant to Section 2.4 of the Disposition Agreement, or by the City if no other lender or investor requires approvals of such amount; payment of any previously unpaid portion of the Developer Fee due (without interest) not exceeding a cumulative amount of the Developer Fee as set forth in Section 5.8 of the Disposition Agreement; an annual asset management fee in the amount of Five Thousand Dollars ($5,000) (adjusted annually at 3.5% and which shall accrue if not paid); a partnership management fee in the amount of Twenty Five Thousand Dollars ($25,000) (adjusted annually at 3.5% and which shall accrue if not paid); extraordinary operating costs specifically approved in writing by the City as part of the annual budget approval process pursuant to the Regulatory Agreement; payments of deductibles in connection with casualty insurance claims not normally paid from reserves; the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves; and other ordinary and reasonable operating expenses approved in writing by the City and not listed above. Annual Operating Expenses shall not include the following: Rent paid by the Lessee to the City pursuant to this Agreement, depreciation, amortization, depletion or other non-cash expenses; any amount expended from a reserve account; and any capital cost with respect to the Development, as determined by the accountant for the Development. 1010\01\209755.7 (ii) "Gross Revenue" with respect to a particular Lease Year shall mean all revenue, income, receipts, and other consideration actually received from operation and leasing of the Development. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; net proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance and not paid to senior lenders; the proceeds of casualty insurance not used to rebuild the Development and not paid to senior lenders; and condemnation awards for a taking of part or all of the Development for a temporary period not paid to senior lenders. Gross Revenue shall not include tenants' security deposits, loan proceeds, capital contributions or similar advances. (iii) "Residual Receipts" in a particular calendar year means the amount by which Gross Revenue (as defined below) exceeds Annual Operating Costs (as defined below). (iv) "Rental Share of Residual Receipts" shall mean thirty percent (30%) of Residual Receipts. Section 2.6 Reports and Accounting of Residual Receipts. (a) Audited Financial Statement. In connection with the annual payment of Rent, the Lessee shall furnish to the City an audited statement duly certified by an independent firm of certified public accountants previously approved by the City in writing, setting forth in reasonable detail the computation and amount of Residual Receipts during the preceding calendar year. (b) Books and Records. The Lessee shall keep and maintain on the Property, or elsewhere with the City's written consent, full, complete and appropriate books, record and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Lessee's calculation of Residual Receipts. Books, records and accounts relating to Lessee's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Lease which provide for the calculation of Residual Receipts on a cash basis. All such books, records, and accounts shall be open to and available for inspection by the City, its auditors or other authorized representatives at reasonable intervals during normal business hours upon reasonable notice to the Lessee. Copies of all tax returns and other reports that Lessee may be required to furnish any governmental agency shall at all reasonable times be open for inspection by the City at the place that the books, records and accounts of the Lessee are kept. The Lessee shall preserve records on which any statement of Residual Receipts is based for a period of not less than five (5) years after such statement is rendered, and for any period during which there is an audit undertaken pursuant to subsection (c) below then pending. (c) City Audits. The receipt by the City of any statement pursuant to subsection (a) above or any payment by Lessee or acceptance by the City of Rent for a Lease 1010\01\209755.7 Year shall not bind the City as to the correctness of such statement or such payment. Within three (3) years after the receipt of any such statement, the City or any designated agent or employee of the City at any time shall be entitled to audit the Residual Receipts and all books, records, and accounts pertaining thereto. Such audit shall be conducted during normal business hours at the principal place of business of Lessee and other places where records are kept. Immediately after the completion of an audit, the City shall deliver a copy of the results of such audit to Lessee. If it shall be determined as a result of such audit that there has been a deficiency in a Rent payment to the City, then such deficiency shall become immediately due and payable with interest at the rate often percent (10%) per annum, determined as of and accruing from the date that said payment should have been made. In addition, if Lessee's auditor's statement for any calendar year shall be found to have understated Residual Receipts by more than five percent (5%) and the City is entitled to any additional Rent payments as a result of said understatement, then Lessee shall pay, in addition to the interest charges referenced hereinabove, all of the City's reasonable costs and expenses connected with any audit or review of Lessee's accounts and records. Section 2.7 Title to Improvements: Surrender Upon Termination. The City hereby grants to the Lessee, without warranty (express or implied), any right, title, or interest that the City may have in the improvements located on the Property from time to time prior to the termination of this Lease. The Improvements on the Property during the Lease Term shall be and remain the property of the Lessee; however, the Lessee shall have no right to destroy, demolish or remove the Improvements except as specifically provided for in this Lease or as otherwise approved in writing by the City. When the Lease Term expires, or when the Lease is otherwise terminated under the terms of this Lease the Lessee shall surrender the Property and deliver to the City the Property (including all Improvements thereon) and title to the Improvements shall revert to and vest in the City without cost to the City in their then-existing condition. It is the intent of the Parties that this Lease shall create a constructive notice of severance of the Improvements from the Property without the necessity of a deed from the City to the 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. If requested by the City, the Lessee shall execute, at the end of the Lease Term, within ten (10) days of receipt of the City's written request, a confirmatory quitclaim deed of the Improvements to be recorded at the City's option and expense, and any other documents that may be reasonably required by the City or the City's title company to provide the City title to the Property and the Improvements free and clear of all monetary liens and monetary encumbrances not caused or agreed to by the City, but otherwise in their "as-is" condition. Section 2.8 Assignment of Lessee's Leasehold Interest: Transfer of the Development. Subject the provisions of Article 8, the Lessee may not assign its interest in this Lease and sell or transfer the Development without the prior written consent of the City. Section 2.9 Net-Net-Net Lease. This Lease is a net-net-net lease, and Rent and other payments payable to or on behalf of the City shall: (a) be paid without notice or demand and without offset, counterclaim, abatement, suspension, deferment, deduction or defense; and (b) be an absolute net return to the City, free and clear of any expenses, charges or offsets whatsoever. 1010\01\209755.7 ARTICLE 3: DEVELOPMENT OF IMPROVEMENTS Section 3.1 Commencement of Construction. The Lessee shall commence construction of the Improvements no later than the time specified in the Disposition Agreement. Section 3.2 Completion of Construction. The Lessee shall prosecute diligently to completion the construction of the Improvements, and shall complete construction by the time specified in the Disposition Agreement. Section 3.3 Construction Pursuant to Permits and Disposition Agreement. The Improvements shall be constructed in accordance with the Development Documents and the terms and conditions of the City of Carlsbad's land use permits and approvals and building permits. Section 3.4 Equal Opportunity. 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. Section 3.5 Discharge of Liens. The Lessee shall not create or permit or suffer to be created or to remain, and will discharge, any lien (including, but not limited to, the liens of mechanics, laborers, materialmen, suppliers or vendors for work or materials alleged to be done or furnished in connection with the Property and the Improvements thereon), encumbrances or other charge upon the Property and the Improvements thereon, or any part thereof, or upon the Lessee's leasehold interest therein. The Lessee shall have the right to contest in good faith and by appropriate legal proceedings the validity or amount of any mechanics', laborers', materialmen's, suppliers' or vendors' lien or claimed lien; provided that the Lessee shall utilize all reasonable means (including the posting of adequate security for payment) to protect the Property and any part thereof or the Improvements thereon against foreclosure, and shall indemnify and hold harmless the City from any adverse effects resulting from such lien. Section 3.6 Protection of the City. Nothing in this Lease shall be construed as constituting the consent of the City, expressed or implied, to the performance of any labor or the furnishing of any materials or any specific improvements, alterations of or repairs to the Property or the Improvements thereon, or any part thereof, by any contractor, subcontractor, laborer or materialman, nor as giving the Lessee or any other person any right, power or authority to act as agent of or to contract for, or permit the rendering of, any services or the furnishing of any materials in such manner as would give rise to the filing of mechanics' liens or other claims against the fee interest of the Property or the Improvements thereon. The City shall have the right at all reasonable times to post and keep posted on the Property any notices which the City may deem necessary for the protection of the City and of the Property and the Improvements thereon from mechanics' liens or other claims. In addition, the Lessee shall make, or cause to be made, prompt payment of all monies due and legally owing to all persons doing any work or furnishing any materials or supplies to the Lessee, or any of its respective contractors or subcontractors in connection with the Property and the Improvements thereon. 1010\01\209755.7 Section 3.7 Permits. Licenses and Easements. Within ten (10) days after receipt of written request from the Lessee, the City shall (at no expense to the City) join in any and all applications (consistent with the Disposition Agreement) for permits, licenses or other authorizations required by any governmental or other body claiming jurisdiction in connection with any work that 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. Section 3.8 Compliance with Applicable Law. The Lessee shall cause all work performed in connection with construction of the Development to be performed in compliance with (a) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, and (b) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and the Lessee shall be responsible to the City for the procurement and maintenance thereof, as may be required of the Lessee and all entities engaged in work on the Property. Section 3.9 Prevailing Wage. The Lessee shall and shall cause the contractor and subcontractors to pay prevailing wages in the construction of the Improvements as those wages are determined pursuant to Labor Code Sections 1720 et seq., and the implementing regulations of the Department of Industrial Relations (the "DIR"), to employ apprentices as required by Labor Code Section 1777.5 et seq., and comply with the other applicable provisions of Labor Code Sections 1720 et seq., and the implementing regulations of the DIR. The Lessee shall and shall cause the contractor and subcontractors to keep and retain such records as are necessary to determine if such prevailing wages have been paid as required pursuant to Labor Code Sections 1720 et seq., and that apprentices have been employed as required by Labor Code Section 1777.5 et seq. Copies of the currently applicable per diem prevailing wages are available from the City. During the construction of the Improvements, Lessee shall or shall cause the contractor to post at the Property the applicable prevailing rates of per diem wages. Lessee shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the City) the Agency and the City against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including the Lessee, its contractor and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices as required by Labor Code Section 1777.5 et seq., and the implementing regulations of the DIR or comply with the other applicable provisions of Labor Code Sections 1720 et seq., and the implementing regulations of the DIR in connection with construction of the Improvements or any other work undertaken or in connection with the Property. In the event that Labor Code Section 1720, et seq., is amended, or otherwise reinterpreted by the DIR, so that the requirements of Labor Code Section 1720, et seq., including but not limited to the payment of prevailing wages and the requirement to employ apprentices in accordance with Labor Codes Sections 1777.5 et seq., are no longer applicable to the construction of the Improvements, then this provision shall be of no further force and effect; 1010\01\209755.7 10 provided that the Lessee's obligation to indemnify the City as set forth in this Section 3.9 shall remain in effect throughout the Term. Section 3.10 The Lessee to Furnish and Equip the Improvements. Upon completion of construction of the Improvements, the Lessee covenants and agrees to furnish and equip the Improvements, with all fixtures, furnishings, equipment and other personal property (collectively, the "Personal Property") of a quantity as necessary to operate a first class housing development in accordance with the standards set forth in this Lease and the Regulatory Agreement. The Lessee further agrees to take good care of such Personal Property, to keep the same in good order and condition ordinary wear and tear excepted, and promptly, at the Lessee's own cost and expense, to make all necessary repairs, replacements and renewals thereof. As used in this Lease, the term "Personal Property" includes all such replacements and renewals, and all fixtures, furnishings, equipment and other personal property of the Lessee located in, on or about the Property and the Improvements thereon. Any and all fixtures, furnishings, equipment and other personal property placed in, on or about the Property shall be the Personal Property of the Lessee during the Lease Term. ARTICLE 4: USE AND MAINTENANCE OF THE IMPROVEMENTS Section 4.1 Use of Development. (a) During the Lease Term, the Lessee shall at all times during the Lease Term use and operate the Development in accordance with this Lease, the Disposition Agreement, the Regulatory Agreement, and all requirements of the Approved Loan Documents. Any use of the Property for any other purpose other than the operation of the Improvements in accordance with the Regulatory Agreement or any proposed "Major Additional Improvements" to the Property shall be subject to the City's prior written approval, which may be granted or denied in the City's sole discretion. For the purposes of this Section 4.1 the term "Major Additional Improvements" means any of the following: (1) any new buildings, structures or outdoor facilities other than the Improvements to be located on the Property, (2) any substantial alterations, remodeling or rehabilitation of the Improvements, (3) construction of additional spaces or facilities, or (4) any other alteration, construction, remodeling or reconstruction on the Property with a cost in excess of Twenty-Five Thousand Dollars ($25,000). (b) During the Lease Term, the Lessee shall comply with all applicable and lawful statutes, rules, orders, ordinances, requirements, and regulations of the United States, the State of California, and any other governmental authority having jurisdiction over the Development; however, the Lessee may, in good faith and on reasonable grounds, dispute the applicability 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. The Lessee agrees that any such contest shall be prosecuted to a final conclusion as promptly as reasonably possible. (c) The Lessee shall: 1010\01\209755.7 \ \ (i) use the Development only to provide proper housing facilities and ancillary uses to tenants, and to maintain the character of the Development as required by this Lease, the Regulatory Agreement and any Approved Loan Documents for so long as such agreements remain in effect, and shall not use the Development for any disorderly or unlawful purpose; (ii) use reasonable efforts to prevent any residential tenant from committing or maintaining any nuisance or unlawful conduct on or about the Development; (iii) use reasonable efforts to prevent any residential tenant from violating any of the covenants and conditions of this Lease with respect to the Development; (iv) use reasonable efforts to abate any violation of this Lease by any residential tenant upon notice from the City; (v) subject to any applicable laws of the State of California and the rights of residential tenants in the Development, permit the City and its agents to inspect the Development at any reasonable time during the Lease Term; and (vi) Not commit or suffer to be committed any waste in, on or about the Property. Section 4.2 Compliance with the Regulatory Agreement. The Lessee hereby agrees that, for the term of the Regulatory Agreement, the Development will be used only for residential uses consistent with this Lease and the Regulatory Agreement. A portion of the residential units shall be rented to and occupied by or, if vacant, available for occupancy by Very Low Income Households and other households as set forth in the Regulatory Agreement. Section 4.3 Maintenance of the Development. The Lessee shall cause the Property and the Development to be well maintained and repaired in a condition reasonably acceptable to the City during the Lease Term, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repairs as may be necessary. 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 City shall have the right, upon reasonable notice to the Lessee, to enter the Development to make inspections to determine the Lessee's compliance with this Section 4.3. The City shall have additional rights and remedies regarding maintenance as set forth in the Regulatory Agreement. As between the City and the Lessee, all costs incurred in the operation and maintenance of the Improvements shall be paid by the Lessee. Section 4.4 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 the Lessee shall pay or cause utility costs to be paid currently and as due. 1010\01\209755.7 12 Section 4.5 Taxes and Assessments. (a) Payment of Taxes and Assessments. The Lessee shall, during the entire Lease Term, at its own cost and expense, 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 Property, the Improvements, or any part of the Property or Improvements, or upon the Lessee's leasehold interest in the Property 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 Property, the Improvements, or any part of the Property or Improvements, or upon the Lessee's leasehold interest in the Property pursuant to this Lease. During the Lease Term, the Lessee shall not apply for, or obtain, an exemption from real property taxes for the Property, or the Lessee's interest in the Property, pursuant to Revenue and Taxation Code 214(g) or any other applicable local or state regulation. The Lessee acknowledges that, pursuant to Revenue and Taxation Code Section 107.6, the Lessee's leasehold interest in the Property created pursuant to this Lease may be subject to the payment of property taxes levied against the Lessee's leasehold interest and the Lessee shall be responsible for the payment of all such property taxes. (b) Payment of Fees. During the entire Lease Term, the Lessee shall pay, at its own cost and expense, before any fine, penalty, interest, or other charge may be added for nonpayment, all license and permit fees, charges for public utilities, and governmental charges relating to the use or occupancy of the Improvements. (c) Copies of Notices to Lessee. The City shall promptly 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 4.5. (d) The City's Right Cure. If the Lessee, in violation of the provisions of this Lease, shall fail to pay and to discharge any taxes, or any other fee, the City may (but shall not be obligated to) pay or discharge such taxes, and the amount paid by the City and the amount of all costs, expenses, interest and penalties connected therewith, including attorneys' fees, together with interest at the set forth in Section 2.6(c) shall be deemed to be and shall, upon demand of the City, be payable by the Lessee as repayment of such advance by the City. Section 4.6 Assistance in Making Payments. The parties acknowledge that Lessee is responsible under this Lease for making various payments to third parties, such as tax and utility payments in accordance with the provisions of this Article 4, In case any person or entity to whom any sum is directly payable by the Lessee under any of the provisions of this Lease (e.g., a tax collector or utility company) shall refuse to accept payment of such sum from the Lessee (due to the fact that the Lessee is not the fee owner of the Property or for any other reason), the Lessee shall thereupon give written notice of such fact to the City and shall pay such sum 1010\01\209755.7 13 directly to City at the address specified in Section 11.1 hereof, and City shall thereupon pay such sum to such person or entity. Section 4.7 Hazardous Materials. (a) Covenants and Agreements. The Lessee hereby covenants and agrees that: (i) The Lessee shall not knowingly permit the Development or the Property 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 Property or the Development in violation of any applicable law; (ii) The Lessee shall keep and maintain the Property and the Development and each portion thereof in compliance with, and shall not cause or permit the Property and the Development or any portion thereof to be in violation of, any Hazardous Materials Laws; (iii) Upon receiving actual knowledge of the same the Lessee shall immediately advise the City 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 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 "Hazardous Materials Claims"); (C) the presence of any Hazardous Materials in, on or under the Property or the Development in such quantities which require reporting to a government agency; or (D) the Lessee's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Development classified as "borderzone property" under the provisions of California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Development under any Hazardous Materials Laws. If the City reasonably determines that the Lessee is not adequately responding to a Hazardous Material Claim, the City 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 such Hazardous Materials Claims and to have its reasonable attorney's fees in connection therewith paid by the Lessee. (iv) Without the City's prior written consent, which shall not be unreasonably withheld or delayed, 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. 1010\01\209755.7 14 (b) Indemnity. Without limiting the generality of the indemnification set forth in Section 6.4, the Lessee hereby agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the City) the Agency, the City, their board members and councilmember's, officers, and employees from and against any and all claims, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action requirements, enforcement actions of any kind, and all costs and expenses incurred in connection therewith (including, but not limited to, attorney's fees and expenses), arising directly or indirectly, in whole or in part, out of: (1) the failure of the Lessee or any other person or entity, during the Lease Term, to comply with any Hazardous Materials Law relating in any way whatsoever to the handling, treatment, presence, removal, storage, decontamination, cleanup, transportation or disposal of Hazardous Materials into, on, under or from the Development; (2) the presence in, on or under the Property or the Development of any Hazardous Materials or any releases or discharges during the Lease Term of any Hazardous Materials into, on, under or from the Property or the Development; or (3) any activity carried on or undertaken on or off the Property or the Development, during the Lease Term, and whether by the Lessee or any employees, agents, contractors or subcontractors of the Lessee, or any third persons occupying or present on the Property or the Development, in connection with the handling, treatment, removal, storage, decontamination, cleanup, transport or disposal of any Hazardous Materials located or present on or under the Development (collectively "Indemnification Claims"). The foregoing indemnity shall further apply to any residual contamination on or under the Property or the Development, or affecting any natural resources, and to any contamination of any property or natural resources arising in connection with the Indemnification Claims and irrespective of whether any of such activities were or will be undertaken in accordance with Hazardous Materials Laws; provided, however, the foregoing indemnity shall not apply to any Indemnification Claims arising directly or indirectly, in whole or in part, from the City's gross negligence or willful misconduct. This obligation to indemnify, set forth in this Section 4.7(b) shall survive termination of this Lease. (c) No Limitation. The Lessee hereby acknowledges and agrees that the Lessee's duties, obligations and liabilities under this Lease, including, without limitation, under subsection (b) above, are in no way limited or otherwise affected by any information the City may have concerning the Development and/or the presence within the Development of any Hazardous Materials, whether the City obtained such information from the Lessee or from its own investigations. (d) Environmental Work. The Lessee shall be responsible for performing the work of any investigation and remediation that may be required by applicable law on the Property in order to develop the Development. The determination as to whether any such remediation is needed, and as to the scope and methodology thereof, shall be made by mutual agreement of the governmental agency with responsibility for monitoring such remediation and the City and the Lessee. The Lessee shall notify the City promptly upon discovery of any actionable levels of Hazardous Materials, and upon any release thereof, and shall consult with the City in order to establish the extent of remediation to be undertaken and the procedures by which remediation thereof shall take place. The Lessee shall comply with, and shall cause its agents and contractors to comply with, all laws regarding the use, removal, storage, transportation, disposal and remediation of Hazardous Substances. The investigation and 1010\01\209755.7 15 remediation work shall be carried out in accordance with all applicable laws (including Hazardous Materials Laws) and such other procedures and processes as may be described in this Lease. Section 4.8 Non-Discrimination. The Lessee shall not, in the selection or approval of tenants or provision of services or in any other matter relating to the development and operation of the Development, 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. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or no segregation clause: (a) In deeds: "The grantee herein, covenants by and for the grantee, the grantee's heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, age, handicap, martial status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. (b) In leases: "The lessee herein covenants by and for the lessee, the lessee's heirs, executors, administrators and assigns, and all persons claiming under or through the lessee, and this lease is made and accepted upon and subject to the following conditions. "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, age, handicap, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee, or any person claiming under or through the lessee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, age, handicap, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee, or any person claiming under or through the transferee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 1010\01\209755.7 16 ARTICLES: APPROVED LOANS Section 5.1 Loan Obligations. Nothing contained in this Lease shall relieve the Lessee of its obligations and responsibilities under any Approved Loans to operate the Development as set forth in the applicable Approved Loan Documents. Section 5.2 Liens and Encumbrances Against Lessee's Interest in the Leasehold Estate. (a) Lessee shall have the right to encumber the leasehold estate created by this Lease and the Improvements with the lien or liens securing one or more Approved Loans, subject to the City's review and prior approval of the Approved Loan Documents which approval shall not be unreasonably withheld or conditioned. Within fifteen (15) days following receipt of the proposed Approved Loan Documents along with Lessee's written notice requesting approval of such documents, the City shall review and either approve or disapprove the Approved Loan Documents. (b) The Lessee shall have the right, to encumber the City's interest in the Property and the Improvements with a lien of an Approved Loan only upon the prior written approval of the City which may be granted or denied in the City's sole discretion. (c) For as long as there is any lien securing any Approved Loans: (i) The City shall not agree to any mutual termination or accept any surrender of this Lease, nor shall the City consent to any amendment or modification of this Lease, without prior written consent of all Approved Lenders that have an outstanding Approved Loan. Notwithstanding any default by the Lessee under this Lease, the City shall have no right to terminate this Lease unless the City has given all Approved Lenders which have an outstanding Approved Loan and the Investor written notice of such default pursuant to the requirement of Sections 5.2(c)(vi) and 11.2 and the Investor and such Approved Lenders have failed to remedy such default or acquire the 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, subsection 5.2(c), as applicable. If the City receives competing or conflicting offers to cure any default, then the City shall accept the offers to cure in the following order: first, the Lessee, then each Approved Lender in the relative priority of their respective deeds of trust, and then the Investor. Notwithstanding the foregoing, an Approved Lender shall not be required to obtain possession or commence or continue foreclosure proceedings as a prerequisite to curing a default by the Lessee. (ii) Any Approved Lender which has an outstanding Approved Loan or the Investor shall have the right, but not the obligation, at any time to pay any or all of the Rent due pursuant to the terms of this Lease, and do any other act or thing required of the Lessee 1010\01\209755.7 17 by the terms of this Lease, to prevent termination of this Lease. Each Approved Lender and the Investor shall have thirty (30) days after receipt of notice from the City 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 been if made and performed by the Lessee instead of by the Approved Lender(s) or the Investor and the costs thereof may be added to the security interest and the lien securing the Approved Loans(s) thereof. (iii) In addition to the cure period provided in paragraph (ii) 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 thirty (30)-day period within which to remedy such default, provided that (A) such Approved Lender has fully cured any default in the payment of any monetary obligations of the Lessee under this Lease within such thirty (30)-day period and shall continue to pay currently such monetary obligations when the same are due, (B) such Approved Lender has acquired the 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 (C) after gaining possession of the Development, the Approved Lender has cured all non-monetary defaults capable of cure by the Approved Lender and performed all obligations of the Lessee capable of performance by the Approved Lender when the obligations are due. (iv) Any default under this Lease which by its nature cannot be remedied by any Approved Lender shall be deemed to be remedied if (A) within thirty (30) days after receiving written notice from the City describing the default, or prior thereto, any Approved Lender has acquired the Lessee's leasehold estate or commenced foreclosure or other appropriate proceedings, (B) the Approved Lender diligently prosecutes any such proceedings to completion, (C) the Approved Lender has fully cured any default in the payment of any monetary obligations of Lessee hereunder which does not require possession of the Development, and (D) after gaining possession of the Development, the Approved Lender performs all other obligations of Lessee hereunder capable of performance by the Approved Lender when the obligations are due. (v) If Approved Lenders are prohibited, stayed, or enjoined by any bankruptcy, insolvency, or other judicial proceedings involving the Lessee from commencing or prosecuting foreclosure or other appropriate proceedings, then the times specified for commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of such prohibition, so long as the Approved Lender claiming the extension has fully cured any default in the payment of any monetary obligations of Lessee under this Lease, continues to pay currently such monetary obligations when the same fall due, and does not interfere with the City's efforts to seek compliance by the Lessee with any non-monetary obligation under this Lease. (vi) The City shall mail or deliver to any Approved Lenders which have any outstanding Approved Loan and the Investor a duplicate copy of all notices which the City may from time to time give to the Lessee pursuant to this Lease. All notices delivered by the City to any Approved Lenders or the Investor shall also comply with the notice provisions of Section 11.2. 1010\01\209755.7 18 The conveyance of the Lessee's interest in the Development to a Foreclosure Transferee by means of a foreclosure or a deed in lieu of foreclosure shall not be subject to the City's prior consent. In the event Foreclosure Transferee becomes the Lessee under this Lease by means of foreclosure or deed in lieu of foreclosure or pursuant to any new lease obtained under subsection (viii) below, the City shall recognize the Foreclosure Transferee and the Foreclosure Transferee shall be personally liable under this Lease or such new lease only for the period of time that the Foreclosure Transferee remains the lessee. Nothing in this section obligates any Foreclosure Transferee to remedy any default of the 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 the Approved Lender to the City. If any Foreclosure Transferee shall acquire the Lessee's interest in the Development, such Foreclosure Transferee shall thereafter have the right to assign or transfer such interest in the Development to an assignee, subject to the consent provisions of Article 8 below. The Foreclosure Transferee shall be released and relieved of any liability under this Lease for acts occurring after the assignment and under any other document entered into in connection herewith upon assignment of all of the Foreclosure Transferee's interest in the Development. (vii) If a Foreclosure Transferee becomes the legal owner of the leasehold estate, and upon written request by the Foreclosure Transferee or its permitted transferee within sixty (60) days after becoming the legal owner of the leasehold estate, the City shall enter into a new lease of the Property with the Foreclosure Transferee or its permitted 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 the Lessee prior to termination) as are contained in this Lease and with priority equal to this Lease, so long as the Foreclosure Transferee or its permitted transferee promptly cures any existing defaults by the Lessee susceptible to cure by the Foreclosure Transferee or its permitted transferee. (viii) If this Lease is terminated by a bankruptcy proceeding, foreclosure, or by other operation of law, then the City shall, upon request by an Approved Lender or its permitted transferee, execute a new lease of the Property to the Approved Lender or other transferee, as the case may be, on the same terms and conditions as this Lease, except that the term will commence on the date of the new lease and will continue for the remaining unexpired term of this Lease. If the City receives conflicting requests for a new lease of the Property, then the City shall execute a new lease of the Property with the requesting Approved Lender having the most senior deed of trust. (ix) The City 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. The City shall execute and deliver (and acknowledge, if necessary, for recording purposes) any agreement 1010\01\209755.7 19 necessary to effect any such amendment, so long as such amendment does not in any way affect the Lease Term or Rent under this Lease or otherwise in any material respect adversely affect any rights of the City under this Lease. Section 5.3 Cost of Approved Loans to be Paid by Lessee. The Lessee shall bear all of the costs and expenses in connection with (a) the preparation and securing of the Approved Loans, (b) the delivery of any instruments and documents and their filing and recording, if required, and (c) all taxes and charges payable in connection with the Approved Loans. Section 5.4 Proceeds of Approved Loans. All Approved Loan proceeds shall be paid to and become the property of the Lessee, and the City shall have no right to receive any such Approved Loan proceeds. Section 5.5 Notice and Right to Cure Defaults Under Approved Loans. Lessee shall include in all Approved Loan Documents that in the event of default by the Lessee under an Approved Loan, notice shall be given to the City at the same time given to the Lessee, and the City shall have the right, but not the obligation, to cure the default with a cure period which extends not less than thirty (30) days beyond the cure period provided to the Lessee under the applicable Approved Loan Document. Any payments made by the City to cure a default shall be treated as Rent due from the Lessee, which shall be paid within thirty (30) days of the date on which the payment was made by the City. Section 5.6 Modifications. If an Approved Lender should, as a condition of providing financing for development of all or a portion of the Development, request any modification of this Lease in order to protect its interests in the Development or this Lease, the City shall consider such request in good faith consistent with the purpose and intent of this Lease and the rights and obligations of the Parties under this Lease. Sections.? Estoppel Certificates. The City and the Lessee agree that at any time and from time to time upon not less than twenty (20) days' prior written notice by the other party, or upon request from the Investor or any Approved Lender or a permitted assignee or other interested party, the City or the Tenant will execute, acknowledge and deliver to the other party or to such other parties a statement in writing certifying (a) that this Lease is unmodified and in full force and effect; (b) the date through which the Rent has been paid; and (c) that, to the knowledge of the certifier (if such be the case), there is no default, set-off, defense or other claim against the City or the Lessee, as applicable, other than those, if any, so specified under the provisions of this Lease. It is intended that any such statement may be relied upon by any persons proposing to acquire the interest of the City, the Lessee or any Approved Lender or the Investor, as the case may be, in this Lease or by any assignee of any Approved Lender. ARTICLE 6: INSURANCE Section 6.1 Required Insurance Coverage. The Lessee shall furnish to the City the type and amounts of insurance specified in Exhibit B. The Agency and the City shall be named as additional insureds on the policies specified in Exhibit B. The Lessee shall insure that all 1010\01\209755.7 20 worker compensation insurance policies carried by the general contractor and subcontractors working on the Development include a waiver of subrogation in favor of the Agency and the City. Section 6.2 Insurance Policies and Premiums. (a) All liability policies required by this Lease or any Approved Loan Document shall comply with the requirements set forth in Exhibit B. (b) Insurance shall be placed with insurers with a current Best Rating of no less than A:VII. Any deductible or self-insured retention shall be disclosed to and approved by the City. (c) The Lessee shall furnish the City with certificates and original endorsements effecting the required coverage promptly upon request. The endorsements shall be signed by persons authorized by the insurer to bind coverage on its behalf. The endorsements shall be on forms provided by the City or as approved by the City. If the Lessee does not keep all required insurance policies in full force and effect, then the City may, in addition to other remedies under this Lease, and upon not less than fifteen (15) days prior written notice and the failure of the Lessee to obtain such insurance within such fifteen (15)-day period, take out the necessary insurance, and the Lessee shall pay the cost of such insurance. (d) Promptly upon the City's request from time to time during the Lease Term, the Lessee shall increase the amount of the insurance policies, or otherwise modify such policies set forth in Exhibit B. Section 6.3 Proceeds of Insurance. (a) For so long as any Approved Loan on the Development is outstanding, the disposition of all commercial property insurance (including builder's risk) proceeds shall be governed by the Approved Loan Documents. If the Improvements are not repaired or rebuilt, all such proceeds shall be applied in a manner consistent with the terms of the Approved Loans, with any conflicts resolved in accordance with the relative priority of their respective deeds trust. (b) If the Lessee fails to agree in writing within thirty (30) days after payment of the proceeds of insurance that such repair or rebuilding is economically feasible and the Improvements as so restored will be economically viable, then within an additional sixty (60) days, Lessee shall commence to demolish and clear the Property of the Improvements, unless otherwise directed by the City, and this Lease shall terminate at the option of the City upon the completion of the clearance of the Property by the Lessee. Section 6.4 Indemnification. The Lessee agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the City) the City, its council members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of the Lessee's performance or non-performance under this Lease, or any other agreement executed pursuant to this Lease, or arising out of acts or omissions 1010\01\209755.7 21 of any of Lessee's contractors, subcontractors, or persons claiming under any of the aforesaid, except as directly caused by the City 's willful misconduct or gross negligence. The provisions of this section shall survive expiration of the Lease Term or other termination of this Lease, and shall remain in full force and effect. ARTICLE 7: CONDEMNATION, DAMAGE OR DESTRUCTION OF THE IMPROVEMENTS Section 7.1 Condemnation. If the Improvements or the Property or any part thereof is 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, then the City and Lessee shall request that awards and other payments on account of a taking of the Improvements and the Property (less costs, fees and expenses incurred by the City and Lessee in connection with the collection thereof) be divided by the presiding court between loss of value of the fee interest in the Property and loss of value of the Improvements and the leasehold interest in the Property. In any case, subject to the rights of Approved Lenders under the Approved Loan Documents (with any conflicts resolved in accordance with the relative priority of their respective deeds of trust), such awards and payments shall be applied as follows: (a) Net awards and payments received on account of a partial taking of the Improvements, other than a taking for a temporary use not exceeding one (1) year, shall be allocated and paid in the following order of priority: (i) If the Lessee reasonably believes restoration is economically feasible, and unless the Approved Lenders under the Approved Loan Documents require that the proceeds be applied to the outstanding indebtedness under the Approved Loans, first, to pay the cost of restoration of the Improvements, provided that the extent of the Lessee's obligations to restore the Improvements shall be limited to the amount of the net award and payment received by and available to Lessee on account of the taking. In such event, the condemnation proceeds shall be paid into the Construction Fund described in Section 7.2 below, subject to the rights of Approved Lenders to collect and disburse such funds. (ii) Second (or first if (i) the Lessee does not believe that restoration is economically feasible or viable as described above, or (ii) the Approved Lender(s) under the Approved Loan Documents require(s) that such proceeds be applied to the outstanding indebtedness under the Approved Loan(s)) to any Approved Lenders (in the order of their respective lien priority, if there is more than one Approved Lender) in an amount necessary to reduce the outstanding indebtedness under the approved Loan(s) to the extent required by the Approved Lender(s). (iii) The balance, if any, shall be divided between the City and the Lessee in the manner specified in subparagraph (e) below. (b) Net awards and payments received on account of a partial or total taking of only the City's fee interest in the Property or the reversionary interest in the Improvements (that is, a taking of the City's fee interest in the Property or the City's reversionary interest in the 1010\01\209755.7 22 Improvements that has no effect on the value of the Lessee's leasehold interest in the Property or the Lessee's fee interest in the Improvements), including severance damages, shall be paid to the City which amount shall be free and clear of any claims of the Lessee, or any other persons claiming rights to the Property through or under the Lessee. (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 the Lessee; however, if such taking for temporary use has resulted in any damage to or destruction of the Development, then such net awards and payments shall be first applied to pay the cost of restoration 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 the City. (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: (i) 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 up to the total amount of such awards and payments; (ii) The balance, if any, shall be divided between the City and the Lessee in the manner specified in subparagraph (e) below. (e) For purposes of subsections (a)(iii) and (d)(ii) above, proceeds shall be paid in the following manner: first, the Lessee shall receive reimbursement for any funds it has reasonably expended for repair and/or reconstruction of the Development (other than funds received from Approved Lenders). Second, the balance, if any, shall be paid to the Lessee and the City pari passu. The Lessee shall receive the portion of the payment attributable the Improvements, Lessee's leasehold interest, and Lessee's trade fixtures and personal property. The City shall receive the portion of the payment attributable to the City's fee interest in the Property and the City's reversionary interest in the Improvements. (f) The Lessee shall receive any award granted for or allocated to trade fixtures, moving expenses or loss of business. Section 7.2 Administration of Construction Fund in the Event of Condemnation, or Damage or Destruction of Development. If the Approved Loans have been paid in full, and if the Improvements, or any part of it, is to be repaired or reconstructed after damage or destruction or condemnation, then all proceeds collected under any and all policies of insurance referred to in Article 6 above covering 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 during such repairing or reconstructing (the "Construction Fund"). Any surplus of such insurance or condemnation proceeds remaining in the Construction Fund 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 this Article 7. 1010\01\209755.7 23 Section 7.3 Lessee. City. Approved Lenders to be Made Parties in Legal Proceedings. (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 resulting proceeds shall be paid to the Approved Lenders for application or disbursement in accordance with the Approved Loan Documents (in the order of their respective lien priority, if there is more than one such Approved Lender). The Lessee, City, and, as necessary, 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 the other parties so that adjudication may be made of the damages, if any, to be paid to the Lessee, the City and Approved Lenders as compensation for loss of their rights in the Improvements or the Property, or for damage to or destruction of the Development. Should the City or Lessee receive notice of institution of any proceedings subject to Section 7.1, the Party receiving such notice shall notify the other Party not later than thirty (30) days after receiving such notice. (b) The City 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 Property. Section 7.4 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 the Lessee reasonably determines renders continued operation of the Development infeasible both as a whole and in substantial part, this Lease shall terminate at the option of the City (except if the 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 6.3 or Article 7, as appropriate. In the event of a partial taking that does not result in termination pursuant to this Section 7.4, this Lease shall remain in full force and effect as to the portion of the Development remaining. ARTICLE 8: ASSIGNMENT AND TRANSFERS Section 8.1 Definitions. As used in this Article 8. the term "Transfer" means: (a) Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any other mode or form, of or with respect to this Lease or of the Property or any part thereof or any interest therein or of the Development constructed thereon, or any contract or agreement to do any of the same; or (b) Any total or partial sale, assignment or conveyance, or any trust or power, or any transfer in any other mode or form, of or with respect to any ownership interest in the Lessee, or any contract or agreement to do any of the same. 1010\01\209755.7 24 Section 8.2 Purpose of Restrictions on Transfer. This Lease is entered into solely for the purpose of development and operation of the Development on the Property and its subsequent use in accordance with the terms of this Lease. The qualifications and identity of the Lessee are of particular concern to the City, in view of: (a) The importance of the redevelopment of the Property to the general welfare of the community; and (b) The fact that a Transfer as defined in Section 8.1 above is for practical purposes a transfer or disposition of the Property. It is because of the qualifications and identity of the Lessee that the City is entering into this Lease with the Lessee and that Transfers are permitted only as provided in this Lease. Section 8.3 Prohibited Transfers. The limitations on Transfers set forth in this Section 8.3 shall apply for the Lease Term. Except as expressly permitted in this Lease, the Lessee represents and agrees that the Lessee has not made or created, and will not make or create or suffer to be made or created, any Transfer, either voluntarily or by operation of law, without the prior approval of the City. The City may approve any such Transfer in its sole discretion. The Parties agree and acknowledge that Affirmed shall remain the sole manager of the Lessee throughout the Lease Term. The City shall not approve a Transfer of Affirmed's interest in the Lessee nor shall the City approve of the admission of any other entity, including but not limited to, a non-profit or tax-exempt entity, as a manager of the Lessee. Any Transfer made in contravention of this Section 8.3 shall be void and shall be deemed to be a default under this Lease, whether or not the Lessee knew of or participated in such Transfer. Section 8.4 Permitted Transfers. Notwithstanding the provisions of Section 8.3, the following Transfers shall be permitted without the prior written consent of the City (subject to satisfaction of the conditions of Section 8.5). (a) Any Transfer creating an Approved Loan. (b) Any Transfer directly resulting from the foreclosure of an Approved Loan or the granting of a deed in lieu of foreclosure of an Approved Loan. (c) The leasing of residential units within the Development in accordance with the Regulatory Agreement. Property. (d) Any Transfer resulting directly from the death of an individual. (e) The granting of easements or permits to facilitate the development of the (f) The City hereby approves a Transfer of a membership interest in the Lessee to the Investor, or to an affiliate of the Investor (provided such affiliate provides documentation reasonably acceptable to the City that the affiliate has sufficient financial 1010\01\209755.7 25 capability to provide the capital contributions set forth in the Financing Plan) and future transfers of such interest provided that: (i) the Lessee's operating agreement provides for capital contributions of the members consistent with Financing Plan and is first approved by the City in its reasonable discretion; (ii) all documents associated with the tax credit syndication of the Development are submitted to the City for approval prior to execution, which approval shall not be unreasonably withheld; and (iii) in subsequent transfers the Investor (or an affiliate of the Investor reasonably acceptable to the City) remains liable for all unpaid capital contributions. The Parties agree and acknowledge that Affirmed shall remain the sole manager of the Lessee throughout the Lease Term. The City shall not approve a Transfer of Affirmed's interest in the Lessee nor shall the City approve of the admission of any other entity, including but not limited to, a non-profit or tax-exempt entity, as a managing member or manager of the Lessee. Section 8.5 Procedure for Approval of Certain Transfers. The City shall in its sole discretion approve or disapprove a request for a Transfer made by the Lessee upon the Lessee's delivery of written notice to the City requesting such approval. Such notice shall be accompanied by evidence regarding the proposed Transfer in reasonably sufficient detail to enable the City to evaluate the proposed Transfer, including, without limitation, transferee financial statements, information regarding prior transferee experience, and information regarding transferee's proposed use and/or development of the Property. Within thirty (30) days after receipt of the Lessee's written notice requesting City approval of a proposed Transfer, the City shall either reasonably approve or disapprove such proposed Transfer, or shall respond in writing by stating what further information, if any, the City reasonably requires in order to determine whether or not to grant the requested approval. Upon receipt of such a response, the Lessee shall promptly furnish to the City such further information as may be reasonably requested. Within ten (10) days after the City's receipt of the Lessee's submittal of the requested further information, the City shall either reasonably approve or disapprove such proposed Transfer. The City's failure to respond within such ten (10)-day period to any such request for approval shall be deemed to be the City's approval thereof. Upon the City granting approval of such proposed Transfer, the person or entity to which such Transfer is made, by an instrument in writing prepared by the City and in form recordable among the land records of the County, shall expressly assume the obligations of the Lessee under this Lease and agree to be subject to the conditions and restrictions to which the Lessee is subject arising during this Lease, to the fullest extent that such obligations are applicable to the particular portion of or interest in the Development conveyed in such Transfer. Section 8.6 Assignments. Any assignment of rights and/or delegation of obligations under this Lease in connection with a Transfer (whether or not City approval is required) shall be in writing executed by the Lessee and the assignee or transferee, with a copy thereof delivered to the City within thirty (30) days after the effective date thereof. Upon assignment or transfer of the Development pursuant to an assumption agreement described in Section 8.5 above, the assignor shall be relieved of liability with respect to any such obligations relating to the Development assumed by the assignee. Notwithstanding the foregoing, unless such assignee specifically assumes the obligations under this Lease with respect to the Development, the assignor will retain such obligations and remain jointly and severally liable for such obligations with such assignee. In the absence of specific written agreement by the City (which the City 1010\01\209755.7 26 may grant or withhold in its sole discretion), no Transfer permitted by this Lease or approved by the City shall be deemed to relieve the transferor from any obligation under this Lease. ARTICLE 9: REPRESENTATIONS AND ASSURANCES Section 9.1 City to Give Peaceful Possession. Lessee shall have, hold, and enjoy, during the Lease Term, peaceful, quiet, and undisputed possession of the Property without hindrance or molestation by or from the City so long as the Lessee is not in default under this Lease following the expiration of all applicable notice and cure periods. Section 9.2 Lessee Representations. The Lessee represents and warrants, as of the Commencement Date, as follows: (a) Organization. The Lessee is a duly organized, validly existing California limited liability company, and is in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted. (b) Authority of Lessee. The Lessee has full power and authority to execute and deliver this Lease, or to be executed and delivered, pursuant to this Lease, and to perform and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Lease and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Lease have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Lessee, and all actions required under the Lessee's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Lease and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Lease, have been duly taken. (d) Valid Binding Agreements. This Lease and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Lease constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of the Lessee enforceable against it in accordance with their respective terms. (e) No Breach of Law or Agreement. Neither the execution nor delivery of this Lease or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Lease, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on the Lessee, or any provision of the organizational documents of the Lessee, or will conflict with or constitute a breach of or a default under any agreement to which the Lessee is a party, or will result in the creation or imposition of any lien upon any assets or 1010\01\209755.7 27 property of the Lessee, other than liens established pursuant hereto. (f) Compliance With Laws: Consents and Approvals. The construction of the Improvements will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency. (g) Pending Proceedings. The Lessee is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of the Lessee, threatened against or affecting the Lessee, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to the Lessee, materially affect the Lessee's ability to develop the Improvements. (h) Title to Property. Upon the recordation of the Memorandum of Lease, the Lessee will have good and marketable leasehold title to the Property and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than those liens approved by the City, liens for current real property taxes and assessments not yet due and payable, and liens in favor of the City or approved in writing by the City. (i) Financial Statements. The financial statements of the Lessee and other financial data and information furnished by the Lessee to the City fairly present the information contained therein. As of the date of this Lease, there has not been any adverse, material change in the financial condition of the Lessee from that shown by such financial statements and other data and information. (j) Sufficient Funds. The Lessee holds sufficient funds or binding commitments for sufficient funds to complete the construction of the Improvements in accordance with this Agreement. Section 9.3 Release of City. The City may sell, assign, transfer or convey all or any part of City's interest in the Property, reversionary interest in the Improvements, or this Lease without obtaining the Lessee's consent, as long as the purchaser, assignee, or transferee: (i) expressly assumes all of the obligations of the City under this Lease by a written instrument in a form reasonably satisfactory to Lessee and recordable in the Official Records. In the event of a sale, assignment, transfer or conveyance by the City of the Property or its rights under this Lease, the same shall operate to release the City from any future liability upon any of the covenants or conditions of this Lease, expressed or implied, in favor of the Lessee, and in such event the Lessee shall look solely to the successor in interest of the City. This Lease shall not be affected by any such sale or transfer, and the Lessee agrees to attorn to any such purchaser or assignee. Section 9.4 Holding Over. If the Lessee shall retain possession of the Property or the Improvements thereon or any part thereof without the City's prior written consent following the expiration of the Lease Term or sooner termination of this Lease for any reason, then the Lessee 1010\01\209755.7 28 shall pay to the City the greater of: (i) an amount equal to two hundred percent (200%) of the Rent during the Lease Year prior to such termination or (ii) the fair market rent for the Property as of the date the Lessee retained possession of the Property or the Improvements, or any part thereof without the City's prior written consent following the expiration or sooner termination of this Lease as determined by a licensed real estate appraiser selected by the City in its sole discretion (the "Holdover Rent"). In addition to the Holdover Rent, the Lessee shall pay the City all other payments that would have been due had the Lease not expired or been terminated and had the Rent and other payment terms in effect at the time of the expiration or sooner termination of the Lease remained in effect. These payments shall be applicable to a holding over of any kind by the Lessee. The Lessee shall also indemnify and hold the City harmless from any loss or liability resulting from delay by the Lessee in surrendering the Property, including, without limitation, any claims made by any succeeding lessee founded on such delay. Acceptance of Rent by the City following expiration or termination shall not constitute a renewal of this Lease and nothing contained in this Section 9.4 shall waive the City's right of reentry or any other right. The Lessee shall be only a Lessee at sufferance, whether or not the City accepts any Rent from the Lessee while the Lessee is holding over without the City's written consent. Section 9.5 No Merger. Except upon expiration of the Lease Term or upon termination of this Lease pursuant to an express right of termination set forth herein, there shall be no merger of either this Lease or the Lessee's estate created hereunder with the fee estate of the Property or any part thereof by reason of the fact that the same person may acquire, own or hold, directly or indirectly, (a) this Lease, the Lessee's estate created hereunder or any interest in this Lease or the Lessee's estate (including the Improvements), and (b) the fee estate in the Property or any part thereof or any interest in such fee estate (including the Improvements), unless and until all persons, including any assignee of the City, having an interest in (i) this Lease or the Lessee's estate created hereunder, and (ii) the fee estate in the Property or any part thereof, shall join in a written instrument effecting such merger and shall duly record the same. ARTICLE 10: DEFAULTS AND REMEDIES Section 10.1 Events of Default: Remedy for Default by Lessee. (a) Any one or more of the following events shall constitute an "Event of Default" by the Lessee: (i) Failure to pay Rent, as required pursuant to Section 2.5 of this Lease, or any other payment required hereunder, and continuance of such failure for a period of fifteen (15) days after receipt by the Lessee of written notice specifying the nonpayment; (ii) Failure of the Lessee to observe and perform any other covenant, condition or agreement hereunder on its part to be performed, and (A) continuance of such failure for a period of forty-five (45) days after receipt by the Lessee of written notice specifying the nature of such default, or (B) if by reason of the nature of such default the same cannot be remedied within such forty-five (45) days, the Lessee fails to proceed with reasonable diligence 1010\01\209755.7 29 after receipt of such notice to cure the same, within a reasonable amount of time thereafter but in no event later than one hundred twenty (120) days following the City's initial notice; or (iii) A default by the Lessee under the City Loan, the Disposition Agreement, the Regulatory Agreement, the City Note or the City Deed of Trust which continues beyond the expiration of all applicable notice and cure periods; or (iv) The Lessee's abandonment of the Property for the period of time required for such abandonment to be legally recognized as such under California law; or (v) A general assignment by the Lessee (or Affirmed) for the benefit of creditors; or (vi) The filing of a voluntary petition by the Lessee (or Affirmed), or the filing of an involuntary petition by any of the Lessee's creditors, seeking the rehabilitation, liquidation or reorganization of the Lessee under any law relating to bankruptcy, insolvency or other relief of debtors, provided that in the case of an involuntary petition Lessee (or Affirmed) shall have ninety (90) days to cause such petition to be withdrawn or dismissed; or (vii) The appointment of a receiver or other custodian to take possession of substantially all of the Lessee's (or Affirmed's) assets or of this leasehold, which appointment is not withdrawn or dismissed within sixty (60) days, excluding any receivership initiated by an Approved Lender which shall not constitute an Event of Default; or (viii) The Lessee (or Affirmed) 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 the Lessee (or Affirmed) or of substantially all of its assets; or the 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 (ix) Attachment, execution or other judicial seizure of substantially all of the Lessee's assets or this leasehold, which is not dismissed, bonded, or stayed within thirty (30) days; or (x) A violation of the Lessee's obligations under any of the Approved Loan Documents (without cure or waiver after expiration of applicable cure periods), including (without limitation) a failure to operate, maintain, and manage the Improvements in accordance with this Lease. (xi) A Transfer occurs, either voluntarily or involuntarily, in violation of Article 8. (b) Whenever any default has occurred and is continuing and upon expiration of any applicable cure periods, and subject to the cure rights of Approved Lenders and the Investor, an Event of Default shall exist, the City may take whatever action at law or in equity as may appear reasonably necessary to enforce performance or observance of this Lease, including 1010\01\209755.7 30 without limitation, termination of this Lease. In the event of an Event of Default, City'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. Section 10.2 Remedy for Default by City. If the City defaults under this Lease, then the Lessee shall first notify the City in writing of its purported breach or failure, giving the City forty-five (45) days from receipt of such notice to cure or, if cure cannot be accomplished within forty-five (45) days, to commence to cure such breach, failure, or act. In the event the City does not then so cure within said forty-five (45) days, or if the breach or failure is of such a nature that it cannot be cured within forty-five(45) days, the City fails to commence to cure within such forty-five (45) days and thereafter diligently complete such cure within a reasonable time thereafter but in no event later than one hundred twenty (120) days, then the Developer shall be afforded all of its rights at law or in equity, by taking all or any of the following remedies: (1) terminating in writing this Lease (provided, however, that the indemnification provisions shall survive such termination); and (2) prosecuting an action for damages or specific performance. ARTICLE 11: MISCELLANEOUS Section 11.1 Instrument Is Entire Agreement. This Lease and the Disposition Agreement constitute the entire agreement between the Parties with respect to the matters set forth herein and completely supersede all prior understandings or agreements, both written and oral, between the Parties relating to the lease of the Property. Section 11.2 Notices. All notices hereunder shall be in writing signed by the 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: if to the City: If to Lessee: With a copy to: City of Carlsbad 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 Attn: City Manager El Camino Family Housing Partners, LLC c/o Affirmed Housing Group 200 East Washington Street, Suite 200 Escondido, CA 92025 Attn: President Incorvaia & Associates 445 Marine View Avenue, Suite 295 Del Mar, CA 92014 Attn: Joel Incorvaia 1010\01\209755.7 31 With a copy to: BCCC, Inc. c/o Boston Capital Partners Inc. One Boston Place Boston, MA 02110 Attn: Asset Management Department 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. Section 11.3 Non-Liability of Officials, Employees and Agents. No member, official, employee or agent of the Agency or the City shall be personally liable to the Lessee, or any successor in interest, in the event of a City default. Section 11.4 Force Majeure. Performance by either Party 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; quarantine restrictions; freight embargoes; lack of transportation; 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; 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 City); or any other causes (other than the 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 City and the Lessee. In no event shall the cumulative delays exceed one hundred eighty (180) days, unless otherwise agreed to in writing by the Parties. Section 11.5 Non-Waiver of Breach. Neither the failure of a Party to insist upon strict performance of any of the covenants and agreements of this Lease nor the failure by the Party to exercise any rights or remedies granted to such Party under the terms of this Lease shall be deemed a waiver or relinquishment (a) of any covenant herein contained or of any of the rights or remedies of the applicable Party, (b) of the right in the future of the applicable Party to insist upon and to enforce, by any appropriate legal remedy a strict compliance with all of the covenants and conditions thereof, or (c) the right of the City to recover possession of the Property upon occurrence of a default and the expiration of applicable notice and cure periods or the expiration of the Lease Term. Section 11.6 Binding Upon Successors; Covenants to Run With Land. This Lease shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest and assigns of each of the Parties; provided, however, that there shall be no transfer of any interest by the Lessee except pursuant to the terms of this Lease. Any reference in this Lease to a specifically named party shall be deemed to apply to any successor, heir, administrator, executor or assign of such party who has acquired an interest in compliance with the terms of this Lease, or under law. 1010\01\209755.7 32 The terms of this Lease shall run with the land and shall bind all successors in title to the Property during the Lease Term, except that the provisions of this Lease that are specified to survive termination of this Lease shall run with the land in perpetuity and remain in full force and effect following such termination. Every contract, deed, or other instrument hereafter executed covering or conveying the Property or the Improvements or any portion thereof shall be held conclusively to have been executed, deliver, and accepted subject to such covenants and restrictions, regardless of whether such covenants or restricts are set forth in such contract, deed or other instrument, unless the City expressly releases the Property, the Improvements, or the applicable portion of the Property, from the requirements of this Lease. Section 11.7 Employment Opportunity. The Lessee and its successors, assigns, contractors and subcontractors shall not discriminate against any employee or applicant for employment in connection with the construction and operation of the Improvements because of race, color, religion, sex, sexual preference, marital status, ancestry or national origin. Each of the following activities shall be conducted in a nondiscriminatory manner: hiring; upgrading; demotion and transfers; recruitment and recruitment advertising; layoff and termination; rate of pay and other forms of compensation; and selection for training including apprenticeship. Section 11.8 Relationship 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; partnership; joint venture; association; or buyer and seller. 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 of the Parties, shall be deemed to create any relationship between the Parties other than the relationship of landlord and tenant. Section 11.9 Titles. Any titles of the sections or subsections of this Lease are inserted for convenience of reference only and shall be disregarded in interpreting any of its provisions. Section 11.10 Severability. 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 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. Section 11.11 Applicable Law. This Lease shall be governed by and construed in accordance with the laws of the State of California. Section 11.12 Venue. The Superior Court of the County of San Diego shall be the forum and venue for all litigation arising from this Lease. Section 11.13 Approvals. (a) Whenever this Lease calls for a Party's approval, consent, or waiver, the written approval, consent, or waiver of the Party's Authorized Officer(s) shall constitute the approval, consent, or waiver of the Party, without further authorization required from the Party's 1010\01\209755.7 33 board. The Parties hereby authorize their Authorized Officers to deliver such approvals or consents as are required by this Lease, or to waive requirements under this Lease, on behalf of them. (b) All approvals under this Lease shall be subject to a reasonableness standard, except where a sole discretion standard is specifically provided. Section 11.14 Inspection of Books and Records. The City has the right, at all reasonable times, to inspect and copy, on a confidential basis, subject to the California Public Records Act (California Government Code Section 6251 et seq.), the books, records and all other documentation of the Lessee pertaining to its obligations under this Lease. The Lessee also has the right, at all reasonable times, to inspect and copy the books, records and all other documentation of the City pertaining to its obligations under this Lease. Each Party shall maintain adequate records for a period of at least five (5) years after the end of the operating year in which the records were created. Section 11.15 Lease Binding on Successors. This Lease shall inure to the benefit of, and shall be binding upon, the City, the Lessee, and their respective permitted successors and assigns. Section 11.16 Counterparts. This Lease may be executed in counterparts and multiple originals, each of which shall be an original and all of which shall constitute the same instrument. 1010\01\209755.7 34 BY SIGNING BELOW, the Parties confirm their agreement to the terms of this Lease as of the date first written above. CITY: THE CITY OF CARLSBAD, a municipal corporation By:_ Its: APPROVED AS TO FORM By: Ronald Ball City Attorney By: LESSEE: EL CAMINO FAMILY HOUSING PARTNERS, LLC a California limited liability company By: Affirmed Housing Corporation, a California.Cprporation, its Manager By: Its: 1010\01\209755.7 35 BY SIGNING BELOW, the Parties confirm their agreement to the terms of this Lease as of the date first written above. CITY: THE CITY OF CARLSBAD, a municipal corporation Its: RAYMOND R. PATCHETT. CITY MANAGER APPROVED AS TO FORM By: Ronald Ball City By: LESSEE: EL CAMINO FAMILY HOUSING PARTNERS, LLC a California limited liability company By: Affirmed Housing Corporation, a California Corporation, its Manager By: Its: 1010\01\209755.7 35 EXHIBIT A DESCRIPTION OF THE PROPERTY 1010\01\209755.7 A-l EXHIBIT B INSURANCE REQUIREMENTS (a) Required Coverage. The Lessee shall maintain and keep in force, at the Lessee's sole cost and expense, the following insurance applicable to the Development: (i) To the extent required by law, Worker's Compensation insurance, including Employer's Liability coverage, with limits not less than required by applicable law. (ii) Comprehensive or Commercial General Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations. (iii) Comprehensive Automobile Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable; provided, however, that if the Lessee does not own or lease vehicles for purposes of this Lease, then no automobile insurance shall be required and both parties to this Lease shall initial this provision signifying same. (iv) Property insurance covering the Development covering all risks of loss, including earthquake (but only if it is commercially affordable at a reasonable price and with a reasonable deductible, in City's reasonable opinion, and if City requests in writing that such coverage be carried) and flood, if the Property is located in a flood zone, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the City, naming the City as a Loss Payee, as its interest may appear. (b) Contractor's Insurance. The Lessee shall cause any general contractor or agent working on the Development under direct contract with the Lessee to maintain insurance of the types and in at least the minimum amounts described in subsections (a)(i), (a)(ii), and (a)(iii) above, and shall require that such insurance shall meet all of the general requirements of subsection (c) below. Subcontractors working on the Development under indirect contract with the Lessee shall be required to maintain the insurance described in subsections (a)(i), (a)(ii) and (a)(iii) above; provided that the amount of Commercial General Liability insurance for each subcontractor shall have a limit of not less than One Million Dollars ($1,000,000). Liability and Comprehensive Automobile Liability insurance to be maintained by such contractors and agents pursuant to this subsection shall name as additional insureds the City, the Agency, their respective council and board members, officers, agents, and employees. (c) General Requirements. The required insurance shall be provided under an occurrence form, and the Lessee shall maintain such coverage continuously throughout the Lease Term. Should any of the required insurance be provided under a form of coverage provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above. 1010\01\209755.7 fj-1 Comprehensive General Liability, Comprehensive Automobile Liability and Property insurance policies shall be endorsed to name as additional insureds the City, the Agency, and their respective council and board members, officers, agents, and employees. All policies and bonds shall be endorsed to provide (i) thirty (30) days prior written notice of cancellation, reduction in coverage, intent not to renew or any material change in said policies to the address established for notices to the City pursuant to the Lease; (ii) an agreement that such policies are primary and non contributing with any insurance that may be carried by the City; (iii) a provision that no act or omission of the Lessee shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (d) a waiver by the insurer of all rights of subrogation against the City and its authorized parties in connection with any loss or damage thereby insured against. (d) Certificates of Insurance. Upon the City's request at any time during the Lease Term, the Developer shall provide certificates of insurance, in form and with insurers reasonable acceptable to the City, evidencing compliance with the requirements of this Exhibit, and shall provide complete copies of such insurance policies, including a separate endorsement naming the City as additional insured, if requested by the City. 1010\01\209755.7 B-2 EXHIBIT C PRELIMINARY TITLE REPORT 1010\01\209755.7 C-l EXHIBIT D RENT PAYMENT SCHEDULE YEAR 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. 29. 30. LEASE PAYMENT $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 $5,492 $13,243 $13,442 $13,600 $13,715 $13,785 $13,805 $13,775 $13,689 $13,545 $13,340 $13,069 $12,730 $12,318 $11,829 $11,259 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. $17,494 $16,748 $15,908 $14,967 $13,920 $12,763 $11,488 $10,091 5,565 $6,904 $5,100 $3,880 $2,845 $1,683 $387 $1 $1 $1 $1 $1 $1 $1 $1 $1 $1 1010\01\209755.7 D-l