AGR-7450.7 - MERCY HOUSING CALIFORNIA 107 LP - VILLA ST. JOSEPH 480 S BATAVIA ST - AGREEMENT CONTAINING COVENANTSA GR-7450,7 Attachment 7
Recording Requested by and
When Recorded Mail to:
THE CITY OF ORANGE
300 E. Chapman Avenue
Orange, CA 92866
Attention:
APN: OFFICIAL BUSINESS
Document entitled to free
recording per Government
Code Section 27383
AGREEMENT CONTAINING COVENANTS
Including Rental Restrictions)
480 South Batavia Street)
THIS AGREEMENT CONTAINING COVENANTS ("Agreement") is entered into as of
2022 by and between the CITY OF ORANGE, a municipal corporation of
the State of California ("City") and MERCY HOUSING CALIFORNIA 107, L.P., a California
limited partnership("Developer").
WHEREAS, Developer is the owner of that certain real property ("Property") located in
the City of Orange and more particularly described in'Exhibit "A" which is attached hereto and
incorporated herein by this reference; and
WHEREAS,for the purpose of providing housing that will be affordable to Extremely Low
Income, Very Low Income, and Low Income Senior Citizen Households, Developer and the City
have entered into an Affordable Housing Agreement, dated as of 2022, as amended
from time to time("Affordable Housing Agreement"); this Agreement Containing Covenants is
entered into pursuant to the Affordable Housing Agreement, a true and correct copy of which is
on file in the office of the City Clerk of the City; and any capitalized term that is not otherwise
defined in this Agreement has the meaning ascribed to such term in the Affordable Housing
Agreement; and
WHEREAS, pursuant to the Affordable Housing Agreement, the City is providing
financial assistance to Developer to assist in the acquisition and development and rehabilitation of '
the Property, using funds from the Low and Moderate Income Housing Asset.Fund, established
and maintained by the City pursuant to California Health and Safety Code Sections 34176.and
34'176.1 ("LMIHAF") and In Lieu Fees Funds; and
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Agreement Containing Covenants
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1
WHEREAS,the Developer has obtained an allocation of Low Income Housing Tax Credits
pursuant to the Tax Reform Act of 1986, as amended, and governed by Section 42 of Internal
Revenue Code ("Tax Credits"); and
WHEREAS, the use of the Tax Credits to finance the development and rehabilitation of
the Property imposes income and affordability requirements such that eighteen (18) of the units
will be restricted at 20% tax credit limits, six (6) of the units will be restricted at 30%tax credit
limits, thirteen (13) of the units will be restricted at 40%tax credit limits, and twelve (12) of the
units will be restricted at 50% tax credit limits, provided however, that nothing herein will be
deemed to authorize charging rents in excess of the Affordable Rent for the specified units set
forth in Section 3.a below; and
WHEREAS,the Affordable Housing Agreement contains certain provisions relating to the
use of the Property and imposes additional income and affordability requirements.
NOW, THEREFORE, CITY AND OWNER COVENANT AND AGREE AS FOLLOWS:
1. Construction Covenant.
Developer hereby covenants and agrees on behalf of itself and its successors and assigns
in the Property or any portion thereof or any improvements thereon or any interest therein that
Developer and such successors and assigns will develop and rehabilitate and construct on the
Property a residential apartment Project, which will contain fifty (50) residential units (6 studios,
43 one-bedrooms and 1 two-bedroom manager's unit) and associated amenities, in accordance
with the Affordable Housing Agreement, this Agreement, and plans approved by the City.
2. Maximum Incomes.
a. Developer covenants and agrees for itself and its successors, its assigns and every
successor in interest to the Property or any part thereof, that Developer and its successors and
assignees will use the Property exclusively to provide affordable housing for Extremely Low,Very
Low, and Low Income Senior Citizen Households, subject to all of the terms and conditions of
this Agreement, except for one two-bedroom unit designated as the management unit for the on-
site manager. The remaining 49 units will be allocated as follows:
i. Eighteen(18)Units will be rented exclusively to an Extremely Low Income
Senior Citizen Household at an Affordable Rent as provided in California Health and Safety Code
Section 50106, all consisting of one bedroom Units.
ii. Six(6)Units will be rented exclusively to Very Low Income Senior Citizen
Households at an Affordable Rent as provided in California Health and Safety Code Section
50105, consisting of two (2) studio Units and four(4) one bedroom Units.
iii. Twenty-five (25) Units will be rented exclusively to Low Income Senior
Citizen Households at.an Affordable Rent as provided in California Health and Safety Code
Section 50079.5, consisting of four(4) studio Units and twenty-one (21) one bedroom Units.
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Agreement Containing Covenants
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iv. Eighteen (18) Units will be rented exclusively to households meeting the
twenty percent (20%) income limit under the Extended Use Agreement recorded against the
Property in connection with the Tax Credits, all consisting of one-bedroom Units.
v. Six (6) Units will be rented exclusively to households meeting the thirty
percent (30%) income limit under the Extended Use Agreement recorded against the Property in
connection with the Tax Credits, consisting of the following: (a)two (2) studio Units; and(b) four
4) one-bedroom Units.
vi: Thirteen (13) Units will be rented exclusively to households meeting the
forty percent(40%)income limit under the Extended Use Agreement recorded against the Property
in connection with the Tax Credits, consisting of the following: (a) two (2) studio Units; and (b)
eleven (11) one-bedroom Units.
vii. Twelve(12)Units will be rented exclusively to households meeting the fifty
percent (50%) income limit under the Extended Use Agreement recorded against the Property in
connection with the Tax Credits, consisting of the following: (a)two (2) studio Units; and(b)ten
10) one-bedroom Units.
b. The maximum incomes of eligible tenants for the units described in paragraphs
2.a.i, 2.a.ii and Error! Reference source not found.i above will be determined on the basis of the
income limits for Extremely Low Income, Very Low Income and Low Income households
respectively in the Los Angeles-Long Beach-Anaheim SMSA, published approximately annually
by the California Department of Housing and Community Development ("HCD"). If HCD
discontinues publishing such income limits, the term "Extremely Low Income" will mean a
household income that does not exceed 30% of the area median income, adjusted for family size,
the term"Very Low Income"will mean a household income that does not exceed 50%of the area
median income, adjusted for family size, and the term "Low Income" will mean a household
income that does not exceed 70%of the area median income, adjusted for family size.For the term
of the Tax Credits, in no case will household income exceed applicable Tax Credit income limits.
c. Developer will obtain and maintain on file an income computation and certification
form from such prospective tenant dated immediately prior to the date of initial occupancy. •
Developer will verify that the income information provided by an applicant is accurate. by
following all applicable City policies and procedures and by taking one or more of the following
steps as a part of the verification process: (i) obtain two (2) pay stubs from the most recent pay
periods; (ii) obtain a written verification of income and employment from applicant's current
employer; (iii) obtain an income verification form from the Social Security Administration and/or
California Department of Social Services if the applicant receives assistance from either agency;
iv) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain
other verification of such applicant's income as is reasonably satisfactory; or(v)obtain such other
information as may be reasonably required.Each tenant lease will contain a provision to the effect
that Developer has relied on the income certification and supporting information supplied by the,
tenant in determining qualification for occupancy of a Unit, and that.any material misstatement in
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such certification (whether or not intentional) will be cause for,immediate termination of such
lease.
d. Developer will update income records annually and provide copies of updated
tenant eligibility records and monthly rental records to the City for review. Upon review of such
records,the City may at its option perform an independent audit of the tenant eligibility records in
order to verify compliance with the income and affordability requirements set forth herein. Costs
for such an audit performed by the City will be deemed an Operating Expense, deductible from
the Project's Revenue(as such terms are defined in the LMIHAF Note and the In Lieu Fees Note).
Developer will retain the records described in this Section for a period of not less than five (5)
years after the date each record was created.
3. Maximum Rents.
a. Rents charged to a tenant will not exceed rents that are affordable to Extremely
Low Income, Very Low Income and Low Income households, as applicable, (as "Affordable
Rent" is defined below). The maximum rents, including a reasonable utility allowance for utilities
and services (excluding telephone)to be paid by Extremely Low Income, Very Low Income, and
Low Income Senior Citizen Households will be the lower of the maximum rent permitted to be
charged pursuant to the Extended Use Agreement recorded against the Property in connection with
the Tax Credit requirements for so long as such requirements are applicable and the maximum rent
for the applicable income level as set forth below:
i. In the case of an Extremely Low Income Senior Citizen Household, the
maximum rent will be a rent that does not exceed 30 percent(30%) of thirty percent (30%) of the
area median income adjusted for household size appropriate to the unit, as determined by HCD.
ii. In the case of a Very Low Income Senior Citizen Household, the maximum
rent will be a rent that does not exceed 30 percent(30%) of fifty percent(50%) of the area median
income adjusted for household size appropriate to the unit, as determined by HCD.
iii. In the case of a Low Income Senior Citizen Household, the maximum rent
will be a rent that does not exceed 30 percent (30%) of seventy percent (70%) of the area median
income adjusted for household size appropriate to the unit, as determined by HCD
iv. In the case of a Senior Citizen Household occupying a unit described in
Paragraph Error! Reference source not found., 2.a.v, 2.a.vi or 2 a.vii above, the maximum rent
will be the maximum allowable rent under the Extended Use Agreement recorded against the
Property in connection with the Tax Credits.
v. For the purpose of determining Affordable Rent under Paragraphs 3.a.i,
3.a.ii and Error! Reference source not found.i, household size appropriate to the unit will mean
one (1)person in the case of a studio and two (2) persons in the case of a 1-bedroom unit.
b. This affordability requirement will continue in effect for the Term of this
Agreement.
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c. Failure to comply with the,affordability requirements of this Agreement following
notice from the City and an opportunity to cure such failure is an event of default under the terms
of the LMIHAF Loan and the In Lieu Fees Loan. Pursuant to the LMIHAF Note evidencing the
LMIHAF Loan and the In Lieu Fees Note evidencing the In Lieu Fees Loan, subject to the right
to cure, the LMIHAF Loan and the In Lieu Fees Loan will each be due and payable immediately
if the housing does not meet the affordability requirements of this Agreement.
d. Upon request, the City Manager will notify Developer of the maximum rents that
may be charged under Paragraphs 3.a.i, 3.a.ii and Error! Reference source not found.i (not to
exceed "Affordable Rent") and the maximum income of persons who are eligible to occupy the
Property, based on the then-current area median income. In no event will rents exceed the
maximum rent permitted by the tax credit regulations or (with regard to the allocation of units set
forth in Section 2.a hereof) the rules applicable to the use of LMIHAF and In Lieu Fees Fund
moneys,whichever is the lowest.
e. Developer, its successors and assigns will not charge rents in excess of the amounts
determined as set forth in Section 3. In the event that either Developer or the City determines that
Developer has charged a tenant rent in excess of the amount set forth herein, Developer will
immediately reimburse the tenant the amount of overpayment,with interest,from the date of rental
payment,at the highest non-usurious rate of interest permitted by law,within ten(10)days of such
determination. Developer may revise rents not more than once annually.
4. Project Monitoring Fee.
Annually, on or before the first day of each fiscal year, Developer will pay to the City a
Project monitoring fee in an amount equal to$150 per Unit per year,which fee shall accrue interest
if not paid when and as due under this Agreement, from the date the fee is due until paid in full, at
the highest non-usurious rate of interest then permitted by law. Notwithstanding any other
provision of this Agreement, this provision shall be subject to a fifteen (15) day notice and cure
period.
5. Tenant Selection.
Developer will adopt, based upon a draft prepared by the City, written tenant selection
policies and criteria, for approval by the City, that meet the following requirements:
a. Are consistent with the purpose of providing housing for Extremely Low, Very
Low Income, and Low Income Senior Citizen Households.
b. Are reasonably related to program eligibility and the applicants' ability to perform
the obligations of the lease.
c. Give reasonable consideration to the housing needs of persons that would have a
preference under 42 CFR §906.211 (Federal selection.preferences for admission to Public
Housing);
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d. Provide for:
i. The selection of otherwise eligible tenants from a written waiting list in the
chronological order of their application, insofar as is practicable, taking into account applicants'
need for accessible features;
ii. The prompt written notification to any rejected applicant of the grounds for
any rejection;
e. Tenant selection will be administered.in accordance with the tenant selection plan
approved by the City.
f.Carry out the Affirmative Marketing procedures of the City of Orange, to provide
information and otherwise attract eligible persons from all racial, ethnic and gender groups in the
housing market area. Developer and City will cooperate to effectuate this provision during the
Developer's initial lease-up of the Property and as vacancies occur.
6. Nondiscrimination Based on Source of Income.
Developer, its successors and assigns,will not refuse to accept for occupancy an otherwise
eligible household that is a holder of a certificate or voucher under 24 CFR part 982-Section 8
Tenant-Based Assistance: Unified Rule for Tenant-Based Assistance under the Section 8 Rental
Certificate Program and the Section 8 Rental Voucher Program or to the holder of a comparable
document evidencing participation in a HOME tenant-based rental assistance program because of
the status of the prospective tenant as a holder of such certificate of family participation, rental
voucher, or comparable HOME tenant-based assistance document.
7. Increases in Tenant Incomes.
This Section will govern in the event of increases in tenant incomes: (a) a tenant who
initially qualified'as an Extremely Low Income Household, but who, due to an increase in income,
no longer qualifies as an Extremely Low Income Household but does qualify as a Very Low
Income Household, will pay as rent an amount that is Affordable Rent to a Very Low Income
Household, as defined in Section 2 above; (b) a tenant who initially qualified as a Very Low
Income Household, but who, due to an increase in income, no longer qualifies as a Very Low
Income Household but does qualify as a Low Income Household, will pay as rent an amount that
is Affordable Rent to a Low Income Household, as set forth in Health and Safety Code section
50053; and(c)a tenant who initially qualified as a Very Low Income or a Low Income Household,
but who, due to an increase in income, no longer qualifies as either a Very Low Income or a Low
Income Household, will pay as rent the lesser of the amount payable by the tenant under tax credit
regulations, State or local law or 30 percent of the household's adjusted income.
8. Tenant Protections.
Each tenant lease must provide for housing for not less than one year, unless by mutual
agreement between the tenant and the Developer. The lease may not contain any of the following
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provisions (in which references to "owner"will mean the Developer, its successors or assigns):
a. Agreement by the tenant to be sued,to admit guilt, or to a judgment in favor of the
owner in a lawsuit brought in connection with the lease;
b. Agreement by the tenant that the owner may take,hold, or sell personal property of
household members without notice to the tenant and a court decision on the rights of the parties.
This prohibition, however, does not apply to an agreement by the tenant concerning disposition of
personal property remaining in the housing unit after the tenant has moved out of the unit. The
owner may dispose of this personal property in accordance with state law;
c. Agreement by the tenant not to hold the owner or the owner's agents legally
responsible for any action or failure to act,whether intentional or negligent;
d. Agreement of the tenant that the owner may institute a lawsuit without notice to the
tenant;
e. Agreement by the tenant that the owner may evict the tenant or household members
without instituting a civil court proceeding in which the tenant has the opportunity to present a
defense, or before a court decision on the rights of the parties;
f.Agreement by the tenant to waive the right to a trial by jury;
g. Agreement by the tenant to waive the tenant's right to appeal, or to otherwise
challenge in court, a'court decision in connection with the tenant housing agreement; and
h. Agreement by the tenant to pay attorney's fees or other legal costs even if the tenant
wins in a court proceeding by the owner against the tenant. The tenant, however,may be obligated
to pay costs if the tenant loses.
9. Termination of Lease.
Developer, its successors or assigns, may not terminate a lease or refuse to renew the lease
of a tenant, except for: serious or repeated violation of the terms and conditions of the lease;
violation of applicable federal, state, or local law; or other good cause. Any termination or refusal
to renew must be provided by Developer's service upon the tenant,of a written notice specifying
the grounds for the action in the time and manner proscribed by law.
10. Maintenance Obligations.
Developer will maintain the improvements on the Property in compliance with all
applicable housing quality standards and local code requirements, and will keep the Property free
from any unreasonable accumulation of debris or waste materials. Maintenance will be performed
in a manner that will preserve the Project's LEED Platinum standards. Prior to the recordation of
this Agreement, Developer prepared and submitted to the City Manager of the City for approval a
program (the "Maintenance Program") for the maintenance of. the Property and the
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Improvements. For the Term of this Agreement, Developer, and its successors and assigns, will
maintain the Property and the Improvements in accordance with the approved Maintenance
Program,as the same may be amended from time to time with the written approval of the Executive
Director of the City. If Developer fails to maintain the Property and the Improvements in
accordance with the approved Maintenance Program, the City will have the right, but not the
obligation,to enter the Property and the Improvements, correct any violation, and hold Developer
responsible for the cost thereof, and such cost, until paid, will constitute a lien on the Property;
provided, however that all such liens shall at all times be subject and subordinate to all deeds of
trust and other liens granted to third party lenders providing financing for the Property.
11. Nondiscrimination.
Developer covenants and agrees for itself, its successors, its assigns and every successor in
interest to the Property or any part thereof, there will be no discrimination against or segregation
of any person, or group of persons, on account of race, color, national origin, religion or sex in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor will
Developer itself or any person claiming under or through it establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. All deeds,
leases or contracts will contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
a. In deeds: "The grantee herein covenants by and for himself or herself, his or her
heirs, executors, administrators, and assigns, and all persons claiming under or through them,that
there shall be no discrimination against or segregation of, any person or group of persons on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease,
sublease,transfer,use,occupancy,tenure,or enjoyment of the premises herein conveyed,nor shall
the grantee or any person claiming under or through him or her, establish or permit any practice or
practices of discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants,sublessees, or vendees in the premises herein conveyed.
The foregoing covenants shall run with the land."
b. In leases: "The lessee herein covenants by and for himself or herself, his or her
heirs, executors, administrators, and assigns,and all persons claiming under or through him or her,
and this lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of
persons,on account of any basis listed in subdivision(a)or(d)of Section 12955 of the Government
Code, as those bases are defined in Sections 12926, 12926.1, subdivision(m) and paragraph(1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing,
subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor
shall the lessee himself or herself, or any person claiming under or through him or her, establish
or permit any such practice or practices of discrimination or segregation with reference to the
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selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, 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 any basis listed in subdivision (a) or(d)of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease,transfer, use,occupancy,tenure, or enjoyment of the land,nor shall the
transferee itself or any person claiming under or through him or her, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the land."
12. Management Obligations.
Prior to the recordation of this Agreement, Developer prepared and submitted to the City
Manager for approval a "Management Plan" pursuant to the Affordable Housing Agreement,
describing Developer's proposed plans for managing and operating the Property, a copy of which
is on file at the offices of the City . For the Term of this Agreement, Developer will manage and
operate the Property in accordance with the approved Management Plan, including such
amendments as may be approved in writing from time to time by the Developer and the City
Manager. Throughout the Term of this Agreement, the Project must include at least one on-site
Property Manager.
13. Removal and Replacement of Property Manager.
Developer's agreement with the Property Manager must provide that it is subject to
termination by Developer without penalty, upon thirty (30),days prior written notice. Developer
hereby covenants and agrees that, if the City determines in its reasonable judgment that the Project
is not being operated and managed in accordance with the approved Management Plan, the City
may deliver notice to the Developer of its determination that the Project's management practices
do not conform to the Management Plan (the "City Notice"), including a reasonably detailed
explanation of such non-conformance.The City and Developer will meet and confer in good faith
to identify actions to be taken by Developer to bring its management practices into conformance
with the Management Plan, which could include replacing the.Property Manager. Developer will
have thirty(30) days after receipt of the City Notice (or such longer time as may be granted by the
City)to either change its management practices to conform to the Management Plan or replace the
Property Manager with a manager approved by the City arid by all of Developer's mortgagees.
Developer must promptly notify the City upon learning that there is a change in the management
or control of the Property Manager, and, if the change is unsatisfactory to the City, it may require
Developer to replace the Property Manager in accordance with the terms of this paragraph.
Notwithstanding the foregoing, if the City determines that the Property Manager has violated local,
state, or federal campaign finance laws, it will have the right to require Developer to immediately
remove and replace the Property Manager with a manager approved by the City.
14. Financial Reports.
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Developer will submit the following financial reports for the Project:
a. On or before the first day of each fiscal year, an estimated annual budget for
management of the Property (the "Annual Project Budget"). The Annual Project Budget will
include all necessary operating expenses, current maintenance charges, expenses of reasonable
upkeep and repairs, taxes and special assessment levies, prorated amount required for insurance
and all other expenses incident to the operation of the Project;and will show the expected revenues
to pay such expenses, including annual debt service requirements and reserve fund deposits and
balances. The Annual Project Budget, including any amendments proposed by the Developer,will
be subject to the approval of the City Manager.
b. Sixty (60) days following the last day of each quarter of the fiscal year, beginning
on the date of first occupancy; a quarterly report for the management of the Property (the
Quarterly Report") during such quarter. The Quarterly Report will include a profit and loss
statement, budget to date figures, and occupancy report. The Executive Director in his sole
discretion may waive the.requirement of the Quarterly Report for one or more quarterly reporting
periods. However, such waiver will not operate to waive any future right of the City to require a
subsequent Quarterly Report. If at any time the City determines that the Property is not being
managed or maintained in accordance with the approved Management Plan,Developer will change
its management personnel or the practices complained of, upon receipt of written notice from the
City.
c. Developer will pay to City a late fee in the amount of $1,500 for each Annual
Project Budget and/or Quarterly Report which is not submitted to the City within the times and in
the form and substance required by this Agreement, which late fee shall accrue interest if not paid
when and as due under this Agreement, from the date the fee is due until paid in full, at the highest
non-usurious rate of interest then permitted by law, but in no event more than 10 %.
Notwithstanding any other provision of this Agreement, this provision shall be subject to a thirty
30) day notice and cure period.
15. Term of This Agreement.
The covenants established in this Agreement and any amendments hereto approved by the
City and the Developer will,without regard to technical classification and designation,be binding
for the benefit and in favor of the City, and its successors and assigns. The requirements of this
Agreement will commence at its recordation and will remain in effect until the date that is fifty-
five (55) years after Conversion (the "Term"). This Agreement will remain in effect throughout
its full Term, notwithstanding the payment in full of the LMIHAF Loan and/or the In Lieu Fees
Loan. This Agreement is secured by the City Deed of Trust recorded concurrently herewith and
Developer will not be entitled to a reconveyance of the City Deed of Trust prior to the expiration
of the full-Term of this Agreement.This Agreement will unconditionally be and remain at all times
prior and superior to the lien created by the Senior Deed of Trust and any other of the Senior Loan
Documents and all of the terms and conditions contained in the Senior Loan Documents and to the
lien of any new mortgage debt which is for the purpose of refinancing all or any part of,the Senior
Loan.
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16. Enforcement of This Agreement.
The City is deemed beneficiary of the terms and provisions of this Agreement and the
covenants herein, both for and in its own right and for the purposes of protecting the interests of
the community and other parties, public or private, for whose benefit this Agreement and the
covenants running with the land have been provided. The City will,have the right, if the covenants
are breached, to exercise all rights and remedies and to maintain any actions or suits at law or in
equity or other proper proceedings to enforce the curing of such breaches to which it or any other
beneficiaries of this Agreement and covenants are entitled. Developer hereby agrees that specific
enforcement of its obligations contained herein is the only means by which the City may fully
obtain the benefits of this Agreement, and Developer therefore agrees to 'the imposition of the
remedy of specific performance against it in the case of uncured default by Developer hereunder.
17. Waiver.
A waiver by the City of the performance of any covenant or condition herein will not
invalidate this Agreement nor will it be considered a waiver of any other covenants or conditions,
nor will the delay or forbearance by the City in exercising any remedy or right be considered a
waiver of, or an estoppel against, the later exercise of such remedy or right.
18. Covenants Run With the Land.
The covenants and agreements contained herein will run with the land and not be personal
obligations of Developer. Upon the sale, conveyance or other transfer of the Property approved
by the City or otherwise permitted under the Affordable Housing Agreement, the LMIHAF Note,
the In Lieu Fees Note and the City Deed of Trust (a "Transfer") and the assumption of the
obligations hereunder by a transferee, the Developer's liability for performance will be terminated
as to any obligation to be performed hereunder after the date of such Transfer.
19. Amendments.
This Agreement may be amended only by a written instrument executed by the parties
hereto or their successors in title, and duly recorded in the Official Records of the County of
Orange, State of California.
20. Notice.
Any notice required to be given hereunder shall be given in the manner set forth in the
Affordable Housing Agreement.
21. Execution in Counterparts.
This Agreement may be executed by each party on a separate signature page, and when the
executed signature pages are combined, will constitute one single instrument.
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IN WITNESS WHEREOF, the City and Developer have executed this Agreement.
CITY"
CITY OF ORANGE, a municipal corporation
of the State of California
By: je,
Iarlr•A. Murphy,Mayor-
ori2.` R. SJlhe-1
Vioft
ATTEST:
amela Coleman, City Clerk
APPROVED AS TO FORM:
1411By .. .L.:-w
G• . A. Sheat , C ty Attorn
Signatures Continue on Next Page]
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Agreement Containing Covenants.
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DEVELOPER"
Mercy Housing California 107,L.P.,
a California limited partnership
By: Mercy Housing California 107 LLC,
a California limited liability company,
its general partner
By: Mercy Housing Calwest,
a California nonprofit public benefit corporation, its
sole member/manager
By:
Erika Villablanca,
Vice President
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