HomeMy WebLinkAboutContract 1920 DOC # 2021-0189517
Recording Requested By: 03/25/2021 02:46 PM Fees: $0.00
• First American Title Insurance Company Page 1 of 36
National Commercial Services,Ontario,CA Recorded in Official Records
`‘• N CS_gj2' 'c; 1 County of Riverside
o J Peter Aldana
RECORDING REQUESTED BY Assessor County Clerk Recorder
AND WHEN RECORDED MAIL TO:
**This document was electronically submitted
City of Cathedral City to the County of Riverside for recording**
68-700 Avenida Lalo Guerrero Receipted by: MARY#420
Cathedral City, CA 92234
Attention: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE§§6103, 27383
Space above this line for Recorder's use.
AFFORDABLE HOUSING REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
by and between
THE CITY OF CATHEDRAL CITY,
acting in its capacity as the Housing Successor Agency to the former Redevelopment
Agency of the City of Cathedral City
and
A0685 Cathedral City, L.P.
OAK #4845-2990-1670 v6
Recording Requested By:
R First American Title Insurance Company
National Commercial Services,Ontario,CA
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder's use.
AFFORDABLE HOUSING REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
by and between
THE CITY OF CATHEDRAL CITY,
acting in its capacity as the Housing Successor Agency to the former Redevelopment
Agency of the City of Cathedral City
and
A0685 Cathedral City,L.P.
OAK #9895-2990-1670 v6
•
This Affordable Housing Regulatory Agreement and Declaration of Restrictive
Covenants (this "Agreement") is entered into effective as of March 1, 2021 ("Effective Date")
by and between the City of Cathedral City, a municipal corporation, acting in its capacity as the
Housing Successor Agency to the former Redevelopment Agency of the City of Cathedral City
(in such capacity, referred to herein as the "Agency") and A0685 Cathedral City, L.P., a
California limited partnership("Owner"). The Agency and the Owner are collectively referred to
herein as the "Parties."
RECITALS
A. Owner is the owner of, or has the right to acquire,the real property consisting of
ten (10)vacant parcels located on Landau Avenue between Vega Road and Elizabeth Road, in
the City of Cathedral City, California, known as Riverside County Assessor's Parcel Nos. 678-
060-001, -002, -003, -004, -005, -049, -050, -052, and-053, and more particularly described in
Exhibit A attached hereto (the"Property").
B. Owner intends to develop, own, and operate an affordable multi-family housing
development consisting of sixty(60)apartments and related improvements (the"Project") in
accordance with that certain Disposition, Development, and Grant Agreement(the "DDA") dated
as of December 4, 2018, executed by and among Agency, Urban Housing Communities, LLC, a
California limited liability company("UHCand Ikaika Ohana, a Hawaii nonprofit corporation
and recorded in the Official Records of Riverside County on December 11, 2018 as Document
No., 2018-0481937. Owner assumed UHC's rights and obligations under the DDA pursuant to
an Assignment and Assumption Agreement dated as of April 29, 2019 and recorded in the
Official Records on May 2, 2019 as Document No. 2019-0152112. Capitalized terms used
without definition herein shall have the meaning ascribed to such terms in the DDA. A
Memorandum of the DDA ("Memorandum")will be recorded in the Official Records
substantially concurrently herewith.
C. The DDA provides that the Restricted Units to be developed on the Property will
be required to be available to Eligible Households at Affordable Rents in accordance with this
Agreement for a period of not less than fifty-five(55) years.
D. Subject to the terms and conditions set forth in the DDA, Agency has agreed to
convey the Property to Owner at a below-market price, and has agreed to provide a grant in the
amount of One Million Dollars ($1,000,000)to assist in financing the construction of the Project
(the "Grant"). As a condition precedent to the conveyance of the Property and the funding of the
Grant,Agency requires the Project and the Property to be subject to the terms, conditions and
restrictions set forth herein.
E. Pursuant to the DDA,to secure performance under this Agreement, Owner shall
execute and deliver to Agency a Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing that shall be executed by Owner for the benefit of Agency(the "Deed of Trust")
and recorded against the Property substantially concurrently herewith.
F. The purpose of this Agreement is to satisfy the affordability requirements of the
Agency's affordable housing program and to regulate and restrict the occupancy and rents of the
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Project's Restricted Units for the benefit of the Project occupants. The Parties intend the covenants set
forth in this Agreement to run with the land and to be binding upon Owner and Owner's successors
and assigns for the full term of this Agreement.
NOW THEREFORE, in consideration of the foregoing, and other valuable
consideration,the receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows.
1. Definitions. The following terms have the meanings set forth in this Section wherever
used in this Agreement or the attached exhibits.
"Actual Household Size" means the actual number of persons in the applicable
household.
"Adjusted for Family Size Appropriate for the Unit" shall be determined consistent
with Section 50052.5(h) of the California Health and Safety Code, subject to the application of
federal rules and regulations applicable to Project financing sources, including Section 42(g)(2)
of the Internal Revenue Code of 1986 as amended (or successor provision) if applicable.
"Affordable Rent" means the following amounts, less a utility allowance and other fees
and charges required to be paid by tenants of the Project on a non-optional basis: (i)for units
that are restricted for rental to households with incomes of not more than thirty percent(30%)of
AMI ("30% Units"), a monthly rent that does not exceed one-twelfth of thirty percent(30%)of
thirty percent(30%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit,
(ii) for units that are restricted for rental to households with incomes of not more than forty
percent(40%) of AMI("40% Units"), a monthly rent that does not exceed one-twelfth of thirty
percent(30%)of forty percent(40%) of Area Median Income, Adjusted for Family Size
Appropriate for the Unit, and (iii) for units that are restricted for rental to households with
incomes of not more than sixty percent(60%) of AMI("60% Units"), a monthly rent that does
not exceed one-twelfth of thirty percent(30%)of sixty percent(60%) of Area Median Income,
Adjusted for Family Size Appropriate for the Unit..
"Agency's Authorized Representative" means the City Manager of the City of
Cathedral City.
"Agency Documents" means the DDA, the Memorandum, the Deed of Trust, and
this Agreement.
"Area Median Income" or "AMI" means the median income for Riverside County,
California, adjusted for Actual Household Size, as determined by HUD pursuant to Section 8
of the United States Housing Act of 1937 and as published from time to time by the State of
California Department of Housing and Community Development ("HCD") in Section 6932
of Title 25 of the California Code of Regulations or successor provision.
"Claims" means collectively, liabilities, losses, costs, expenses (including without
limitation attorneys' fees and costs of litigation), claims, demands, actions, suits,judicial or
administrative proceedings, penalties, deficiencies, fines, orders, and damages.
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"DDA" is defined in Recital B.
"Deed of Trust" is defined in Recital E.
"Eligible Household"means a household for which household Gross Income upon
initial occupancy does not exceed the maximum income level for a Restricted Unit as specified
in Section 2.2 and Exhibit B and which includes at least one member who is a veteran.
"Gross Income" shall have the meaning set forth in Section 6914 of Title 25 of the
California Code of Regulations as such section may be revised from time to time.
"HUD" means the U.S. Department of Housing and Urban Development.
"Indemnitees" means collectively,the City,the Agency, and their respective elected and
appointed officers, officials, employees, agents, consultants, contractors and representatives.
"Marketing and Management Plan" is defined in Section 6.5.
"Official Records"means the Official Records of the Riverside County Recorder.
"Rent Restricted" is defined in Section 2.2.
"Restricted Unit" means a dwelling unit that is reserved for occupancy at an Affordable
Rent by Eligible Households of specified household income levels as set forth in Section 2.2 and
Exhibit B.
"UHC" is defined in Recital B.
2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its
successors and assigns, that throughout the term of this Agreement(as defined in Section 4.1
below), the Property shall be used solely for residential occupancy by Eligible Households in
compliance with the DDA and the requirements set forth in this Agreement. Owner represents
and warrants that it has not entered into any agreement that would restrict or compromise its ability
to comply with the occupancy and affordability restrictions set forth in this Agreement,and Owner
covenants that it shall not enter into any agreement that is inconsistent with such restrictions
without the express written consent of Agency.
2.1 Veterans Housing; Social Services. Owner shall ensure that supportive services
will be available to residents of the Property, and Owner shall provide or arrange for the
provision of supportive services to residents of the Property in accordance with the Plan
described in Section 6.5 below.
2.2 Affordability and Occupancy Requirements; Section 8. Throughout the term of
this Agreement(as defined in Section 4.1 below): (i)not less than twenty(20)of the residential
units in the Project shall be both Rent Restricted and occupied(or if vacant, available for
occupancy)by Eligible Households whose household Gross Income is no greater than thirty
percent(30%)of AMI, (ii)not less than ten(10)additional residential units in the Project shall
be both Rent Restricted and occupied (or if vacant, available for occupancy) by Eligible
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Households whose household Gross Income is no greater than forty percent(40%)of AMI, and
(iii)not less than twenty-nine(29)additional residential units in the Project shall be both Rent
Restricted and occupied (or if vacant, available for occupancy)by Eligible Households whose
household Gross Income is no greater than sixty percent(60%) of AMI. A dwelling unit shall
qualify as "Rent Restricted" if the gross rent charged for such unit does not exceed the
Affordable Rent for the applicable household income category as specified in this Section. One
(1) of the residential units in the Project shall be a manager's unit that will not be subject to rent
or occupancy restrictions. If necessary to ensure Project feasibility, the Authorized
Representative is authorized to approve modifications to the foregoing affordability restrictions
provided that all residential units except the manager's unit shall be available at Affordable Rents
to households whose income is no greater than sixty percent(60%)of Area Median Income.
Notwithstanding any contrary provision of this Agreement, if other Project lenders,
Project investors, or regulatory agencies restrict a greater number of units than restricted by this
Agreement or require stricter household income eligibility or affordability requirements than
those imposed hereby, the requirements (including without limitation,the rent and occupancy
requirements imposed in connection with the use of project based Section 8 vouchers, housing
choice vouchers, or other rent subsidies) of such other lenders, investors or regulatory agencies
shall prevail. Without limiting the generality of the foregoing, if any residential units in the
Project are subsidized with Section 8 project-based vouchers through a Housing Assistance
Payment Contract with HUD,the rules and regulations applicable to such
ram ro shall prevail
P g
with respect to the setting of rents, implementation of occupancy requirements, and
determination of household Gross Income for such units.
2.2.1 Loss of Subsidy. Owner shall in good faith apply for and accept all
available renewals for project-based rental assistance and/or operating subsidy for the Project. If
project-based rental assistance or operating subsidy for the Project is terminated or reduced,
Owner shall immediately notify Agency in writing, and shall make every effort to find alternative
subsidies or financing structures that would enable the rents, income-targeting, and occupancy
restrictions set forth in Section 2.2 to be maintained. If Owner documents to Agency's reasonable
satisfaction that Owner has been unsuccessful in its efforts to identify and obtain alternative
resources,then to the extent necessary to maintain Project Financial Feasibility(defined below)
as reasonably determined by Agency: Owner may increase rents and income targeting for 30%
Units and 40%Units above the levels allowed by Section 2.2 up to not greater than the rent and
income-targeting permitted for 60%Units. Rents shall be increased only to the extent and only
for the number of units required for Financial Feasibility, as reasonably determined by Agency.
Owner shall phase in any necessary rent increases as gradually as possible, consistent with
maintaining Project Financial Feasibility. Owner shall take measures to minimize disruption to
existing households. As used in this Agreement, "Financial Feasibility" means that the Project's
annual net operating income(i.e., gross annual income received minus operating expenses and
deposits into operating and replacement reserves in the amounts required by lenders that have
provided Project financing that is payable on a non-residual receipts basis) divided by annual
debt service payable on non-residual receipts loans equals 1.0. The increased rents and income-
targeting permitted pursuant to this Section 2.2.1 may remain in effect only for so long as
required to maintain Financial Feasibility. Owner will use best efforts to obtain alternate sources
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of financing that will enable the Project to comply with the rent and occupancy restrictions set
forth in Section 2.2.
2.3 Rents for Restricted Units. For all Restricted Units, rents shall be limited to
Affordable Rents for households of the applicable income limit in accordance with Section 2.2
and Exhibit B. The Restricted Units shall be allocated among affordability categories as set
forth in Section 2.2 and Exhibit B.Notwithstanding the foregoing, no tenant qualifying for a
Restricted Unit shall be denied continued occupancy of a unit in the Project because, after
admission, such tenant's household income increases to exceed the qualifying limit for such
Restricted Unit. A household which at initial occupancy qualifies in a particular income category
shall be treated as continuing to be of such income category so long as the household's Gross
Income does not exceed one hundred forty percent (140%) of the applicable income limit. In the
event the household Gross Income of a household that qualified at the applicable income limit at
initial occupancy exceeds the applicable income limit for a unit,that unit will continue to be
considered as satisfying the applicable income limit if the unit remains Rent-Restricted.
In the event that recertification of tenant incomes indicates that the number of Restricted
Units actually occupied by Eligible Households falls below the number reserved for each income
group as specified in this Section 2.2 and Exhibit B, Owner shall rectify the condition by renting
the next available dwelling unit(s) in the Project to Eligible Household(s) until the required
income mix is achieved.
If upon income recertification, a tenant household's income exceeds 80%of AMI
Adjusted for Actual Household Size, Owner may increase rent for such tenant to the lowest of
the following: (a) 30%of the tenant household's Gross Income, (b)the maximum rent allowed
under any affordability restrictions imposed by other Project lenders, and (c) if the Project has
been allocated low-income housing tax credits,the maximum rent allowed by Section 42 of the
Internal Revenue Code of 1986.
In the event of inconsistency between the provisions of this Section 2.3 and the rules
applicable to the Project in connection with low-income housingtax credits, the rules applicable
pp icable
to low-income housing tax credits shall prevail.
2.4 Manager's Unit. One (1) dwelling unit in the Project may be used as a resident
manager's unit, and shall be exempt from the occupancy and rent restrictions set forth in this
Agreement.
2.5 No Condominium Conversion. Owner shall not convert the residential units in the
Project to condominium or cooperative ownership or sell condominium or cooperative rights to the
residential units in the Project during the term of this Agreement.
2.6 Non-Discrimination; Compliance with Fair Housing Laws.
2.6.1 Intentionally omitted.
2.6.2 Fair Housing; Section 8 Vouchers. Owner shall comply with state and
federal fair housing laws in the marketing and rental of the units in the Project. Owner shall
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accept as tenants, on the same basis as all other prospective tenants,persons who are recipients of
federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or
any successor thereto.
2.6.3 Non-Discrimination. Owner shall not restrict the rental, sale, lease,
sublease, transfer, use, occupancy,tenure or enjoyment of the Property, or any portion thereof, on
the basis of race, color, religion, creed, sex, sexual orientation, gender identity, disability, marital
status, ancestry, age, or national origin of any person. Owner covenants for itself and all persons
claiming under or through it, and this Agreement is made and accepted upon and subject to the
condition 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 rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property
or part thereof,nor shall Owner or any person claiming under or through Owner 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, of, or for the Property or part thereof. Owner shall include such provision in all
deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same
diligently and in good faith.
All deeds, leases, and contracts pertaining to management of the Project, made or
entered into by Owner, its successors or assigns, as to any portion of the Property or the
Improvements shall contain the following language:
(a) (1) In Deeds, the following language shall appear:
Grantee herein covenants by and for itself, its successors and assigns, and all
persons claiming under or through it,that there shall be no discrimination against
or segregation of a person or of a 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
property 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
property herein conveyed. The foregoing covenant shall run with the land."
(2) Notwithstanding paragraph (1), with respect to familial status,paragraph
(1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing
in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10,
51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision(d)of Section 51 and Section 1360 of the Civil Code and
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subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1).
(b) (1) In Leases, the following language shall appear:
The lessee herein covenants by and for the lessee and lessee's heirs, personal
representatives and assigns, and all persons claiming under the lessee or through
the lessee, that this lease is made subject to the condition that there shall be no
discrimination against or segregation of any person or of a group of persons on
account of race, color, creed, religion, sex, sexual orientation, marital status,
national origin, ancestry or disability in the leasing, subleasing,transferring, use,
occupancy,tenure or enjoyment of the propertyherein leased nor shall the lessee
or any person claiming under or through the lessee establish or permit any such
Practice or practices of discrimination of segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the property herein leased.
(2) Notwithstanding paragraph(1), with respect to familial status,paragraph
(1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing
in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10,
51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision(d)of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1).
(c) In Contracts pertaining to management of the Project, the following
language, or substantially similar language prohibiting discrimination and
segregation shall appear:
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 property 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 selection,
location, number, use or occupancy of tenants, lessee, subtenants, sublessees or
vendees of the land.
(2) Notwithstanding paragraph ph (1), with respect to familial status,paragraph
(1) shall not be construed to apply to housing for older persons, as defined in
Section 12955.9 of the Government Code. With respect to familial status, nothing
in paragraph(1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10,
51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.
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Subdivision(d)of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p)of Section 12955 of the Government Code shall
apply to paragraph (1).
3. Reporting Requirements; Access to Information; Inspections; Annual Monitoring Fee.
3.1 Tenant Certification. Owner or Owner's authorized agent shall obtain from each
prospective tenant prior to initial occupancy of each Restricted Unit, and on every anniversary
thereafter, a written certificate containing all of the following in such format and with such
supporting documentation as Agency may reasonably require:
(i) The identity of each household member;
(ii) The total household Gross Income; and
(iii) The basis upon which each household qualifies as an Eligible Household.
Owner shall retain such certificates for not less than five (5)years, and upon Agency's request,
shall provide copies of such certificates to Agency and make the originals available for Agency
inspection.
3.2 Annual Report; Inspections. Following completion of construction of the Project,
by not later than April 1 of each year during the term of this Agreement, Owner shall submit an
annual report("Annual Report")to the Agency in form satisfactoryto Agency, together with
a
certification that the Project is in compliance with the affordability restrictions and occupancy
requirements of this Agreement. The Annual Report shall, at a minimum, include the following
information for each dwelling unit in the Project: (i) unit number; (ii)number of bedrooms; (iii)
current rent, utility, and other charges; (iv) dates of any vacancies during the previous year; (v)
number of people residing in the unit; (vi)total household Gross Income of residents; (vii)
documentation of source of household income; (viii) lease commencement and termination dates,
(ix) initial move-in date, and (x)the information required by Section 3.1.
Owner shall include with the Annual Report, an income recertification for each
household,documentation verifying tenant eligibility, and such additional information as Agency
may reasonably request from time to time in order to demonstrate compliance with this
Agreement. The Annual Report shall conform to the format requested by Agency;provided
however, during such time that the Project is subject to a regulatory agreement restricting
occupancy and/or rents pursuant to requirements imposed in connection with the use of state or
federal low-income housing tax credits or tax-exempt bond financing, Owner may satisfy the
requirements of this Section that pertain to tenant income certification and rents by providing
Agency with a copy of compliance reports required in connection with such financing.
In addition to the information described above, the Annual Report shall include the
following:
(i) A Project income and expense statement for the reporting period;
(ii) Proposed annual budget for the next fiscal year which sets forth Owner's
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estimate of operating income, operating expenses and debt service for the year, amounts payable
to reserves and proposed rent adjustments;
(iii) Information on the status of the waiting list for units, including the number
of households on the list;
(iv) A report on the operating reserve and replacement reserve accounts
summarizing draws of such funds and remaining balances;
(v) A report summarizing any significant repairs or maintenance undertaken
for the Project, and describing any remaining physical defects to be corrected and the budget for
such work;
(vi) A financial audit of the books and records of the Project prepared in
accordance with generally accepted auditing standards by an independent certified public
accountant.
(vii) Agency may from time to time request additional or different information,
and Owner shall promptly supply such information in the reports required hereunder.
3.3. Maintenance of Records.
3.3.1 Owner shall maintain all records regarding the construction of the Project
for five(5) years after final payment and all other pending matters are closed. Owner shall also
maintain tenant leases, income certifications and other matters related to the leasing of the
Project for a period of five (5)years after the final date of occupancy by the tenant.
3.3.2 Records must be kept accurate and up-to-date. Agency shall notify Owner
of any records it deems insufficient. Owner shall have fifteen (15)calendar days from such
notice to correct any specified deficiency in the records, or, if more than fifteen (15)days shall be
reasonably necessary to correct the deficiency, Owner shall begin to correct the deficiency within
fifteen (15) days and diligently pursue the correction of the deficiency as soon as reasonably
possible.
3.4 Access to Records; Inspections.
3.4.1 With at least 48-hours' notice, during normal business hours, Owner shall
provide Agency and its authorized agents and representatives access to the books, documents,
papers and records of the Project for the purpose of making audits, examinations, excerpts and
transcriptions.
3.4.2 With at least 48-hours' notice, during normal business hours and as often
as may be deemed necessary, Agency and its authorized agents and representatives shall be
permitted access to and the right to examine the Project and the Property and to interview tenants
and employees of the Project, for the purpose of verifying compliance with applicable regulations
and compliance with the conditions of this Agreement and the other Agency Documents.
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3.5 Monitoring Fee. Owner shall be obligated to pay to Agency an annual Affordable
Housing Monitoring Fee in the amount of$70 per unit for each residential unit in the Project that
is subject to the affordability restrictions set forth in the Regulatory Agreement. This per-unit fee
is payable at initial lease-up of each residential unit,upon each annual review, and upon re-
occupancy of any residential unit. The Agency will not charge an annual monitoring fee in the
same year that the Agency charges a fee in connection with the initial lease-up. All monitoring
fees shall be payable to Agency within fifteen(15)days following Agency's written request for
payment, and Agency shall have the right to file a lien against the Property if such fees are not
paid within thirty(30)days of such written request. Beginning in the third year after the
Agency's issuance of a final certificate of occupancy or equivalent for the Project,the annual
compliance monitoring fee will increase annually by the percentage increase in the Consumer
Price Index-Urban (CPI-U)for the Riverside-San Bernardino-Ontario, California area over the
prior year. In the event that in any year there is insufficient Project cash flow available to pay
the annual monitoring fee,the Agency will permit the fee to be deferred. Any deferred amounts
shall accrue and shall be payable from future Project cash flow.
4. Term of Agreement.
4.1 Term of Restrictions. This Agreement shall remain in effect until the fifty-fifth
(55th) anniversary of the date upon which the Agency issues a final certificate of occupancy or
equivalent for the Project. If such date cannot be ascertained,the term of this Agreement shall
end on the fifty-seventh (57th)anniversary of the Effective Date of this Agreement.
4.2 Effectiveness Succeeds Conveyance of Property. This Agreement shall remain
effective and fully binding for the full term hereof regardless of(i)any sale, assignment, transfer,
or conveyance of the Project or the Property, or any part thereof or interest therein,or(ii)any
reconveyance of the Deed of Trust.
4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to
execute and record appropriate instruments to release and discharge this Agreement; provided,
however, the execution and recordation of such instruments shall not be necessary or a
prerequisite to the termination of this Agreement upon the expiration of the term.
5. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects
its interest in the Property and the Project to the covenants and restrictions set forth in this
Agreement. The Agency and Owner hereby declare their express intent that the covenants and
restrictions set forth herein shall be deemed covenants running with the land and shall be binding
upon and inure to the benefit of the heirs, administrators,executors, successors in interest,
transferees,and assigns of Owner and Agency,regardless of any sale, assignment,conveyance or
transfer of the Property,the Project or any part thereof or interest therein. Any successor-in-interest
to Owner, including without limitation any purchaser,transferee or lessee of the Property or the
Project(other than the tenants of the individual dwelling units within the Project) shall be subject
to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and
every contract,deed,ground lease or other instrument affecting or conveying the Property or the
Project or any part thereof, shall conclusively be held to have been executed,delivered and accepted
subject to the covenants,restrictions, duties and obligations set forth herein,regardless of whether
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such covenants,restrictions,duties and obligations are set forth in such contract, deed, ground lease
or other instrument. If any such contract, deed, ground lease or other instrument has been
executed prior to the date hereof, Owner hereby covenants to obtain and deliver to Agency an
instrument in recordable form signed by the parties to such contract, deed, ground lease or other
instrument pursuant to which such parties acknowledge and accept this Agreement and agree to
be bound hereby. Owner agrees for itself and for its successors that in the event that a court of
competent jurisdiction determines that the covenants herein do not run with the land, such
covenants shall be enforced as equitable servitudes against the Property and the Project in favor
of Agency.
6. Property Management; Repair and Maintenance; Marketing; Reserves; Supportive
Services.
6.1 Management Responsibilities. Owner shall be responsible for all management
functions with respect to the Property and the Project, including without limitation the
selection of tenants, certification and recertification of household income and eligibility,
evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary'
repairs, replacement of capital items, and security. Agency shall have no responsibility for
management or maintenance of the Property or the Project.
6.2 Management Entity; Social Service Provider. Agency shall have the right to
review and approve the qualifications of the management entity and the social services
provider proposed by Owner for the Project, and shall have the right to review and approve any
property management agreement and social services agreement executed between Owner and
such entities. which approvals shall not be unreasonably withheld. The contracting of
management services to a management entity shall not relieve Owner of its primary
responsibility for proper performance of management duties. Agency hereby approves Hyder
and Company, a California corporation, as the initial management entity for the Project and
Lighthouse, a California nonprofit corporation, as the initial social services provider for the
Project. Any subsequent management entity or social services provider shall be subject to
Agency review and approval, which shall not be unreasonably withheld or delayed. Upon
Agency determination and delivery of written notice to Owner that Owner has failed to operate
the Project in accordance with this Agreement, Agency may require Owner to contract with a
qualified management agent selected by Agency and approved by the Project lender and equity
investor,to operate the Project, or to make such other arrangements as Agency deems necessary
to ensure performance of the required functions.
6.3 Repair, Maintenance and Security. Throughout the term of this Agreement,
Owner shall at its own expense, maintain the Property and the Project in good physical condition,
in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in
conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations.
Without limiting the foregoing, Owner agrees to maintain the Project and the Property(including
without limitation, the residential units, common areas, meeting rooms, landscaping, driveways,
parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained
landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take
all reasonable steps to prevent the same from occurring on the Property or at the Project. Owner
shall prevent and/or rectify any physical deterioration of the Property and the Project and
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shall make all repairs, renewals and replacements necessary to keep the Property and the
improvements located thereon in good condition and repair. Owner shall provide adequate
security measures for the Project, including without limitation, the installation of adequate
lighting and deadbolt locks.
6.3.1 Additional Requirements. All construction/rehabilitation work and
professional services for the Project shall be performed by persons or entities licensed or
otherwise authorized to perform the applicable work or service in the State of California and
shall have a current City of Cathedral City business license if required under local law. To the
extent allowed by state and federal laws, Owner shall limit the installation of satellite dish,
antenna and other such equipment to screened locations on the Property as approved by the
Agency. Owner shall diligently work to resolve complaints related to noise, parking, litter or
other neighborhood concerns.
6.4 Agency's Right to Perform Maintenance. In the event that Owner breaches any of
the covenants contained in Section 6.3, and such default continues for a period of ten(10) days
after written notice from Agency(with respect to graffiti, debris, and waste material)or thirty
(30)days after written notice from Agency(with respect to landscaping, building improvements
and general maintenance),then Agency, in addition to any other remedy it may have under this
Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the
Property and perform all acts and work necessary to protect, maintain, and preserve the
improvements and the landscaped areas on the Property. All costs expended by Agency in
connection with the foregoing, shall constitute an indebtedness secured by the Deed of Trust, and
shall be paid by Owner to Agency upon demand. All such sums remaining unpaid thirty(30)
days following delivery of Agency's invoice therefor shall bear interest at the lesser of 10%per
annum or the highest rate permitted by applicable law. Agency shall have a lien against the
Property for the amount of such unpaid sums, and shall have the right to record a Notice of Claim
of Lien against the Property.
6.5 Marketing and Management Plan; Rental Agreements. Not later than ninety
(90) days following commencement of construction work on the Project, Owner shall
submit for Agency review and approval, a plan for marketing and managing the Property
("Marketing and Management Plan" or"Plan"). The Marketing and Management Plan shall
address in detail how Owner plans to market the Project to prospective Eligible Households in
accordance with fair housing laws and this Agreement, Owner's tenant selection criteria, and how
Owner plans to certify the eligibility of Eligible Households. The Plan shall also describe the
management team and shall address how the Owner and the management entity plan to manage
and maintain the Property and the Project. The Plan shall include the proposed management
agreement and the form of rental agreement that Owner proposes to enter into with Project
tenants. In addition, the Plan shall include information regarding the qualifications of the
proposed social services provider, a copy of the proposed social services agreement,and a
description of the services to be provided to residents. Owner shall abide by the terms of the
approved Marketing and Management Plan in marketing,managing, and maintaining the Property
and the Project, and throughout the term of this Agreement, shall submit proposed modifications
to Agency for review and approval.
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In addition to the foregoing,the Marketing and Management Plan shall address the
following:
(a) The actions to be taken by Owner to affirmatively market units in
compliance with fair housing laws and in compliance with Agency's policies and
procedures, including the policies described in Section 2.6 above;
(b) Criteria for determining tenant eligibility, including certification of
household income and size, and establishing reasonable occupancy standards (which shall
not exceed standards established by state and federal fair housing laws and state housing
and building codes), and procedures for screening prospective tenants, including
obtaining credit reports, unlawful detainer reports, landlord references, and criminal
background investigations;
(c) A requirement that eligible tenants be selected based on order of
application, lottery or other reasonable method approved by Agency;
(d) A requirement that eligible applicants be notified of eligibility and be
provided an estimate regarding when a unit may be available;
(e) A requirement that ineligible applicants be notified of the reason for their
ineligibility;
(f) Specific procedures through which applicants deemed to be ineligible may
appeal this determination;
(g) Maintenance of a waiting list of eligible applicants;
(h) Specific procedures for obtaining documentation regarding prospective
tenants' incomes, as necessary,to certify that such income does not exceed income limits;
(i) Specific procedures for certification and recertification of household
incomes and procedures for handling over-income tenants;
(j) A requirement that a written rental agreement(in form approved by
Agency) be executed with each Eligible Household selected to occupy a unit;
(k) A detailed listing of reasonable rules of conduct and occupancy which
shall be in writing, shall be consistent with federal and state law, and shall be provided to
each tenant upon occupancy;
(I) A requirement that there be no storage on balconies and patios and that
tenants must keep all balconies,patios and other exterior areas neat, clean and clutter free,
including no clotheslines or laundry;
(m) A parking management plan which details, among other things, how
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parking spaces will be assigned, how guest parking will be handled and how parking will
be managed to encourage tenants to use their assigned parking spaces;
(n) Procedures for maintenance and management of the Project;
(o) Procedures for dealing with tenant or neighborhood issues or concerns;
(p) Procedures for maintaining a reserve account, budgeting for maintenance
and repair needs as well as long-term rehabilitation needs, and handling net cash flow;
and
(q) Such other requirements and criteria/procedures as Agency may
reasonably determine appropriate.
6.6 Approval of Amendments. If Agency has not responded to any submission of the
Management and Marketing Plan, the proposed management entity,the proposed management
agreement, or a proposed amendment or change to any of the foregoing within sixty(60)days
following Agency's receipt of such plan, proposal, agreement or amendment, the plan, proposal,
agreement, or amendment shall be deemed approved by Agency.
6.7 Fees, Taxes,and Other Levies. Owner shall be responsible for payment of all fees,
assessments,taxes, charges, liens and levies applicable to the Property or the Project, including
without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall
pay such charges prior to delinquency. However, Owner shall not be required to pay any such
charge so long as (a) Owner is contesting such charge in good faith and by appropriate
proceedings, (b) Owner maintains reserves adequate to pay any contested liabilities, and (c)on
final determination of the proceeding or contest, Owner immediately pays or discharges any
decision or judgment rendered against it,together with all costs, charges and interest. The
foregoing is not intended to impair Owner's ability to apply for any applicable exemption from
property taxes or other assessments and fees.
6.8 Insurance Coverage. Throughout the term of this Agreement Owner shall comply
with the insurance requirements set forth in Exhibit C, and shall,at Owner's expense,maintain in
full force and effect insurance coverage as specified in Exhibit C.
6.9 Property Damage or Destruction. If any part of the Project is damaged or
destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent
restriction requirements set forth in this Agreement. Such work shall be commenced as soon
as reasonably practicable after the damage or loss occurs and shall be completed within one
year thereafter or as soon as reasonably practicable, provided that insurance proceeds are
available to be applied to such repairs or restoration within such period and the repair or
restoration is financially feasible. During such time that lenders or low-income housing tax
credit investors providing financing for the Project impose requirements that differ from the
requirements of this Section the requirements of such lenders and investors shall prevail.
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6.10 Reserves. Owner shall establish and maintain operating and replacement reserves
in the amounts required by Project lenders and investors. Agency's advance written consent
shall be required for withdrawals from reserves for non-routine expenses exceeding the sum of
$20,000.
7. Recordation; Subordination. This Agreement shall be recorded in the Official Records.
The Agency agrees that the Agency will not withhold consent to reasonable requests for
subordination of this Agreement to deeds of trust provided for the benefit of lenders identified in
the Financing Plan submitted to, and approved by, Agency for the Project, as such plan may be
updated with Agency approval, provided that the instruments effecting such subordination
include reasonable protections to the Agency in the event of default, including without limitation,
extended notice and cure rights.
8. Transfer and Encumbrance.
8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement,
except as permitted pursuant to the DDA or this Agreement, Owner shall not directly or
indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial
sale,transfer, conveyance, assignment or lease (collectively, "Transfer") of the whole or any
part of the Property, the Project, or the improvements located on the Property, without the prior
written consent of the Agency, which approval shall not be unreasonably withheld. In addition,
prior to the expiration of the term of this Agreement, except as expressly permitted by this
Agreement or the DDA, Owner shall not undergo any significant change of ownership without
the prior written approval of Agency. For purposes of this Agreement, a"significant change of
ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent
(25%) in aggregate of the present ownership and/or control of Owner, taking all transfers into
account on a cumulative basis; provided however, neither the admission of an investor limited
partner, nor the transfer by the investor limited partner to subsequent limited partners shall be
restricted by this provision.
8.2 Permitted Transfers. Notwithstanding any contrary provision of the Agency
Documents,the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the
granting of easements or permits to facilitate development of the Property; (ii)the dedication of
any property required pursuant to the DDA; (iii)the lease of commercial space, and the lease of
individual dwelling units to tenants for occupancy as their principal residence in accordance with
this Agreement; (iv) assignments creating security interests for the purpose of financing the
acquisition, construction, or permanent financing of the Project or the Property in accordance
with the Financing Plan approved by Agency, or Transfers directly resulting from the foreclosure
of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) a Transfer to a tax-
exempt entity under the direct control of or under common control with UHC; (vi) a Transfer to a
limited partnership in which UHC or a wholly-controlled a tax-exempt affiliate of UHC is the
managing general partner("Approved Partnership"); (vii)the admission of limited partners and
any transfer of limited partnership interests in accordance with Owner's, or the Approved
Partnership's, as applicable, agreement of limited partnership(the"Partnership Agreement");
(viii)the removal of the general partner by the investor limited partner for cause in accordance
with the terms of the Partnership Agreement,provided that the replacement general partner is an
entity reasonably satisfactory to Agency or is an affiliate of the investor limited partner that will
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serve as general partner for an interim period of no more than 180 days during which time a
permanent replacement general partner reasonably satisfactory to Agency shall be identified and
admitted; or(ix)the transfer of the general partner's interest to a nonprofit entity that is tax-
exempt under Section 501(c)(3)of the Internal Revenue Code of 1986 as amended(or to an
entity wholly-owned thereby),provided such replacement general partner is reasonably
satisfactory to Agency.
8.3 Requirements for Proposed Transfers. The Agency may, in the exercise of its sole
discretion, consent to a proposed Transfer of this Agreement,the Property, the Improvements or
part thereof if all of the following requirements are met(provided however,the requirements of
this Section 8.3 shall not apply to Transfers described in clauses(i), (ii), (iii), (iv), and (vii) of
Section 8.2, and solely with respect to (a)the removal of the general partner by the investor
limited partner for a default under the Partnership Agreement,and(b)the replacement of the
general partner with an affiliate of the investor limited partner for an interim period of not more
than 180 days, clause (viii) of Section 8.2 (provided that the provisions of this Section 8.3 shall
apply to the selection of a replacement general partner in the event of a removal of the general
partner in accordance with clause (viii) of Section 8.2):
(i) The proposed transferee demonstrates to the Agency's satisfaction that it
has the qualifications, experience and financial resources necessary and adequate as may be
reasonably determined by the Agency to competently complete construction and manage the
Project and to otherwise fulfill the obligations undertaken by the Owner under this Agreement.
(ii) The Owner and the proposed transferee shall submit for Agency review
and approval all instruments and other legal documents proposed to effect any Transfer of all or
any part of or interest in the Property,the Improvements or this Agreement together with such
documentation of the proposed transferee's qualifications and development capacity as the
Agency may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and
obligations of the Owner under this Agreement and the other Agency Documents arising after the
effective date of the Transfer and all obligations of Owner arising prior to the effective date of
the Transfer(unless Owner expressly remains responsible for such obligations)and shall agree to
be subject to and assume all of Owner's obligations pursuant to the Conditions of Approval and
all other conditions, and restrictions set forth in this Agreement.
(iv) The Transfer shall be effectuated pursuant to a written instrument
satisfactory to the Agency in form recordable in the Official Records.
Consent to any proposed Transfer may be given by the Agency's Authorized
Representative unless the Agency's Authorized Representative, in his or her discretion, refers the
matter of approval to the City Council. If the Agency has not rejected a proposed Transfer or
requested additional information regarding a proposed Transfer in writing within forty-five (45)
days following Agency's receipt of written request by Owner, the proposed Transfer shall be
deemed approved.
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8.4 Effect of Transfer without Agency Consent. In the absence of specific written
agreement by the Agency, no Transfer of the Property or the Project shall be deemed to relieve
the Owner or any other party from any obligation under this Agreement. It shall be an Event of
Default hereunder entitling Agency to pursue remedies including without limitation, foreclosure
under the Deed of Trust if without the prior written approval of the Agency, Owner assigns or
Transfers this Agreement, the Improvements, or the Property in violation of Section 8. This
Section 8.4 shall not apply to Transfers described in clauses(i), (ii), (iii), (iv), and (vii) of Section
8.2, and solely with respect to (a)the removal of the general partner by the investor limited
partner for a default under the Partnership Agreement, and (b)the replacement of the general
partner with an affiliate of the investor limited partner for an interim period of not more than 180
days, clause (viii) of Section 8.2.
8.5 Recovery of Agency Costs. Owner shall reimburse Agency for all Agency costs,
including but not limited to reasonable attorneys' fees, incurred in reviewing instruments and
other legal documents proposed to effect a Transfer under this Agreement and in reviewing the
qualifications and financial resources of a proposed successor, assignee, or transferee within ten
(10) days following Agency's delivery to Owner of an invoice detailing such costs.
8.6 Encumbrances. Owner agrees to use best efforts to ensure that all deeds of trust
or other security instruments and any applicable subordination agreement recorded against the
Property, the Project or part thereof for the benefit of a lender other than Agency("Third-Party
Lender") shall contain each of the following provisions: (i) Third-Party Lender shall use its best
efforts to provide to Agency a copy of any notice of default issued to Owner concurrently with
provision of such notice to Owner; (ii)Agency shall have the reasonable right, but not the
obligation,to cure any default by Owner within the same period of time provided to Owner for
such cure extended by an additional ninety(90)days; (iii)provided that Agency has cured any
default under Third-Party Lender's deed of trust and other loan documents, Agency shall have
the right to foreclose the Deed of Trust, and take title to the Property and the Project without
acceleration of Third-Party Lender's debt; and (iv) Agency shall have the right to transfer the
Property and the Project without acceleration of Third-Party Lender's debt to a nonprofit
corporation or other entity which shall own and operate the Project as an affordable rental
housing development, subject to the prior written consent of the Third-Party Lender. Owner
agrees to provide to Agency a copy of any notice of default Owner receives from any Third-Party
Lender within three (3) business days following Owner's receipt thereof.
8.7 Mortgagee Protection. No violation of any provision contained herein shall defeat
or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon
all or any portion of the Project or the Property, and the purchaser at any trustee's sale or
foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the
acquisition of title by such purchaser. Unless this Agreement is subordinated in accordance with
Section 7 above, such purchaser shall be bound by and subject to this Agreement from and after
such trustee's sale or foreclosure sale. Promptly upon determining that a violation of this
Agreement has occurred,Agency shall give written notice to the holders of record of any
mortgages or deeds of trust encumbering the Project or the Property that such violation has
occurred.
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9. Default and Remedies.
9.1 Events of Default. The occurrence of anyone or more of the followingevents
shall constitute an event of default hereunder("Event of e ault"):
(i) The occurrence of a Transfer in violation of Section 8 hereof;
(ii) Owner's failure to maintain insurance on the Property and the Project as
required hereunder, and the failure of Owner to cure such default within five (5)days;
(iii) Subject to Owner's right to contest the following charges, Owner's failure
to pay taxes or assessments due on the Property or the Project or failure to pay any other charge
that may result in a lien on the Property or the Project, and Owner's failure to cure such default
within twenty(20) days of delinquency, but in all events prior to the date upon which the holder
of any such lien has the right to foreclose thereon;
(iv) A default arises under any loan secured by a mortgage, deed of trust or
other security instrument recorded against the Property and remains uncured beyond any
applicable cure period such that the holder of such security instrument has the right to accelerate
repayment of such loan;
(v) A default arises under the DDA or the Deed of Trust,that remains uncured
beyond the expiration of any applicable cure period; or
(vi) Owner's default in the performance of any term,provision or covenant
under this Agreement(other than an obligation enumerated in this Section 9.1), and unless such
provision specifies a shorter cure period for such default, the continuation of such default for ten
(10)days in the event of a monetary default or thirty(30) days in the event of a non-monetary
default following the date upon which Agency shall have given written notice of the default to
Owner, or if the nature of any such non-monetary default is such that it cannot be cured within
thirty(30)days, Owner's failure to commence to cure the default within thirty(30)days and
thereafter prosecute the curing of such default to completion with due diligence and in good faith
but in no event longer than ninety(90)days from receipt of the notice of default.
The limited partners of Owner shall have the right to cure any default of Owner hereunder
upon the same terms and conditions afforded to Owner; provided however, if the default is of
such nature that the limited partners reasonably determine that it is necessary to replace the
general partner of Owner in order to cure such default,then the cure period shall be extended by
an additional sixty(60)days after the removal and replacement of such general partner,provided
that the limited partners have promptly commenced and diligently proceeded with all requisite
actions to effect such removal and replacement. Agency shall provide a copy of any notice of
default hereunder to the limited partners at the address set forth in Section 11.3 hereof, or to such
other address provided to the Agency in writing, concurrently with the provision of such notice to
Owner.
9.2 Remedies. Upon the occurrence of an Event of Default and its continuation
beyond any applicable cure period, Agency may proceed with any of the following remedies:
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•
(i) Bring an action for equitable relief seeking the specific performance of the terms
and conditions of this Agreement, and/or enjoining, abating, or preventing any
violation of such terms and conditions, and/or seeking declaratory relief;
(ii) Proceed with foreclosure under the Deed of Trust;
(iii) For violations of obligations with respect to rents for Restricted Units, impose a
charge in an amount equal to the actual amount collected in excess of the
Affordable Rent; or
(iv) Pursue any other remedy allowed under the Agency Documents or at law or in
equity.
Each of the remedies provided herein is cumulative and not exclusive. The Agency may
exercise from time to time any rights and remedies available to it under applicable law or in
equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this
Agreement.
10. Indemnity. To the greatest extent permitted by law, Owner shall indemnify,defend (with
counsel approved by Agency) and hold the Indemnitees harmless from and against all Claims
arising directly or indirectly, in whole or in part, as a result of or in connection with Owner's
construction, management, or operation of the Property and the Project, or Owner's employees',
agents', contractors', or subcontractors' failure to comply with applicable law, including without
limitation state and federal fair housing laws, or failure to perform any obligation as and when
required by this Agreement. Owner's indemnification obligations under this Section 10 shall not
extend to Claims to the extent resulting from the gross negligence or willful misconduct of
Indemnitees. The provisions of this Section 10 shall survive the expiration or earlier termination
of this Agreement.
10.1 Terms Applicable to Indemnity Provisions. The terms set forth in this Section
10.1 shall apply to all provisions of this Agreement that pertain to Owner's obligations to
indemnify Agency and the other Indemnitees, including without limitation, Section 10. In
connection with each such provision, all of the following shall apply:
(a) Agency does not and shall not waive any rights that it may have by reason of any
indemnity and hold harmless provision set forth in this Agreement because of the acceptance by
Agency, or the deposit with Agency by Owner, of any of the insurance policies described in this
Agreement.
(b) Owner's obligation to indemnify the Indemnitees shall not be limited or impaired
by any of the following: (i)any amendment or modification of any Agency Document; (ii) any
extensions of time for performance required by any Agency Document; (iii)any provision in any
of the Agency Documents limiting Agency's recourse to property securing the Secured
Obligations (as defined in the Deed of Trust),or limiting the personal liability of Owner, or any
other party under the Agency Documents; (iv)the accuracy or inaccuracy of any representation
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OAK #4845-2990-1670 v6
and warranty made by Owner under this Agreement or by Owner or any other party under any
Agency Document, (v)the release of Owner or any other person, by Agency or by operation of
law, from performance of any obligation under any Agency Document; (vi)the release or
substitution in whole or in part of any security; and (vii)Agency's failure to properly perfect any
lien or security interest given as security for performance of Developer's obligations under the
Agency Documents.
(c) The obligations of Owner to indemnify the Indemnitees shall survive any
foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and
any release of record of the lien of the Deed of Trust or this Agreement.
11. Miscellaneous.
11.1 Amendments. This Agreement may be amended or modified only by a written
instrument signed by both Parties and recorded in the Official Records.
11.2 No Waiver. Any waiver by Agency of any term or provision of this Agreement
must be in writing. No waiver shall be implied from any delay or failure by Agency to take
action on any breach or default hereunder or to pursue any remedy allowed under this Agreement
or applicable law. No failure or delay by Agency at any time to require strict performance by
Owner of any provision of this Agreement or to exercise any election contained herein or any
right, power or remedy hereunder shall be construed as a waiver of any other provision or any
succeeding breach of the same or any other provision hereof or a relinquishment for the future of
such election.
11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to
this Agreement shall be made in writing, and sent to the Parties at their respective addresses
specified below or to such other address as a Party may designate by written notice delivered to
the other parties in accordance with this Section. All such notices shall be sent by: (i)personal
delivery, in which case notice is effective upon delivery; (ii)certified or registered mail, return
receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is
confirmed by a return receipt; or(iii)nationally recognized overnight courier,with charges
prepaid or charged to the sender's account, in which case notice is effective on delivery if
delivery is confirmed by the delivery service.
Agency: City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: City Manager
Owner: A0685 Cathedral City, L.P.
2000 E. Fourth Street,#205
Santa Ana, CA 92705
Attention: John F. Bigley
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With a copy to:
Law Offices of Patrick R. Sabelhaus
1724 10th Street, Suite 110
Sacramento, CA 95811
Attention: Stephen A. Strain
11.4 Further Assurances. The Parties shall execute,acknowledge and deliver to the
other such other documents and instruments, and take such other actions, as either shall
reasonably request as may be necessary to carry out the intent of this Agreement.
11.5 Parties Not Co-Venturers; Independent Contractor;No Agency Relationship.
Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers,
or principal and agent with one another. The relationship of Owner and Agency shall not be
construed as a joint venture, equity venture,partnership or any other relationship. Agency
neither undertakes nor assumes any responsibility or duty to Owner(except as expressly provided
in this Agreement)or to any third party with respect to the Project. Owner and its employees are
not employees of Agency but rather are, and shall always be considered independent contractors.
Furthermore, Owner and its employees shall at no time pretend to be or hold themselves out as
employees or agents of Agency. Except as Agency may specify in writing, Owner shall not have
any authority to act as an agent of Agency or to bind Agency to any obligation.
11.6 Action by the Agency. Except as may be otherwise specifically provided herein,
whenever anyapproval, notice, direction,
ppconsent or request by the Agency is required or
g Y
permitted under this Agreement, such action shall be in writing, and such action may be given,
made or taken by the Agency's Authorized Representative or by any person who shall have been
designated by the Agency's Authorized Representative, without further approval by the City
Council.
11.7 Non-Liability of Agency and Agency Officials, Employees and Agents. No
member, official, employee or agent of the Agency shall be personally liable to Owner or any
successor in interest, in the event of any default or breach by the Agency, or for any amount of
money which may become due to Owner or its successor or for any obligation of Agency under
this Agreement.
11.8 Headings; Construction; Statutory References. The headings of the sections and
paragraphs of this Agreement are for convenience only and shall not be used to interpret this
Agreement. The language of this Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any Party. All references in this Agreement to particular
statutes, regulations, ordinances or resolutions of the United States,the State of California, or the
City of Cathedral City shall be deemed to include the same statute, regulation, ordinance or
resolution as hereafter amended or renumbered, or if repealed,to such other provisions as may
thereafter govern the same subject.
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11.9 Time is of the Essence. Time is of the essence in the performance of this
Agreement.
11.10 Governing Law; Venue. This Agreement shall be construed in accordance with
the laws of the State of California without regard to principles of conflicts of law. Any action to
enforce or interpret this Agreement shall be filed and heard in the Superior Court of Riverside
County, California or in the Federal District Court for the Central District of California.
11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to
interpret or enforce the terms of this Agreement,the prevailing party shall be entitled to recover all
reasonable attorneys'fees and costs incurred in such action.
11.12 Severability. If any provision of this Agreement is held invalid, illegal, or
unenforceable by a court of competent jurisdiction,the validity, legality, and enforceability of
the remaining provisions shall not be affected or impaired thereby.
11.13 Entire Agreement; Exhibits. This Agreement, together with the DDA,the Grant
Deed, and the Deed of Trust, contains the entire agreement of Parties with respect to the subject
matter hereof, and supersedes all prior oral or written agreements between the Parties with •
respect thereto. Exhibits A through C, attached hereto are incorporated herein by this reference.
11.14 Survival. Owner's obligations pursuant to Section 10, and all other provisions
that expressly so state, shall survive the expiration or termination of this Agreement.
11.15 Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be an original and all of which together shall constitute one agreement.
SIGNATURES ON FOLLOWING PAGE(S).
23
OAK #4845-2990-1670 v6
IN WITNESS WHEREOF,the Parties have executed this Affordable Housing Regulatory
Agreement and Declaration of Restrictive Covenants as of the date first written above.
AGENCY:
City of Cathedral City,a municipal corporation,acting in its capacity as the Housing Successor
Agenc to +y ormer Redevelopment Agency of the City of Cathedral City
.ice ._ _
Print Name: elmtieJ (
Title: Ci i7 41/Ab ��
U
APPROVED AS TO FORM:
COUNTERPART
City Attorney
OWNER:
A0685 Cathedral City. L.P.,a California limited partnership
By: A0685 Cathedral City Holdings LLC,a California limited liability company
Its: Managing General Partner
By: Ikaika Ohana, a Hawaii nonprofit corporation
Its: Sole Member and Manager
By: COUNTERPART
John F.Bigley
Its: Secretary
By: A0685 Cathedral City Admin Holdings LLC,a California limited liability company
Its: Administrative General Partner
By: COUNTERPART
John F.Bigley
Its: Manager
SIGNATURES MUST BE NOTARIZED.
OAA 114845-2990-1674 v6 24
IN WITNESS WHEREOF,the Parties have executed this Affordable Housing Regulatory
Agreement and Declaration of Restrictive Covenants as of the date first written above.
AGENCY:
City of Cathedral City, a municipal corporation, acting in its capacity as the Housing Successor
Agency to the former Redevelopment Agency of the City of Cathedral City
By: COUNTERPART
Print Name:
Title:
APPROVED AS TO FORM:
5M-e4/1/d2e'r,Y,6-CA—.
pc lc City Attorney j S A-KJk 8 LCC i4
OWNER:
A0685 Cathedral City,L.P., a California limited partnership
By: A0685 Cathedral City Holdings LLC, a California limited liability company
Its: Managing General Partner
By: Ikaika Ohana,a Hawaii nonprofit corporation
Its: Sole Member and Manager
By: COUNTERPART
John F. Bigley
Its: Secretary
By: A0685 Cathedral City Admin Holdings LLC, a California limited liability company
Its: Administrative General Partner
By: COUNTERPART
John F. Bigley
Its: Manager
SIGNATURES MUST BE NOTARIZED.
OAK #4845-2990-1670 v6 24
IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory
Agreement and Declaration of Restrictive Covenants as of the date first written above.
AGENCY:
City of Cathedral City, a municipal corporation, acting in its capacity as the Housing Successor
Agency to the former Redevelopment Agency of the City of Cathedral City
By: COUNTERPART
Print Name:
Title:
APPROVED AS TO FORM:
COUNTERPART
City Attorney
OWNER:
A0685 Cathedral City, L.P., a California limited partnership
By: A0685 Cathedral City Holdings LLC, a California limited liability company
Its: Managing General Partner
By: Ikaika Ohana, a Hawaii nonprofit corporation
Its: Sole Member and Manager
By: . ' /
Jo F. B.40
Its: Secretary
By: A0685 Cathedral City Admin Holdings LLC, a California limited liability company
Its: Administrative General Partner
By: � i
Joh i'. Bigl y
Its: Ma o ger
SIGNATURES MUST BE NOTARIZED.
OAK #4845-2990-1670 v6 24
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached,and not the truthfulness,
accuracy,or validity of that document.
State of California )
)ss
County of pil\,7v' I (e- )
On 1Y 4Y'(.h 22iIZ I ,before me,Train12.
.Name of Notary)
notary public,personally appeared C 1hJA des s P-
who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s)is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies),and that by his/her/their signature(s)on the instrument the
person(s),or the entity upon behalf of which the person(s)acted,executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal. TRACT v R.MARTINEz
(� k)---171(f)L4--4
� �� " Notary Public-California
/C J ►s ! Z `^ Riverside County
�t/(N Signa re) 94:4'0. Commission x 2282778
�I My Comm.Expires Apr 21,2023
OAK 84845-2990-1670 v6 25
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss
County of 4-r.,,i2 )
0n/Vi (I 6/20,21 , before me, C-r l 0 Vpi.r Pv,-4 4C ,
(Name o Notary) y
r
notary public,personally appeared Tdv‘c: (3[5Ltj1
who proved to me on the basis of satisfactory eviden&e to the person(s)whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing part ;.ph is true and correct.
Wy h., d and official seal.
� r
illv `��f CESAR DELGADO
/`_� ` Y_ NotaryPublic•GHfornia
_ W, 1
_,,. ?=^ Orange County
(Notary Signa re) 4 Commission N 2334228
'ii,co, My Comm.Expires Sep I3,2024
OAK #4845-2990-1670 v6 25
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
)ss
County of Ore-rJQ, )
On Marv/. /c 2 Z(, before me, a—SGQ/ 4,W✓ VU 0lj/(C.
(Name of IQotary)
notary public,personally appeared V1i&,s ' c'3•/�Li/
who proved to me on the basis of satisfactory evidence to bc�the person(s)whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I ce•%• und;r ' .NALTY OF PERJURY under the laws of the State of California that the
fo• going ..ragra h is true and correct.
'1ITN ' my han, and official seal.
'/11......_ _ -/
(Notary Signat e)
,,"°`rti CESAR DELGADQ
, > Notary Public•California
i s jam=c Orange County !
I ,(;,: „0,,,,,.., _Commission#2334228
°•` My Comm.Expires Sep 23, 2024
1 OAK #4895-2990-1670 v6 26
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss
County of )
On , before me,
(Name of Notary)
notary public,personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Notary Signature)
OAK #4845-2990-1670 v6 27
Exhibit A
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Cathedral City, County of Riverside, State of California, described as follows:
PARCEL A:
PARCEL A OF LOT MERGER/LOT LINE ADJUSTMENT NO. 2020-529 RECORDED JANUARY 25, 2021
AS INSTRUMENT NO. 2021-0048173 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
All of Lots 101 through 107 and a portion of Lot 108 inclusive as shown by Assessors Map No. 46 on file in
Book 2 Page 3 of Assessor's Maps, in the Office of the County Recorder of Riverside County, in the City of
Cathedral City, State of California, lying within the Northwest quarter of the Southwest quarter of the
Northwest quarter of Section 16, Township 4 South, Range 5 East, San Bernardino Meridian, more
particularlydescribed as follows:
COMMENCING at the Northeast Corner of Lot C as shown by Tract No. 26424 on file in Book 257 Pages
49 and 50 inclusive records of said County, said point also being the Southeast Corner of Lot 110 as
shown on said Assessor's Map;
THENCE along the North line of said Lot C of said Tract Map and South line of said Lot 110 and
subsequent Lots 109 and 108 of said Assessor's Map, North 89°27'13"West, a distance of 174.56 feet to
the TRUE POINT OF BEGINNING;
THENCE continuing along said line and South line of subsequent descending Lots 107 through 101
inclusive North 89°27'13"West, a distance of 447.85 feet to a point on the Easterly Sideline of Landau
Boulevard (40.00 foot half width Right of Way) as shown on said Assessor's Map said point also being the
Southwest corner of said Lot 101;
THENCE along said Easterly Sideline and West Lot line, North 00°08'23" East, a distance of 632.52 feet to
the Southerly Sideline of Frank/Vega Road (30.00 foot half width Right of Way) as shown on said
Assessor's Map said point also being the Northwest corner of said Lot 101;
THENCE along said Sideline and North line of said Lot 101 and subsequent Lots 102 through 108, South
89°34'59" East, a distance of 452.34 feet to a point being 169.90 feet distant from the Northeast Corner
of said Lot 110;
THENCE South 00°32'47"West, a distance of 633.52 feet to the TRUE POINT OF BEGINNING.
APN: 678-060-001 through 005, and 49, 50 and a portion of 52.
OAK #4845-2990-1670 v6 28
PARCEL B:
PARCEL B OF LOT MERGER/LOT LINE ADJUSTMENT NO. 2020-529 RECORDED JANUARY 25, 2021 AS
INSTRUMENT NO. 2021-0048173 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
Lots 109 and 110 and a portion of Lot 108 inclusive as shown by Assessors Map No. 46 on file in Book 2
Page 3 of Assessor's Maps, in the Office of the County Recorder of Riverside County, in the City of
Cathedral City, State of California, lying within the Northwest quarter of the Southwest quarter of the
Northwest quarter of Section 16, Township 4 South, Range 5 East, San Bernardino Meridian, more
particularly described as follows:
BEGINNING at the Northeast Corner of Lot C as shown by Tract No. 26424 on file in Book 257 Pages 49
and 50 inclusive records of said County, said point also being the Southeast Corner of Lot 110 as shown
on said Assessor's Map;
THENCE along the North line of said Lot C of said Tract Map and South line of said Lot 110 and
subsequent Lots 109 and 108 of said Assessor's Map, North 89°27'13"West, a distance of 174.56 feet;
THENCE North 00°32'47" East, a distance of 633.52 feet to a point on the Southerly Sideline e of
FrankNega Road (30.00 foot half width Right of Way) as shown on said Assessor's Map and the North
line of said Lot 108 said point being 169.90 feet from the Northeast Corner of said Lot 110;
THENCE along said Southerly Sideline and North line of said Lot 108 and subsequent Lots 109 and 110,
South 89°34'59" East, a distance of 169.90 feet to the said Northeast corner of said Lot 110 said Corner
being on the Westerly line of Palm Springs Highlands Unit No. 3 on file in Book 37 Pages 77 and 78
inclusive records of said County;
THENCE along the East line of said Lot 110 of said Assessor's Map and West line of said Palm Springs
Highlands Map South 00°07'30"West, a distance of 633.92 feet to the TRUE POINT OF BEGINNING.
APN 678-060-51, 53, and a portion of 52.
OAK #4845-2990-1670 v6 29
•
•
a ,
Exhibit B
Number of Units by Unit Size and Targeted Area Median Income (AMI) Levels
Maximum
Household 30% 40% 60% Sub- Mgr Total
Income AMI AMI AMI Total Unit
1-Bedroom
2-Bedroom
Total 20 10 29 59 1 60
OAK #9895-2990-1670 v6 30
i
•
Exhibit C
INSURANCE REQUIREMENTS
Prior to initiating work on the Project and continuing throughout the term of this
Agreement, Owner shall obtain and maintain the following policies of insurance and shall comply
with all provisions set forth in this Exhibit.
(a) Commercial General Liability. A commercial general liability policy with
coverage limits in the amount of the greater of(i)the amounts required by the senior construction
and permanent lenders for the Project, or(ii) One Million Dollars($1,000,000)each occurrence,
Two Million Dollars ($2,000,000) annual aggregate, together with Five Million Dollars
($5,000,000)excess liability coverage, or such other policy limits as Agency may require in its
reasonable discretion, including coverage for bodily injury,property damage,products, completed
operations and contractual liability coverage. Such policy or policies shall be written on an
occurrence basis and shall name the Indemnitees as additional insureds.
(b) Automobile. Comprehensive automobile liability coverage in the amount of Two
Million Dollars ($2,000,000), combined single limit including coverage for owned and non-
owned vehicles. Automobile liability policies shall name the Indemnitees as additional insureds.
(c) Worker's Compensation; Employer's Liability. Owner shall furnish or cause to be
furnished to Agency evidence satisfactory to Agency that Owner and any contractor with whom
Owner has contracted for the performance of work on the Property or otherwise pursuant to this
Agreement carries workers' compensation insurance as required by law and Employer's Liability
insurance in a minimum amount of Two Million Dollars ($2,000,000)per accident.
(d) Builder's Risk. Upon commencement of construction and continuing until
issuance of a Certificate of Completion, Owner and all contractors working on behalf of Owner
shall maintain a policy of builder's all-risk insurance in an amount not less than the full insurable
cost of the Project on a replacement cost basis naming Agency as loss payee as its interests may
appear.
(e) Professional Liability/Errors and Omissions. Professional Liability/Errors and
Omissions insurance as appropriate for design/build operations with limits not less than One
Million Dollars ($1,000,000) each claim. If the professional liability/errors and omissions
insurance is written on a claims made form: (i)the retroactive date must be shown and must be
before the Effective Date, (ii) insurance must be maintained and evidence of insurance must be
provided for at least three (3)years after completion of Project construction, and (iii) if coverage
is cancelled or non-renewed and not replaced with another claims made policy form with a
retroactive date prior to the Effective Date, Owner must purchase extended period coverage for a
minimum of three (3)years after completion of construction.
(f) Property. Upon completion of Project construction, Owner shall maintain property
insurance covering all risks of loss, including earthquake (if required) and flood(if required)for
100%of the replacement value of the Project with deductible, if any, in an amount acceptable to
Agency, naming Agency as loss payee as its interests may appear.
OAK #4845-2990-1670 v6 31
(g) Insurance Providers. Companies writing the insurance required hereunder shall be
licensed to do business in the State of California. Insurance shall be placed with insurers with a
current A.M. Best's rating of no less than A: VII.
(h) Evidence of Insurance, Endorsements, Policies. Prior to the Effective Date of this
Agreement, Owner shall furnish Agency with certificates of insurance in form acceptable to
Agency evidencing the required insurance coverage, duly executed endorsements evidencing the
Indemnitees' status as additional insured, and all other endorsements and coverage required
hereunder. The certificates shall contain a statement of obligation on the part of the carrier to
notify Agency of any material adverse change, cancellation, termination or non-renewal of the
coverage at least thirty(30) days in advance of the effective date of any such material adverse
change, cancellation, termination or non-renewal. All insurance certificates shall contain a
statement of obligation on the part of the carrier to notify Agency of any material adverse change,
cancellation,termination or non-renewal of the coverage at least thirty(30) days in advance of the
effective date of any such material adverse change, cancellation, termination or non-renewal.
Upon Agency's request, Owner shall, within thirty(30) days of the request,provide or arrange for
the insurer to provide to Agency, complete certified copies of all insurance policies required under
this Agreement. Agency's failure to make such request shall not constitute a waiver of the right to
require delivery of the policies in the future.
(i) Additional Insured Endorsements. The additional insured endorsements for the
general liability coverage shall use Insurance Services Office (ISO)Form No. CG 20 09 11 85 or
CG 20 10 11 85, or equivalent, including(if used together) CG 2010 10 01 and CG 2037 10 01;
but shall not use the following forms: CG 20 10 10 93 or 03 94. Coverage shall be at least as
broad as CG 20 10 04 13.
(j) Reinstatement. If any insurance policy or coverage required hereunder is canceled
or reduced, Owner shall, within five (5) days after receipt of notice of such cancellation or
reduction in coverage, but in no event later than the effective date of cancellation or reduction, file
with Agency a certificate showing that the required insurance has been reinstated or provided
through another insurance company or companies. Upon failure to so file such certificate, Agency
may, without further notice and at its option,procure such insurance coverage at Owner's
expense, and Owner shall promptly reimburse Agency for such expense upon receipt of billing
from Agency.
(k) Primary Coverage; Waiver of Subrogation; Annual Aggregate Limits. All
coverage shall be primary insurance and shall not be contributing with any insurance, or self-
insurance maintained by Agency, and the policies shall so provide. Each insurance policy shall
contain a waiver of subrogation for the benefit of the Agency. If any of the required insurance is
provided under a form of coverage that includes an annual aggregate limit or provides that claims
investigation or legal defense costs are included in such annual aggregate limit, such annual
aggregate limit shall be three times the occurrence limits specified above.
(1) Deductibles/Retentions. Any deductibles or self-insured retentions shall be
declared to, and be subject to approval by, City's Risk Manager. At the option of and upon
request by City's Risk Manager if the Risk Manager determines that such deductibles or retentions
OAK #4845-2990-1670 v6 32
•
are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-
insurance retentions as respects the Indemnitees or Owner shall procure a bond guaranteeing
payment of losses and related investigations, claims administration and defense expenses.
(m) Adjustments. The limits of the liability coverage and, if necessary,the terms and
conditions of insurance, shall be reasonably adjusted from time to time (not less than every five
(5)years after the Effective Date nor more than once in every three (3)year period)to address
changes in circumstances, including, but not limited to, changes in inflation and the litigation
climate in California. Within thirty(30)days following Agency's delivery of written notice of
any such adjustments, Owner shall provide Agency with amended or new insurance certificates
and endorsements evidencing compliance with such adjustments.
(n) Additional Insured Coverage: Liability Limits. For all liability insurance required
by this Agreement, Owner(and Owner's contractors, as applicable) shall obtain endorsements that
name the Indemnitees as additional insured in the full amount of all applicable policies,
notwithstanding any lesser minimum limits specified in this Agreement. This Agreement requires
Owner(and Owner's contractors)to obtain and provide for the benefit of the Indemnitees,
additional insured coverage in the same amount of insurance carried by Owner(or Owner's
contractors, as applicable), but), b t in no event less than the minimum amounts specified in this
Agreement. In the event that Owner(or Owner's contractors as applicable)obtains insurance
policies that provide liability coverage in excess of the amounts specified in this Agreement,the
actual limits provided by such policies shall be deemed to be the amounts required under this
Agreement. Without limiting the foregoing,the limits of liability coverage specified in this
Agreement are not intended, nor shall they operate,to limit Agency's ability to recover amounts in
excess of the minimum amounts specified in this Agreement.
OAK #9895-2990-1670 v6 33