HomeMy WebLinkAbout2012/12/11 Item 25 Attachment 2Stradling Yocca Carlson & Rauth Draft dated December 3, 2012 Recording Requested By and When Recorded Mail To: Stradling Yocca Carlson & Rauth 660 Newport Center Drive, Suite 1600 Newport
Beach, California 92660 Attn: Bradley R. Neal, Esq. [Space above for recorder.] This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383.
REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS By and Among HOUSING AUTHORITY OF THE CITY OF CHULA VISTA, U.S. BANK NATIONAL ASSOCIATION, as Trustee And CONGREGATIONAL
TOWER PARTNERS, L.P., a California limited partnership ____________________ Dated as of January 1, 2013 ____________________ Relating to $_____________________ HOUSING AUTHORITY OF THE
CITY OF CHULA VISTA MULTIFAMILY HOUSING REVENUE BONDS (CONGREGATIONAL TOWER) SERIES 2013A 4A6D-D57F-4EFD-B2C3-DCD9779E382E}
Table of Contents Page i Section 1. Definitions and Interpretation ....................................................................................... 2 Section 2. Acquisition, Rehabilitation,
Equipping and Completion of the Project ....................... 6 Section 3. Residential Rental Property ..........................................................................................
7 Section 4. Low and Very Low Income Units................................................................................. 9 Section 5. Tax Status of the Bonds ......................................
....................................................... 12 Section 6. Modification of Special Tax Covenants...................................................................... 13 Section
7. Indemnification ........................................................................................................... 13 Section 8. Consideration ............................................
................................................................. 15 Section 9. Reliance ..............................................................................................................
........ 15 Section 10. Sale or Transfer of the Project; Syndication ............................................................... 15 Section 11. Foreclosure .......................................
.......................................................................... 17 Section 12. Term ........................................................................................................
................... 17 Section 13. Covenants to Run With the Land ................................................................................ 18 Section 14. Burden and Benefit ..................
.................................................................................. 18 Section 15. Uniformity; Common Plan .............................................................................
........... 18 Section 16. Enforcement ................................................................................................................ 18 Section 17. Recording and Filing
................................................................................................... 19 Section 18. Payment of Fees ....................................................................
..................................... 19 Section 19. Governing Law ........................................................................................................... 20 Section
20. Amendments ............................................................................................................... 20 Section 21. Notice ..................................................
....................................................................... 20 Section 22. Severability ...................................................................................................
............. 21 Section 23. Multiple Counterparts ................................................................................................. 21 Section 24. Compliance by Borrower
............................................................................................ 21 Section 25. Obligation of Borrower; Limitations on Recourse to Borrower ...............................
. 21 Section 26. CDLAC Requirements ................................................................................................ 22 Section 27. Damage, Destruction or Condemnation
of the Property ............................................. 22 EXHIBIT A LEGAL DESCRIPTION ..........................................................................................
A-1 EXHIBIT B CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE ......................... B-1 EXHIBIT C INCOME COMPUTATION AND CERTIFICATION ............................................ C-1
EXHIBIT D CDLAC RESOLUTION ........................................................................................... D-1 EXHIBIT E CDLAC COMPLIANCE CERTIFICATE......................................
......................... E-1
1 REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (the “Regulatory Agreement”), dated as of January 1,
2013, by and among the Housing Authority of the City of Chula Vista, a public body corporate and politic is duly organized and existing under the Constitution and the laws of the State
of California (together with any successor to its rights, duties and obligations, the “Issuer”), Congregational Tower Partners, L.P., a California limited partnership (the “Borrower”)
and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, duly authorized to accept and execute trusts
of the type contemplated by the Indenture (as hereinafter defined), with its principal corporate trust office in Los Angeles, California, as Trustee (the “Trustee”). W I T N E S S E
T H WHEREAS, the Legislature of the State of California enacted Chapter 1 of Part 2 of Division 24 of the Health and Safety Code (the “Act”) to authorize housing authorities to issue
bonds to finance the acquisition, rehabilitation, equipping and development of multifamily rental housing for families and individuals of lower income; and WHEREAS, the Issuer is a political
subdivision (within the meaning of that term in the Regulations of the Department of Treasury and the rulings of the Internal Revenue Service prescribed and promulgated pursuant to Section
103 of the Internal Revenue Code of 1986, as amended (the “Code”)); and WHEREAS, on December 11, 2012, the governing board of the Issuer adopted a resolution (the “Resolution”) authorizing
the issuance of revenue bonds in connection with financing the acquisition, rehabilitation and equipping of a 186-unit multifamily rental housing development, known generally as “Congregational
Tower” located at 288 F. Street, in the City of Chula Vista, California, County of San Diego, California (the “Project”); and WHEREAS, in furtherance of the purposes of the Act Act and
the Resolution and as a part of the Issuer’s plan of financing residential rental housing, the Issuer has issued $__________ aggregate principal amount of its “$______________ Housing
Authority of the City of Chula Vista Multifamily Housing Revenue Bonds (Congregational Tower) Series 2013A” (the “Bonds”), the proceeds of which will be loaned to the Borrower which
will use the proceeds of the Bonds to finance the acquisition, rehabilitation and equipping of the Project for the public purpose of providing decent, safe and sanitary housing for families
and individuals of low and very low income; and WHEREAS, the Issuer and the Borrower have entered into a loan agreement dated as of the date hereof (the “Loan Agreement”), providing
the terms and conditions under which the Issuer, will make the Loan to the Borrower to finance the acquisition, rehabilitation and equipping of the Project; and
2 WHEREAS, all things necessary to make the Bonds, when issued as provided in the Trust Indenture between the Issuer and the Trustee, dated as of December 1, 2012 (the “Indenture”),
the valid, binding, and limited obligations of the Issuer according to the import thereof, and to constitute the Indenture a valid assignment of the amounts pledged to the payment of
the principal of, and premium, if any, and interest on the Bonds have been done and performed, and the creation, execution, and delivery of the Indenture and the execution and issuance
of the Bonds, subject to the terms thereof, in all respects have been duly authorized; and WHEREAS, the Issuer has obtained an allocation for the Project of a portion of the State of
California’s private activity bond volume cap, within the meaning of Section 146 of the Code, in accordance with the procedures established by the California Debt Limit Allocation Committee;
and WHEREAS, the Code and the regulations and rulings promulgated with respect thereto and the Act Act prescribe that the use and operation of the Project be restricted in certain respects
and in order to ensure that the Project will be owned and operated in accordance with the Code and the Act, the Issuer, the Trustee and the Borrower have determined to enter into this
Regulatory Agreement in order to set forth certain terms and conditions relating to the acquisition, rehabilitation, equipping and operation of the Project; NOW, THEREFORE, in consideration
of the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Issuer, the Trustee
and the Borrower hereby acknowledge that the above recitals are true and correct and agree as follows: Section 1. Definitions and Interpretation. The following terms shall have the respective
meanings assigned to them in this Section 1 or, if not defined herein, in the Indenture, unless the context in which they are used clearly requires otherwise: “Adjusted Income” – – The
adjusted income of a person who intends to reside in a residential unit (together with the adjusted income of all persons the age of 18 years or older who intend to reside with such
person in one residential unit) as calculated in the manner prescribed in Regulation Section 1.103-8. “Affiliated Party” – (1) a Person whose relationship with the Borrower would result
in a disallowance of losses under Section 267 or 707(b) of the Code, (2) a Person who together with the Borrower are members of the same controlled group of corporations (as defined
in Section 1563(a) of the Code, except that “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein), (3) a partnership and each of its partners
(and their spouses and minor children) whose relationship with the Borrower would result in a disallowance of losses under Section 267 or 707(b) of the Code or (4) an S Corporation and
each of its shareholders (and their spouses and minor children) whose relationship with the Borrower would result in a disallowance of losses under Section 267 or 707(b) of the Code.
“Area” – The San Diego County, California, Primary Statistical Area. “Bonds” – The $______________ Housing Authority of the City of Chula Vista Multifamily Housing Revenue Bonds (Congregational
Tower) Series 2013A.
3 “Borrower’s Tax Certificate” – The certificate of the Borrower, dated as of the Closing Date, with respect to certain Project Costs delivered to the Issuer by the Borrower. “CDLAC”
– The California Debt Limit Allocation Committee. “CDLAC Resolution” – Resolution No. 12-109 adopted by CDLAC on November 14, 2012, as amended. “Certificate of Continuing Program Compliance”
– The certificate with respect to the Project to be filed by the Borrower with the Issuer, which shall be substantially in the form attached hereto as Exhibit B. “Closing Date” – January
__, 2012. “Costs of Issuance” – All costs incurred in connection with the issuance of the Bonds, generally those treated as Costs of Issuance under present Treasury Department regulations
and rulings, and including all costs incurred in connection with the authorization, sale and issuance of the Bonds and the transactions contemplated herein, including, but not limited
to (1) counsel fees (including bond counsel, purchaser’s counsel, Issuer’s counsel, Trustee’s counsel, Borrower’s counsel, as well as any other specialized counsel fees and expenses
incurred in connection with the borrowing); (2) financial advisor fees and expenses incurred in connection with the borrowing; (3) rating agency fees, if any; (4) initial and prepaid
Trustee’s fees incurred in connection with the borrowing; (5) paying agent and certifying and authenticating agent fees related to issuance of the Bonds; (6) accountant fees related
to issuance of the Bonds; (7) costs incurred in connection with the required public approval process (e.g., publication costs for public notices generally and costs of the public hearing
or voter referendum); (8) costs of engineering and feasibility studies necessary to the issuance of the Bonds (as opposed to such studies related to acquisition or rehabilitation of
the Project, but not to the borrowing); and (9) the Issuer fees. “Income Certification” – The Income Computation and Certification Form in substantially the form attached hereto as Exhibit
C. “Indenture” – The Trust Indenture between the Issuer and the Trustee, dated as of December 1, 2012, as it may be amended from time to time. “Issuer Fee” – The administrative fee of
the Issuer payable on the Closing Date in the amount of one-eighth of one percent (1/8%) of the aggregate original face principal amount of the Bonds and (i) the ongoing administrative
fee payable in advance every six (6) months commencing on the Closing Date in the amount of one-half (1/2) of one-eighth of one percent (1/8%) of the aggregate original face principal
amount of the Bonds until the Conversion Date, and (ii) on the first January 1 or June 1 following the Conversion Date and thereafter, the ongoing administrative fee payable every six
(6) months shall equal one-half (1/2) of one-eighth of one percent (1/8%) of the aggregate principal amount of the Bonds outstanding immediately after the Conversion Date. “Loan” – The
Loan made by the Issuer to the Borrower pursuant to the Loan Agreement for the purpose of providing funds to to the Borrower to finance the acquisition, rehabilitation and equipping
of the Project.
4 “Low Income Tenants” – Individuals or families with Adjusted Income which does not exceed 60 percent of the Median Income for the Area as adjusted in a manner consistent with the determination
of lower income families under Section 8 of the United States Housing Act of 1937 and as adjusted for household size as set forth below. In no event, however, will the occupants of a
residential unit be considered to be Low Income Tenants if all the occupants are students, as defined in Section 151(c)(4) of the Code, as such may be amended, no one of which is entitled
to file a joint federal income tax return. Currently, Section 151(c)(4) defines a student as an individual enrolled as a full-time student during each of 5 calendar months during the
calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body
of students in attendance or is an individual pursuing a full-time course of institutional on-farm training under the supervision of an accredited agent of such an educational organization
or of a state or political subdivision thereof. Household Size Adjustment 1 70% 2 80% 3 90% 4 100% 5 108% 6 116% 7 124% 8 132% “Low Income Units” – The dwelling units in the Project
designated for occupancy by Low Income Tenants pursuant to Section 4(a)(ii) of this Regulatory Agreement. “Median Income for the Area” – The median gross income for the Area as most
recently determined by the Secretary of Treasury pursuant to Section 142(d)(2)(B) of the Code. “Project” – The Project Facilities and the Project Site. “Project Costs” – To the extent
authorized by the Code, the Regulations and the Act, any and all costs incurred by the Borrower with respect to the acquisition, rehabilitation and equipping of the Project, whether
paid or incurred prior to or after the sixtieth day preceding August 14, 2012, including, without limitation, costs for site preparation, the planning of housing and related facilities
and improvements, the acquisition of property, the removal or demolition of existing structures, the rehabilitation and equipping of housing and related facilities and improvements,
and all other work in connection therewith, and all costs of financing, including, without limitation, the costs of consultant, accounting and legal services, other expenses necessary
or incident to determining the feasibility of the Project, administrative and other expenses necessary or incident to the Project and the financing thereof (including reimbursement to
any municipality, county or entity for expenditures made for the Project) and all other costs approved by Bond Counsel. “Project Facilities” – The buildings, structures and other improvements
to be rehabilitated on the Project Site that are being financed with proceeds of the Bonds, and all fixtures and other property owned by the Borrower and located on, or used in connection
with, such buildings, structures and other improvements.
5 “Project Site” or “Property” – The parcel or parcels of real property described in Exhibit ”A”, which is attached hereto and by this reference incorporated herein, and all rights and
appurtenances thereunto appertaining. “Qualified Project Costs” – The Project Costs (excluding Costs of Issuance) incurred after the sixtieth day preceding August 14, 2012, which either
constitute land or property of a character subject to the allowance for depreciation under Section 167 of the Code or are chargeable to a capital account with respect to the Project
for federal income tax and financial accounting purposes, or would be so chargeable either with a proper election by the Borrower or but for the proper election by the Borrower to deduct
those amounts within the meaning of Regulation Section 1.103-8(a)(1)(i); provided, however, that only such portion of interest accrued during rehabilitation of the Project shall constitute
a Qualified Project Cost as bears the same ratio to all such interest as the Qualified Project Costs bear to all Project Costs paid from Bond proceeds and interest earnings thereon;
and provided further that interest accruing after the completion date shall not constitute a Qualified Project Cost; and provided still further that if any portion of the Project is
being rehabilitated by an Affiliated Party (whether as a general contractor or a subcontractor), “Qualified Project Costs” shall include only the actual out-of-pocket costs incurred
by such Affiliated Party in rehabilitating the Project (or any portion thereof) within the meaning of Section 147(d)(2) of the Code, as provided in the Tax Certificate. “Qualified Project
Period” – The period beginning on the later of (i) the first day on which at least ten percent (10%) of the dwelling units in the Project are first occupied, and (ii) the Closing Date
and ending on the later of (a) the date which is 55 years after the date on which fifty percent (50%) of the dwelling units are occupied, (b) the first day on which no tax exempt bonds
with respect to the Project are Outstanding, or (c) the date on which any assistance provided with respect to the Project under Section 8 of the United States Housing Act of 1937 terminates;
provided that the Qualified Project Period may be shortened with the written consent of the Issuer and CDLAC in their sole discretion, and upon receipt by the Issuer of an opinion of
Bond Counsel that such action, in and of itself, will not cause interest on the Bonds to be includable in gross income for federal tax purposes. “Servicer” – Citibank, N.A., or an successor
thereto appointed as loan servicer under the Indenture. “Very Low Income Tenants” – Individuals or families with Adjusted Income which does not exceed 50 percent of the Median Income
for the Area as adjusted in a manner consistent with determination of lower income families under Section 8 of the United States Housing Act of 1937 and as adjusted for household size
as set forth below. In no event, however, will the occupants of a residential unit be considered to be Very Low Income Tenants if all the occupants are students, as defined in Section
151(c)(4) of the Code, as such, may be amended, no one of which is entitled to file a joint federal income tax return. Currently, Section 151(c)(4) defines a student as an individual
enrolled as a full-time student during each of 5 calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains
a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance or is an individual pursuing a full-time course of institutional on-farm training
under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof.
6 Household Size Adjustment 1 70% 2 80% 3 90% 4 100% 5 108% 6 116% 7 124% 8 132% “Very Low Income Units” – The dwelling units in the Project designated for occupancy by Very Low Income
Tenants pursuant to Section 4(a)(i) of this Regulatory Agreement. Capitalized terms which are not defined herein shall have the meanings assigned to them in the Indenture. Unless the
context clearly requires otherwise, as used in this Regulatory Agreement, words of the masculine, feminine or neuter gender shall be construed to include each other gender when appropriate
and words of the singular number shall be construed to include the plural number, and vice versa, when appropriate. This Regulatory Agreement and all the terms and provisions hereof
shall be construed to effectuate the purposes set forth herein and to sustain the validity hereof. The defined terms used in the preamble and recitals of this Regulatory Agreement have
been included for convenience of reference only, and the meaning, construction and interpretation of all defined terms shall be determined by reference to this Section 1 notwithstanding
any contrary definition in the preamble or recitals hereof. The titles and headings of the sections of this Regulatory Agreement have been inserted for convenience of reference only,
and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof or be considered or given any effect in construing this Regulatory
Agreement or any provisions hereof or in ascertaining intent, if any question of intent shall arise. Section 2. Acquisition, Rehabilitation, Equipping and Completion of the Project.
The Borrower hereby represents, as of the date hereof, and covenants, warrants and agrees as follows: (a) The Borrower has incurred a substantial binding obligation to acquire, rehabilitate
and equip the Project, pursuant to which the Borrower is obligated to expend at least ninety five percent of the net sale proceeds of the Bonds. (b) The Borrower’s reasonable expectations
respecting the total cost of the acquisition, rehabilitation and equipping of the Project and the disbursement of Bond proceeds are accurately set forth in the Borrower’s Tax Certificate
attached to the Tax Certificate which has been delivered to the Issuer. (c) The Borrower will proceed with due diligence to complete the acquisition, rehabilitation and equipping of
the Project and expects to expend the full amount of the proceeds of the Loan for Project Costs prior to three years from the Closing Date. (d) The statements made in the various certificates
delivered by the Borrower to the Issuer or the Trustee are true and correct.
7 (e) Money on deposit in any fund or account in connection with the Bonds, whether or not such money was derived from other sources, shall not be used by or under the direction of the
Borrower, in a manner which would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code, and the Borrower specifically agrees that the investment of money
in any such fund shall be restricted as may be necessary to prevent the Bonds from being “arbitrage bonds” under the Code. (f) The Borrower (and any person related to it within the meaning
of Section 147(a)(2) of the Code) will not take or omit to take, as is applicable, any action if such action or omission would in any way cause the proceeds from the sale of the Bonds
to be applied in a manner contrary to the requirements of the Indenture, the Loan Agreement or this Regulatory Agreement. (g) The Borrower shall comply with all applicable requirements
of Section 65863.10 of the California Government Code, including the requirements for providing notices in Sections (b), (c), (d) and (e) thereof. Section 3. Residential Rental Property.
The Borrower hereby acknowledges and agrees that the Project will be owned, managed and operated as a “qualified residential rental project” (within the meaning of Section 142(d) of
the Code) until the expiration of the Qualified Project Period. To that end, and for the term of this Regulatory Agreement, the Borrower hereby represents, as of the date hereof, and
covenants, warrants and agrees as follows: (a) The Project is being acquired, rehabilitated and equipped for the purpose of providing multifamily residential rental property, and the
Borrower shall own, manage and operate the Project as a project to provide multifamily residential rental property comprised of a building or structure or several interrelated buildings
or structures, together with any functionally related and subordinate facilities, and no other facilities, in accordance with applicable provisions of Section 142(d) of the Code and
Section 1.103-8(b) of the Regulations, and the Act, and in accordance with such requirements as may be imposed thereby on the Project from time to time. (b) All of the dwelling units
in the Project will be similarly rehabilitated units, and, to the extent required by the Code and the Regulations, each dwelling unit in the Project will contain complete separate and
distinct facilities for living, sleeping, eating, cooking and sanitation for a single person or a family, including a sleeping area, bathing and sanitation facilities and cooking facilities
equipped with a cooking range, refrigerator and sink; provided that any tenant may, but shall not be obligated to, provide a refrigerator for the unit to be occupied. (c) None of the
dwelling units in the Project will at any time be utilized on a transient basis, or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing
home, hospital, sanitarium, rest home, retirement house or trailer court or park. (d) No part of the Project will at any time be owned or used as a condominium or by a cooperative housing
corporation, nor shall the Borrower take any steps in connection with a conversion to such ownership or uses. The Borrower shall not take any steps in connection with a conversion of
the Project to a condominium or cooperative ownership except with the prior written approving opinion of Bond Counsel that by reason of any such action the interest on the Bonds will
not become includable in gross income for federal income tax purposes.
8 (e) All of the dwelling units (except for [one] manager’s unit described in (g) below) will be available for rental on a continuous basis to members of the general public and the Borrower
will not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that dwelling units are required by this Regulatory Agreement
or any other restriction to be imposed on the Project to be leased or rented to Low Income Tenants, Very Low Income Tenants and to holders of Section 8 certificates or vouchers or, in
the case of any other restrictions imposed on the Project, to tenants meeting the income and affordability restrictions required thereby. (f) The Project Site consists of a parcel or
parcels that are contiguous except for the interposition of a road, street or stream, and all of the Project Facilities will comprise a single geographically and functionally integrated
project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (g) No dwelling unit in any building in the Project shall
be occupied
by the Borrower unless the building contains five or more dwelling units, in which case [one] unit may be occupied by the Borrower or by persons related to or affiliated with the Borrower
such as a resident manager or maintenance personnel. Subject to the foregoing limitation, one unit in the Project may be occupied by resident managers or maintenance personnel. (h) Should
involuntary noncompliance with the provisions of Section 1.103-8(b) of the Regulations be caused by fire, seizure, requisition, foreclosure, transfer of title by deed in lieu of foreclosure,
change in a federal law or an action of a federal agency after the Closing Date which prevents the Issuer from enforcing the requirements of the Regulations, or condemnation or similar
event, the Borrower covenants that, within a “reasonable period” determined in accordance with the Regulations, it will either prepay the Loan and thereby cause the Bonds to be redeemed
or apply any proceeds received as a result of any of the preceding events to reconstruct the Project to meet the requirements of Section 142(d) of the Code and the Regulations. (i) The
Borrower shall not discriminate on the basis of race, religion, creed, color, ethnic group identification, sex, sexual preference, age, source of income (e.g. AFDC, SSI), mental or physical
disability, national origin or marital status in the rental, lease, use or occupancy of the Project or in connection with the employment or application for employment of persons for
the operation and management of the Project. (j) Following the expiration or termination of the Qualified Project Period, Low Income Units and Very Low Income Units shall remain available
to the Low Income Tenants and Very Low Income Tenants then occupying such units at the date of expiration or termination of the Qualified Project Period at a rent not greater than the
rent determined pursuant to Section 4(a)(i) and (ii) below until the earliest of any of the following occurs: (i) The household’s income exceeds 140 percent of the income at which such
household would qualify as a Low Income Tenant or Very Low Income Tenant, applicable. (ii) The household voluntarily moves or is evicted for “good cause.” For these purposes, “good cause”
means the nonpayment of rent or allegation of facts necessary to prove major, or repeated minor, violations of material provisions of the lease agreement which detrimentally affect the
health and safety of other persons or the structure, the fiscal integrity of the Project, or the purposes or special programs of the Project.
9 (iii) Sixty (60) years after the commencement of the Qualified Project Period. (iv) The Borrower pays the relocation assistance and benefits to such Low Income Tenants or Very Low
Income Tenants, as applicable, as provided in Section 7264(b) of the Government Code of the State of California. (k) The Issuer may but shall not be required to monitor the Borrower’s
compliance with the provisions of subparagraph (j) above. Section 4. Low Income and Very Low Income Units. (a) Pursuant to the requirements of Section 142(d) of the Code and applicable
provisions of the Act, the Borrower hereby represents, as of the date hereof, and warrants, covenants and agrees as follows: (i) During the Qualified Project Period, not less than ten
percent (10%) of the units in the Project shall be designated as Very Low Income Units and shall be continuously occupied by or held available for occupancy by Very Low Income Tenants
at monthly rents paid by tenants which do not exceed one-twelfth of the amount obtained by multiplying 30% times 50% of the Median Income for the Area, as adjusted for household size
utilizing the percentages set forth above under the definition of Very Low Income Tenant less a reasonable deduction for utilities paid by the tenant as determined by the Issuer and
assuming (solely for purposes of the above-described limit on the amount of monthly rent, and not for purposes of determining whether individuals or families are Very Low Income Tenants
for purposes of Section 142(d) of the Code), the following unit sizes and household sizes: Unit Size Household Size One Bedroom Two Persons Two Bedrooms Three Persons Three Bedrooms
Four and a Half Persons Such Very Low Income Units shall be of comparable quality and offer a range of sizes and number of bedrooms comparable to those units which are available to other
tenants and shall be distributed throughout the Project. A unit occupied by a Very Low Income Tenant who at the commencement of the occupancy is a Very Low Income Tenant shall be treated
as occupied by a Very Low Income Tenant until a recertification of such tenant’s income in accordance with Section 4(c)(i) below demonstrates that such tenant no longer qualifies as
a Very Low Income Tenant and thereafter such unit shall be treated as any residential unit of comparable or smaller size in the Project occupied by a new resident other than a Very Low
Income Tenant. Moreover, a unit previously occupied by a Very Low Income Tenant and then vacated shall be considered occupied by a Very Low Income Tenant until reoccupied, other than
for a temporary period, at which time the character of the unit shall be redetermined. In no event shall such temporary period exceed thirty-one (31) days. (ii) In addition to the Very
Low Income Units set aside under paragraph (i) above, during the Qualified Project Period not less than another thirty percent (30%) of the units in the Project shall be designated as
Low Income Units and shall be continuously occupied by or held available for occupancy by Low Income Tenants at monthly rents which do not exceed one-twelfth of the amount obtained by
multiplying 30% times 60% of the Median Income for the Area, as adjusted for household size utilizing the percentages set forth above under the definition of Low
10 Income Tenant less a reasonable deduction for utilities paid by the tenant as determined by the Issuer and assuming (solely for purposes of the above-described limit on the amount
of monthly rent, and not for purposes of determining whether individuals or families are Low Income Tenants for purposes of Section 142(d) of the Code), the following unit sizes and
household sizes: Unit Size Household Size One Bedrooms Two Persons Two Bedrooms Three Persons Three Bedrooms Four and a Half Persons Such Low Income Units shall be of comparable quality
and offer a range of sizes and number of bedrooms comparable to those units which are available to other tenants and shall be distributed throughout the Project. A unit occupied by a
Low Income Tenant who at the commencement of the occupancy is a Low Income Tenant shall be treated as occupied by a Low Income Tenant until a recertification of such tenant’s income
in accordance with Section 4(c)(ii) below demonstrates that such tenant no longer qualifies as a Low Income Tenant and thereafter such unit shall be treated as any residential unit of
comparable or smaller size in the Project occupied by a new resident other than a Low Income Tenant. Moreover, a unit previously occupied by a Low Income Tenant and then vacated shall
be considered occupied by a Low Income Tenant until reoccupied, other than for a temporary period, at which time the character of the unit shall be redetermined. In no event shall such
temporary period exceed thirty-one (31) days. (b) Immediately prior to a Very Low Income Tenant’s occupancy of a Very Low Income Unit and a Low Income Tenant’s occupancy of a Low Income
Unit, the Borrower will obtain and maintain on file an Income Certification from each Very Low Income Tenant occupying a Very Low Income Unit and each Low Income Tenant occupying a Low
Income Unit, dated immediately prior to the initial occupancy of such Very Low Income Tenant or Low Income Tenant, as applicable, in the Project. In addition, the Borrower will provide
such further information as may be required in the future by the State of California, the Issuer, the Act, Section 142(d) of the Code and the Regulations, as the same may be amended
from time to time, or in such other form and manner as may be required by applicable rules, rulings, policies, procedures or other official statements now or hereafter promulgated, proposed
or made by the Department of the Treasury or the Internal Revenue Service with respect to obligations issued under Section 142(d) of the Code. The Borrower shall verify that the income
provided by an applicant is accurate by taking one or more of the following steps as a part of the verification process: (1) obtain a federal income tax return for the most recent tax
year, (2) obtain a written verification of income and employment from the applicant’s current employer, (3) 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 satisfactory to the Issuer or (4) such other information as may be reasonably requested by the Issuer. Copies of the
most recent Income Certifications for Low Income Tenants and Very Low Income Tenants shall be attached to the quarterly report to be filed with the Issuer as required in (d) below. (c)
(i) Immediately prior to the first anniversary date of the occupancy of a Very Low Income Unit by one or more Very Low Income Tenants, and on each anniversary date thereafter, the Borrower
shall recertify the income of the occupants of each Very Low Income Unit
11 by obtaining a completed Income Certification based upon the current income of each occupant of the unit. In the event the recertification demonstrates that such household’s income
exceeds 140% of the income at which such household would qualify as Very Low Income Tenants, such household will no longer qualify as Very Low Income Tenants, and to the extent necessary
to comply with the requirements of Section 4(a)(i) above, the Borrower will rent the next available unit of comparable or smaller size to one or more Very Low Income Tenants. No tenants
shall be denied continued occupancy in the Project because, after occupancy, their income increases to make them no longer qualify as Very Low Income Tenants. (ii) Immediately prior
to the first anniversary date of the occupancy of a Low Income Unit by one or more Low Income Tenants, and on each anniversary date thereafter, the Borrower shall recertify the income
of the occupants of each Low Income Unit by obtaining a completed Income Certification based upon the current income of each occupant of the unit. In the event the recertification demonstrates
that such household’s income exceeds 140% of the income at which such household would qualify as Low Income Tenants, such household will no longer qualify as Low Income Tenants and to
the extent necessary to comply with the requirements of Section 4(a)(ii) above, the Borrower will rent the next available unit of comparable size to one or more Low Income Tenants. (d)
Upon commencement of the Qualified Project Period, and within ten days of the last day of each quarter thereafter during the term of this Regulatory Agreement, the Borrower shall advise
the Issuer of the status of the occupancy of the Project by delivering to the Issuer a Certificate of Continuing Program Compliance. (e) The Borrower shall maintain complete and accurate
records pertaining to the Low Income Units and Very Low Income Units, and shall permit any duly authorized representative of the Issuer, the Agent, the Department of the Treasury or
the Internal Revenue Service to inspect the books and records of the Borrower pertaining to the Project, including those records pertaining to the occupancy of the Low Income Units and
Very Low Income Units. (f) The Borrower shall submit to the Secretary of the Treasury annually on the anniversary date of the start of the Qualified Project Period, or such other date
as is required by the Secretary, a certification that the Project continues to meet the requirements of Section 142(d) of the Code, and shall provide a copy of such certification to
the Issuer. (g) The Borrower shall 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 program under Section 8 of the United States Housing Act of 1937, or its successor. The Borrower shall not apply selection criteria to Section 8 certificate
or voucher holders that are more burdensome than criteria applied to all other prospective tenants. The Borrower shall not collect any additional fees or payments from a Low Income Tenant
or a Very Low Income Tenant except security deposits or other deposits required of all tenants. The Borrower shall not collect security deposits or other deposits from Section 8 certificate
or voucher holders in excess of those allowed under the Section 8 Program. The Borrower shall not discriminate against applicants for Low Income Units or Very Low Income Units on the
basis of source of income (i.e., AFDC or SSI), and the Borrower shall consider a prospective tenant’s previous rent history of at least one year as evidence of the ability to pay the
applicable rent (ability to pay shall be demonstrated if an applicant can show that the same percentage or more of the applicant’s income has been paid for rent in the past as will be
required to be paid to rent the Very Low Income Unit to be occupied).
12 (h) Each lease pertaining to a Low Income Unit or Very Low Income Unit shall contain a provision to the effect that the Borrower has relied on the Income Certification and supporting
information supplied by the applicant in determining qualification for occupancy of the Low Income Unit or Very Low Income Unit, as applicable, and that any material misstatement in
such certification (whether or not intentional) will be cause for immediate termination of such lease. Each lease will also contain a provision that failure to cooperate with the annual
recertification process reasonably instituted by the Borrower pursuant to Section 4(c) above may, at the option of the Borrower, disqualify the unit as a Low Income Unit or Very Low
Income Unit, as applicable, or provide grounds for termination of the lease. (i) Prior to the Closing Date, the Borrower agrees to provide to the Issuer a copy of the form of application
and lease to be provided to prospective Low Income Tenants and Very Low Income Tenants. The term of of the lease shall be not less than thirty (30) days. (j) To the extent required by
law, notwithstanding the termination of the Qualified Project Period, the rent of “in-place” Low Income Tenants and Very Low Income Tenants at the conclusion of the Qualified Project
Period will continue to be governed by the applicable affordability restrictions in this Section 4, so long as those tenants continue to live in the Project. The foregoing shall not
prevent the Borrower from terminating a tenant’s occupancy in accordance with the terms of such tenant’s lease or from declining to extend such tenant’s lease. Section 5. Tax Status
of the Bonds. The Borrower and the Issuer each hereby represents, as of the date hereof, and warrants, covenants and agrees that: (a) It will not knowingly take or permit, or omit to
take or cause to be taken, as is appropriate, any action that would adversely affect the exclusion from gross income for federal income tax purposes or the exemption from California
personal income taxation of the interest on the Bonds and, if it should take or permit, or omit to take or cause to be taken, any such action, it will take all lawful actions necessary
to rescind or correct such actions or omissions promptly upon obtaining knowledge thereof; (b) It will take such action or actions as may be necessary, in the written opinion of Bond
Counsel filed with the Issuer and the Trustee, to comply fully with the Act and all applicable rules, rulings, policies, procedures, Regulations or other official statements promulgated,
proposed or made by the Department of the Treasury or the Internal Revenue Service pertaining to obligations issued under Section 142(d) of the Code to the extent necessary to maintain
the exclusion from gross income for federal income tax purposes of interest on the Bonds; and (c) The Borrower, at the Borrower’s expense, will file of record such documents and take
such other steps as are necessary, in the written opinion of Bond Counsel filed with the Issuer and the Trustee, in order to insure that the requirements and restrictions of this Regulatory
Agreement will be binding upon all owners of the Project, including, but not limited to, the execution and recordation of this Regulatory Agreement in the real property records of the
County of San Diego. The Borrower hereby covenants to notify any subsequent owner of the Project of the requirements and restrictions contained in this Regulatory Agreement in any documents
transferring any interest in the Project to another person to the end that such transferee has notice of such restrictions, and to obtain the agreement from any transferee to abide by
all requirements and restrictions of this Regulatory Agreement; provided that the covenants contained in this paragraph
13 shall not apply to the Holder should the Holder become the owner of the Project by foreclosure, deed in lieu of foreclosure or comparable conversion of the Loan Documents. Section
6. Modification of Special Tax Covenants. The Borrower, the Trustee and the Issuer hereby agree as follows: (a) To the extent any amendments to the Act, the Regulations or the Code shall,
in the written opinion of Bond Counsel filed with the Issuer and the Trustee, impose requirements upon the ownership or operation of the Project more restrictive than those imposed by
this Regulatory Agreement which must be complied with in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds, this Regulatory Agreement
shall be deemed to be automatically amended to impose such additional or more restrictive requirements following delivery of written notice thereof to Borrower. (b) To the extent any
amendments to the Act, the Regulations or the Code shall, in the written opinion of Bond Counsel filed with the Issuer and the Trustee, impose requirements upon the ownership or operation
of the Project less restrictive than imposed by this Regulatory Agreement, this Regulatory Agreement may be amended to conform in whole or in part to such changed requirements should
the Issuer, in its sole discretion, determine that such requirements should be made applicable to the Project. (c) The Borrower, the Issuer and, if applicable, the Trustee shall execute,
deliver and, if applicable, file of record any and all documents and instruments, necessary to effectuate the intent of this Section 6, and each of the Borrower and the Issuer hereby
appoints the Trustee as its true and lawful attorney-in-fact to execute, deliver and, if applicable, file of record on behalf of the Borrower or the Issuer, as is applicable, any such
document or instrument (in such form as may be approved in writing by Bond Counsel) if either the Borrower or the Issuer defaults in the performance of its obligations under this subsection
(c); provided, however, that the Trustee shall take no action under this subsection (c) without first notifying the Borrower or the Issuer, or both of them, as is applicable, unless
directed in writing by the Issuer or the Borrower and without first providing the Borrower or the Issuer, or both, as is applicable, an opportunity to comply with the requirements of
this Section 6. Section 7. Indemnification. The Borrower hereby releases the Issuer, the Trustee, their officers and employees from, and covenants and agrees to indemnify, hold harmless
and defend the Issuer, the Trustee, their officers, members, directors, officials, agents and employees and each of them (collectively the “Indemnified Parties,” and, individually an
“Indemnified Party”) from and against, any and all claims, losses, costs, damages, demands, expenses, taxes, suits, judgments, actions and liabilities of whatever nature, joint or several
(including, without limitation, costs of investigation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement, and amounts paid to discharge judgments),
made directly or indirectly (a) by or on behalf of any person arising from any cause whatsoever in connection with transactions contemplated hereby or otherwise in connection with the
Project, the Bonds, or the execution or amendment of any document relating thereto; (b) arising from any cause whatsoever in connection with the approval of financing for the Project,
the making of the Loan or otherwise; (c) arising from any act or omission of the Borrower or any of its agents, servants, employees or licensees, in connection with the Loan or the Project;
(d) arising in connection with the issuance and sale, resale or reissuance of any Bonds or any certifications or representations made by any person (other than the Issuer or the party
seeking indemnification in connection therewith) or the carrying out by the Borrower of any of the transactions contemplated by the Bonds, the Indenture, the Loan Agreement or this Regulatory
14 Agreement; (e) arising in connection with the operation of the Project, or the conditions, environmental or otherwise, occupancy, use, possession, conduct or management of work done
in or about, or from the planning, design, acquisition, installation or rehabilitation of, the Project or any part thereof; and (f) arising out of or in connection with the Trustee’s
acceptance and administration of the trusts created by the Indenture and the exercise of its powers or duties thereunder or under the Loan Agreement, this Regulatory Agreement or any
other agreements in connection therewith to which it is a party. This indemnification shall extend to and include, without limitation, all reasonable costs, counsel fees, expenses and
liabilities incurred in connection with any such claim, or proceeding brought with respect to such claim, except (i) in the case of the foregoing indemnification of the Trustee or any
of its Indemnified Parties, to the extent such damages are caused by the gross negligence or willful misconduct of such Person and (ii) in the case of the foregoing indemnification of
the Issuer or any of its Indemnified Parties to the extent such damages are caused by the willful misconduct of such Person. In the event that any action or proceeding is brought against
any Indemnified Party with respect to which indemnity may be sought hereunder, the Borrower, upon written notice from the Indemnified Party, shall assume the investigation and defense
thereof, including the employment of counsel selected by the Indemnified Party and approved by the Borrower (which approval shall not be unreasonably withheld); and the Borrower shall
assume the payment of all reasonable fees and expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Issuer shall
have the right to review and approve or disapprove any such compromise or settlement. The Borrower specifically acknowledges and agrees that it has an immediate and independent obligation
to defend each Indemnified Party from any claim which actually or potentially falls within this Section 7 even if such claim is or may be groundless, fraudulent or false, which obligation
arises at the time such claim is tendered to the Borrower by any Indemnified Party and continues at all times thereafter. Each Indemnified Party shall have the right to employ separate
counsel in any such action or proceeding and participate in the investigation and defense thereof, and the Borrower shall pay the reasonable fees and expenses of such separate counsel;
provided, however, that unless such separate counsel is employed with the approval of the Borrower, which approval shall not be unreasonably withheld, the Borrower shall not be required
to pay the fees and expenses of such separate counsel unless the Indemnified Party reasonably determines that a conflict exists between the interests of the Borrower and such Indemnified
Party, in which case the Borrower shall pay the reasonable fees and expenses of such separate counsel. The Borrower also shall pay and discharge and shall indemnify and hold harmless
the Issuer and the Trustee from (i) any lien or charge upon payments by the Borrower to the Issuer and the Trustee hereunder arising out of Borrower’s actions or inactions and (ii) any
taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges in respect of any portion of the Project. If any such claim is
asserted, or any such lien or charge upon payments, or any such taxes, assessments, impositions or other charges, are sought to be imposed, the Trustee shall give prompt notice to the
Borrower, and the Borrower shall have the sole right and duty to assume, and will assume, the defense thereof, with full power to litigate, compromise or settle the same in its sole
discretion. Notwithstanding any transfer of the Project to another owner in accordance with the provisions of Section 10 of this Regulatory Agreement, the Borrower shall remain obligated
to indemnify the Indemnified Parties pursuant to this Section 7, unless at the time of transfer the Issuer
15 has consented to indemnification under this Section 7 from such subsequent owner. If the Issuer has consented to any transfer of the Project in accordance with the provisions of Section
10 of this Regulatory Agreement, the Borrower shall not be obligated to indemnify the Indemnified Parties pursuant to this Section 7 for actions or inactions of the transferee arising
after such transfer, but shall remain obligated to provide indemnity for claims related to actions or inactions occurring prior to such transfer. In addition to the foregoing, the Borrower
will pay upon demand all of the fees and expenses paid or incurred by the Agent or the Issuer in enforcing the provisions hereof, unless such enforcement is related to an event occurring
after a transfer that the Issuer has consented to in accordance with the provisions of Section 10 of this Regulatory Agreement. The provisions of this Section 7 shall survive the term
of the Bonds and this Regulatory Agreement. The obligations of the Borrower under this Section are independent of any other contractual obligation of the Borrower to provide indemnity
to the Indemnified Parties, and the obligation of the Borrower to provide indemnity hereunder shall not be interpreted, construed or limited in light of any other separate indemnification
obligation of the Borrower. The Indemnified Parties shall be entitled simultaneously to seek indemnity under this Section and any other provision under which they are entitled to indemnity.
Section 8. Consideration. The Issuer has issued the Bonds to make the Loan to finance the Project, all for the purpose, among others, of inducing the Borrower to acquire, rehabilitate,
equip and operate the Project. In consideration of the issuance of the Bonds by the Issuer, the Borrower has entered into this Regulatory Agreement and has agreed to restrict the uses
to which the Project can be put on the terms and conditions set forth herein. Section 9. Reliance. The Issuer and the Borrower hereby recognize and agree that the representations, warranties,
covenants and agreements set forth herein may be relied upon by all persons interested in the legality and validity of the Bonds, and in the exclusion from gross income for federal income
tax purposes of interest on the Bonds and the exemption from California personal income taxes of the interest on the Bonds. In performing their duties and obligations hereunder, the
Issuer and the Trustee may rely upon statements and certificates of the Borrower, the Low Income Tenants, the Very Low Income Tenants, and upon audits of the books and records of the
Borrower pertaining to the Project. In addition, the Issuer and the Trustee may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered by the Issuer or the Trustee under this Regulatory Agreement in good faith and in conformity with such opinion, but only to the extent Issuer
first obtains a letter from such counsel allowing Borrower to rely on such opinion (it further being understood that the Borrower shall bear all costs related to such opinion and letter);
provided, however, if there are conflicting opinions among the counsel selected by such
parties, the opinion of Bond Counsel shall govern the interpretation and enforcement of this Regulatory Agreement. In determining whether any default or lack of compliance by the Borrower
exists under this Regulatory Agreement, the Trustee shall not be required to conduct any investigation into or review of the operations or records of the Borrower and may rely solely
on any notice or certificate delivered to the Trustee by the Borrower or the Issuer with respect to the occurrence or absence of a default. Section 10. Sale or Transfer of the Project;
Syndication. The Borrower intends to hold the Project for its own account, has no current plans to sell, transfer or otherwise dispose of the Project, and hereby covenants and agrees
not to sell, transfer or otherwise dispose of the Project, or
16 any portion thereof (other than for individual tenant use as contemplated hereunder), without obtaining the prior written consent of the Issuer (except as provided in the second to
last paragraph of this Section 10) and upon receipt by the Issuer (except as provided in the second to last paragraph of this Section 10) of (i) such certifications as deemed necessary
by the Issuer to establish that the Borrower shall not be in default under this Regulatory Agreement or under the Loan Agreement or, if any such defaults exist, the purchaser or assignee
undertakes to cure such defaults to the satisfaction of the Issuer; (ii) a written instrument by which the Borrower’s purchaser or transferee has assumed in writing and in full the Borrower’s
duties and obligations under this Regulatory Agreement, (iii) an opinion of counsel for the transferee that the transferee has duly assumed the obligations of the Borrower under this
Regulatory Agreement and that such obligations and this Regulatory Agreement are binding on on the transferee, (iv) documentation from the transferee reflecting the transferee’s experience
or, should the transferee choose to have a property manager run the Project, a property manager’s experience with owning and/or operating multifamily housing projects such as the Project
and with use and occupancy restrictions similar to those contained in this Regulatory Agreement, and (v) an opinion of Bond Counsel addressed to the Issuer and the Servicer to the effect
that such transfer will not cause interest on the Bonds, to become includable in the gross income of the recipients thereof for federal income tax purposes. The Borrower shall not allow
any non-profit entity, which is not as of the date hereof a general partner of the Borrower, to become a general partner of the Borrower nor release any non-profit entity which is a
general partner of the Borrower as of the date hereof from the limited partnership without the prior written consent of an Authorized Officer of the Issuer (which consent shall not be
be unreasonably withheld). No transfer of the Project shall operate to release the Borrower from its obligations under this Regulatory Agreement with respect to any action or inaction
taken prior to such transfer. It is hereby expressly stipulated and agreed that any sale, transfer or other disposition of the Project in violation of this Section 10 shall be null,
void and without effect, shall cause a reversion of title to the Borrower, and shall be ineffective to relieve the Borrower of its obligations under this Regulatory Agreement. Not less
than 30 days prior to consummating any sale, transfer or disposition of any interest in the Project, the Borrower shall deliver to the Issuer and the Trustee a notice in writing explaining
the nature of the proposed transfer. The Borrower shall not syndicate the Project unless, prior to such syndication, an opinion of counsel acceptable to the Issuer is delivered to the
Issuer to the effect that (i) the terms and conditions of the syndication do not reduce or limit any of the requirements of the Act or regulations adopted or documents executed pursuant
to the Act, (ii) no requirements of the Issuer shall be subordinated to the syndication agreement, and (iii) the syndication shall not result in the provision of fewer assisted units,
or the reduction of any benefits or services, than were in existence prior to the syndication agreement. Notwithstanding the above, the following transfers will be permitted without
consent of the Issuer: (a) a transfer of partnership interests in Borrower to or by the tax credit investor (the “Tax Credit Investor”) under the limited partnership agreement of the
Borrower (the “Partnership Agreement”), or its respective designee pursuant to the partnership agreement of the Borrower; (b) a transfer of the limited partner interests in the Borrower
of the Tax Credit Investor to an affiliate of the Tax Credit Investor; (c) a transfer of the limited partner interests in the Borrower of the Tax Credit Investor to nonaffiliates of
the Tax Credit Investor; (d) the removal and replacement of the general partner of the Borrower under the Partnership Agreement (the “General Partner”) pursuant to the Partnership Agreement.
Prior to any transfer of partnership interests or removal of the General
17 Partner permitted in (d) above, the Issuer shall receive an opinion of counsel acceptable to the Issuer to the effect that such transfer will not cause interest on the Bonds, to become
includable in the gross income of the recipients thereof for federal income tax purposes. Nothing contained in this Section 10 shall affect any provision of the Loan Documents requiring
the Borrower to obtain the consent of the Servicer to any proposed transfer. Section 11. Foreclosure. Notwithstanding anything contained in Section 10 to the contrary, neither the consent
of the Issuer nor the delivery of items (i) through (v) of the first paragraph of Section 10 (the “Transfer Conditions”) shall be required in the case of a transfer by foreclosure or
deed in lieu of foreclosure, whereby the Holder becomes the owner of the Project, and nothing contained in this Section 11 shall otherwise affect the right of the Servicer or the Trustee
to foreclose on the Project or accept a deed in lieu of foreclosure. The Transfer Conditions shall be applicable to any subsequent transfer by the Servicer or the Trustee. Section 12.
Term. This Regulatory Agreement and all and several of the terms hereof shall become effective upon its execution and delivery and shall remain in full force and effect during the Qualified
Project Period, or for such longer period as is provided in Sections 3(j) and 7 above, and in the CDLAC Resolution referred to in Section 26 below, it being expressly agreed and understood
that the provisions hereof are intended to survive the retirement of the Bonds and expiration of the Indenture, the Loan Agreement, the Loan and the Mortgage. Notwithstanding any other
provisions of this Regulatory Agreement to the contrary, this entire Regulatory Agreement, or any of the provisions or sections hereof, may be terminated prior to the expiration of the
Qualified Project Period upon agreement by the Issuer, the Trustee (if Bonds are still outstanding) and the Borrower only if there shall have been received by the Issuer an opinion opinion
of Bond Counsel that such termination will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or the exemption from State personal
income taxes of the interest on the Bonds. The terms of this Regulatory Agreement to the contrary notwithstanding (except as to the provisions of Section 7), this Regulatory Agreement,
and each and all of the terms hereof, shall terminate and be of no further force or effect in the event of an involuntary noncompliance by the Borrower with the provisions of this Regulatory
Agreement caused by fire, seizure, requisition, change in a federal law or an action of a federal agency after the Closing Date which prevents the Issuer and the Trustee from enforcing
the provisions of this Regulatory Agreement, foreclosure on the Project or delivery of a deed in lieu of foreclosure or condemnation or a similar event, but only if within a reasonable
period thereafter the Bonds are redeemed or retired or amounts received as a consequence of such event are used to provide a project that meets the requirements of the Code set forth
in this Regulatory Agreement; provided, however, that the preceding provisions of this sentence shall cease to apply and the restrictions contained herein shall be reinstated if, at
any time subsequent to the termination of such provisions as the result of the foreclosure on the Project or the delivery of a deed in lieu of foreclosure or a similar event, the Borrower
or any Affiliated Party obtains an ownership interest in the Project for federal income tax purposes. Upon the termination of the terms of this Regulatory Agreement, the parties hereto
agree to execute, deliver and record appropriate instruments of release and discharge of the terms hereof; provided, however, that the execution and delivery of such instruments shall
not be necessary or a prerequisite to the termination of this Regulatory Agreement in accordance with its terms.
18 Section 13. Covenants to Run With the Land. The Borrower hereby subjects the Project (including the Project Site) to the covenants, reservations and restrictions set forth in this
Regulatory Agreement. The Issuer and the Borrower hereby declare their express intent that the covenants, reservations and restrictions set forth herein shall be deemed covenants running
with the land and shall pass to and be binding upon the Borrower’s successors in title to the Project; provided, however, that on the termination of this Regulatory Agreement said covenants,
reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Project or any portion thereof shall conclusively
be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are
set forth in such contract, deed or other instruments. Section 14. Burden and Benefit. The Issuer and the Borrower hereby declare their understanding and intent that the burden of the
covenants set forth herein touch and concern the land in that the Borrower’s legal interest in the Project is rendered less valuable thereby. The Issuer and the Borrower hereby further
declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Low Income Tenants
and Very Low Income Tenants and by furthering the public purposes for which the Bonds were issued. Section 15. Uniformity; Common Plan. The covenants, reservations and restrictions hereof
shall apply uniformly to the entire Project in order to establish and carry out a common plan for the use, development and improvement of the Project Site. Section 16. Enforcement. If
the Borrower defaults in the performance or observance of any covenant, agreement or obligation of the Borrower set forth in this Regulatory Agreement, and if such default remains uncured
for a period of 60 days after written notice thereof shall have been given by the Issuer or the Trustee to the Borrower (or such longer period if the Borrower provides the Issuer and
the Servicer (if any Bonds are outstanding) with an opinion of Bond Counsel to the effect that such extension will not adversely affect the exclusion from gross income for federal income
tax purposes of interest on the Bonds), then the Issuer may, or upon the direction of the Issuer or the Servicer, the Trustee may, subject to the provisions of Section 9 hereof, and
to the extent indemnified pursuant to the provisions of the Indenture, and acting on its own behalf or on behalf of the Issuer, declare an “Event of Default” to have occurred hereunder,
and, at its option, may take any one or more of the following steps: (i) by mandamus or other suit, action or proceeding at law or in equity, require the Borrower to perform its obligations
and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of the rights of the Issuer or the Trustee hereunder; (ii) have access to and inspect, examine
and make copies of all of the books and records of the Borrower pertaining to the Project; (iii) take such other action at law or in equity as may appear necessary or desirable to enforce
the obligations, covenants and agreements of the Borrower hereunder. The Borrower hereby agrees that specific enforcement of the Borrower’s agreements contained herein is the only means
by which the Issuer may fully obtain the benefits of such agreements made by the Borrower herein, and the Borrower therefore agrees to the imposition of the
19 remedy of specific performance against it in the case of any Event of Default by the Borrower hereunder. The Trustee shall have the right, in accordance with this Section 16 and the
provisions of the Indenture, upon notice to but without the consent or approval of the Issuer, but subject to the Unassigned Issuer’s Rights of the Issuer, to exercise any or all of
the rights or remedies of the Issuer hereunder. All fees, costs and expenses of the Trustee (including, without limitation, reasonable attorneys fees) incurred in taking any action pursuant
to this Section 16 shall be the sole responsibility of the Borrower. After the Indenture has been discharged, or if the Trustee fails to act under this Section 16, the Issuer may act
on its own behalf to declare an “Event of Default” to have occurred and to take any one or more of the steps specified hereinabove to the same extent and with the same effect as if taken
by the Trustee. After the date on which no Bonds remain outstanding as provided in the Indenture, the Trustee shall no longer have any duties or obligations under this Regulatory Agreement,
and all references to the Trustee herein shall be deemed references to the Issuer. Notwithstanding anything contained in this Regulatory Agreement or the Indenture to the contrary, the
occurrence of an Event of Default under this Regulatory Agreement shall not (i) be deemed, under any circumstances whatsoever, to constitute a default under the Loan Documents, except
as may be otherwise specified in the Loan Documents or (ii) impair, defeat or render invalid the lien of the Mortgage. The rights of the Trustee under this Section are in addition to
all rights conferred upon the Trustee under the Indenture and in no way limit those rights. Section 17. Recording and Filing. The Borrower shall cause this Regulatory Agreement and all
amendments and supplements hereto and thereto, to be recorded and filed in the real property records of the County of San Diego and in such other places as the Issuer or the Trustee
may reasonably request. The Borrower shall pay all fees and charges incurred in connection with any such recording. Section 18. Payment of Fees. The Borrower hereby agrees to pay all
reasonable costs and expenses of the Agent and the Issuer in connection with the Bonds and the financing of the Project as such costs and expenses become due and payable upon the receipt
of written invoices verifying such costs and expenses. On the Closing Date, the Issuer shall be paid an administrative fee by the Borrower in the amount of one-eighth of one percent
(1/8%) of the aggregate original face principal amount of the Bonds. Thereafter, the Issuer shall be paid an ongoing administrative fee payable in advance every six (6) months commencing
on the Closing Date in the amount of (i) one-half (1/2) of one-eighth of one percent (1/8%) of the aggregate original face principal amount of the Bonds until the Conversion Date, and
(ii) on the first January 1 or June 1 following the Conversion Date and thereafter, one-half (1/2) of one-eighth of one percent (1/8%) of the aggregate principal amount of the Bonds
outstanding immediately after the Conversion Date payable every six (6) months, until the end of the Qualified Project Period. Notwithstanding any prepayment of the Loan and notwithstanding
a discharge of the Indenture, throughout the term of this Regulatory Agreement, the Borrower shall continue to pay to
20 the Issuer the Issuer Fee, and, in the event of default, shall also pay to the Issuer and to the Trustee reasonable compensation for any services rendered by either of them hereunder
and reimbursement for all expenses reasonably incurred by either of them in connection therewith. The fee payable to the Issuer referenced in this section shall in no way limit amounts
payable by the Borrower under Section 7 hereof, or arising after an Event of Default in connection with the Issuer’s or the Trustee’s enforcement of the provisions of this Regulatory
Agreement. The fee payable to the Issuer referenced in this section includes any fee to be paid by the Issuer to any entity which administers the Project. In the event that the Bonds
are redeemed in part or in full prior to the end of the term of this Regulatory Agreement, the Issuer Fee payable to the Issuer for the remainder of the term of this Regulatory Agreement,
at the option of the Issuer, shall be paid by the Borrower at the time of the redemption of the Bonds and shall be a lump sum amount equal to the present value (based on a discount rate
equal to the prime rate identified by the Wall Street Journal at the time of redemption) of the Issuer Fee for the number of years remaining under the Regulatory Agreement. Section 19.
Governing Law. This Regulatory Agreement shall be governed by the laws of the State of California. Section 20. Amendments. Except as provided in Section 6(a) hereof, this Regulatory
Agreement shall be amended by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of San Diego.
Any amendment to this Regulatory Agreement shall be accompanied by an opinion of Bond Counsel to the effect that such amendment will not adversely affect the exclusion from gross income
for federal income tax purposes of interest on the Bonds. Section 21. Notice. All notices, certificates or other communications shall be sufficiently given and shall be deemed given
on the date personally delivered or on the second day following the date on which the same have been mailed by certified mail, return receipt requested, postage prepaid, addressed as
follows: Issuer: Housing Authority of the City of Chula Vista 276 Fourth Avenue Chula Vista, California 91910 Attention: Executive Director Telephone: ____________ Facsimile: ____________
Trustee: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: ______________ Telephone: ____________ Facsimile: ____________
21 Borrower: Congregational Tower Partners, L.P. c/o Retirement Housing Federation 911 N. Studebaker Road Long Beach, CA 90815 Attention: ___________________ Telephone: _________________
Facsimile: _________________ With a copy to: Nixon Peabody 401 9th Street NW Washington, DC 20004 Attention: Michael Reardon Telephone: (202) 585-8304 Facsimile: ________________ With
a copy to: Union Bank 900 Avenue of the Stars, Suite 600 Los Angeles, CA 90067 Attention: ___________________ Telephone: _________________ Facsimile: _________________ Any of the foregoing
parties may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, documents or other communications shall be sent. Copies
of notices sent by any party hereto shall be sent concurrently to each of the parties listed above and the Servicer. In addition to any other notice required to be given under this Regulatory
Agreement, promptly upon determining that a violation of the Regulatory Agreement has occurred, the Issuer or the Trustee shall, by notice in writing to the Servicer, inform the Servicer
that such violation has occurred, the nature of the violation and that the violation has been cured or has not been cured, but is curable within a reasonable period of time, or is incurable.
Section 22. Severability. If any provision of this Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions
hereof shall not in any way be affected or impaired thereby. Section 23. Multiple Counterparts. This Regulatory Agreement may be executed in multiple counterparts, all of which shall
constitute one and the same instrument, and each of which shall be deemed to be an original. Section 24. Compliance by Borrower. The Trustee shall not be responsible for monitoring or
verifying compliance by the Borrower with its obligations under this Regulatory Agreement. Section 25. Obligation of Borrower; Limitations on Recourse to Borrower. Notwithstanding any
provisions of this Regulatory Agreement to the contrary, all obligations of the Borrower under this Regulatory Agreement for the payment of money and all claims for damages against the
Borrower occasioned by breach or alleged breach by the Borrower of its obligations under this Regulatory Agreement, including indemnification obligations, shall not be secured by or
in any manner constitute a lien on the Project and no person shall have the right to enforce such obligations
22 other than directly against the Borrower without recourse to the Project, and all such obligations shall be subordinate in priority, in right to payment and in all other respects
to the obligations, liens, rights (including without limitation the right to payment) and interests arising or created under the Loan Documents. Except as otherwise provided in Section
7 of this Regulatory Agreement, no subsequent owner of the Project shall be liable or obligated for the breach or default of any obligation of any prior owner of the Project (including
the Borrower) under this Regulatory Agreement. Such obligations shall be the Obligations of the Person who was the owner of the Project at the time the default or breach was alleged
to have occurred, and such Person shall remain liable for any and all damages occasioned by the default or breach even after such Person ceases to be the owner of the Project. The following
obligations of the Borrower shall, subject to the limitations set forth in the preceding paragraph, and Section 16 of this Regulatory Agreement, be and remain the joint and several full
recourse obligations of the Borrower and each general partner of the Borrower (other than any nonprofit general partner): (i) the Borrower’s obligations to the Issuer and the Trustee
and the Borrower’s obligation to pay any and all rebate amounts that may be owed with respect to the Bonds as provided in Section 20(h) of the Loan Agreement; and (ii) the Borrower’s
obligations under Section 7 of this Regulatory Agreement. Section 26. CDLAC Requirements. The acquisition, rehabilitation, equipping and operation of the Project and the financing thereof
are and shall be in compliance with the conditions set forth in Exhibit A to the CDLAC Resolution, a copy of which is attached hereto as Exhibit D, which conditions are incorporated
herein by reference and are made a part hereof. The Issuer shall monitor and enforce the Borrower’s compliance with the provisions of this Section 26. The Borrower shall prepare and
submit to CDLAC on each anniversary of the Closing Date, and on such other date as is reasonably requested by CDLAC, a Certificate of Compliance in substantially the form attached hereto
as Exhibit E, executed by an authorized representative of the Borrower. CDLAC shall be a third-party beneficiary of this Regulatory Agreement solely for purposes of enforcing the terms
of the CDLAC Resolution. CDLAC shall have the right to enforce the terms of the CDLAC Resolution through an action for specific performance or any other available remedy; provided, however,
that CDLAC shall not take any action or enforce any remedy that would be materially adverse to the interests of the Bondholders and any such action or enforcement shall otherwise be
subject to the terms, conditions and limitations applicable to the enforcement of remedies under this Regulatory Agreement. Section 27. Damage, Destruction or Condemnation of the Property.
In the event that the Property is damaged or destroyed or title to the property, or any part thereof, is taken through the exercise or the threat of the exercise of the power of eminent
domain, the Borrower shall comply with all applicable requirements of the Mortgage and the other Loan Documents. [The rest of this page intentionally left blank]
S-1 IN WITNESS WHEREOF, the Issuer and the Borrower have executed this Regulatory Agreement by duly authorized representatives, all as of the date first written hereinabove. HOUSING
AUTHORITY OF THE CITY OF CHULA VISTA By: Executive Director ATTEST: Secretary
S-2 “BORROWER” CONGREGATIONAL TOWER PARTNERS, L.P., a California limited partnership By: Congregational Tower, LLC its managing general partner By: Congregational Tower RHF Housing,
Inc., a California nonprofit corporation, its member By: Name: Its: By: Community Congregational Development Corp., a California nonprofit corporation, its member By: Name: Its:
S-3 “TRUSTEE” U.S. BANK NATIONAL ASSOCIATION By: Authorized Signatory
ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN DIEGO On ______________, ______ before me, ______________________________________, 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. Signature __________________________________
(Seal)
ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN DIEGO On ______________, ______ before me, ______________________________________, Notary 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. Signature __________________________________
(Seal)
ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN DIEGO On ______________, ______ before me, ______________________________________, Notary 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. Signature __________________________________
(Seal)
A-1 EXHIBIT A LEGAL DESCRIPTION Real property in the City of Chula Vista, County of San Diego, State of California, described as follows: [TO COME]
B-1 EXHIBIT B CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE The undersigned, ____________________, being duly authorized to execute this certificate on behalf of CONGREGATIONAL TOWER
PARTNERS, L.P., a California limited partnership (the “Borrower”), hereby represents and warrants that: 1. The undersigned has read and is thoroughly familiar with the provisions of
the following documents associated with the Borrower’s participation in the Housing Authority of the City of Chula Vista’s (the “Issuer”) issuance of the Housing Authority of the City
of Chula Vista Multifamily Housing Revenue Bonds (Congregational Tower) Series 2012A , such documents including: (a) the Regulatory Agreement and Declaration of Restrictive Covenants
(the “Regulatory Agreement”) dated as of December 1, 2012, by and among the Borrower, the Issuer and U.S. Bank
National Association; (b) the Note, dated December __, 2012 from the Borrower to the Issuer representing the Borrower’s obligation to repay the Loan. 2. As of the date of this certificate,
the following percentages of residential units in the Project (i) are occupied by Low Income Tenants and Very Low Income Tenants (as such terms are defined in the Regulatory Agreement)
or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Low Income Tenant or Very Low Income Tenant, as applicable,
vacated such unit; as indicated: Studio 1 Bedroom 2 Bedrooms 3 Bedrooms Total Occupied by Low Income Tenants: % Unit Nos.: _____ ____ ____ ____ ____ Held vacant for occupancy continuously
since last occupied by a Low Income Tenant: % Unit Nos.: _____ ____ ____ ____ ____ Studio 1 Bedroom 2 Bedrooms 3 Bedrooms Total Occupied by Very Low Income Tenants: % Unit Nos.: _____
____ ____ ____ ____ Held vacant for occupancy continuously since last occupied by a Very Low Income Tenant: % Unit Nos.: _____ ____ ____ ____ ____ 3. The Borrower hereby certifies that
the Borrower is not in default under any of the terms of the above documents and no event has occurred which, with the passage of time, would constitute an Event of Default thereunder,
with the exception of the following [state actions being taken to remedy default].
B-2 CONGREGATIONAL TOWER PARTNERS, L.P., a California limited partnership By: Congregational Tower, LLC its managing general partner By: Congregational Tower RHF Housing, Inc., a California
nonprofit corporation, its member By: Name: Its: By: Community Congregational Development Corp., a California nonprofit corporation, its member By: Name: Its:
C-1 EXHIBIT C INCOME COMPUTATION AND CERTIFICATION NOTE TO APARTMENT OWNER: This form is designed to assist you in computing Annual Income in accordance with the method set forth in
the Department of Housing and Urban Development (“HUD”) Regulations (24 CFR 5.609). You should make certain that this form is at all times up to date with the HUD Regulations. All capitalized
terms used herein shall have the meaning set forth in the Regulatory Agreement. Re: Congregational Tower Apartments, ________________________, Chula Vista, California I/We, the undersigned
state that I/we have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment
project. Listed below are the names of all persons who intend to reside in the unit: 1 Name of Members of the Household 2 Relationship to Head of Household 3 Social Security Number 4
Age 5 Place of Employment HEAD SPOUSE
C-2 Income Computation 6. The total anticipated income, calculated in accordance with this paragraph 6, of all persons (except children under 18 years) listed above for the 12-month
period beginning the earlier of the date that I/we plan to move into a unit or sign a lease for a unit is $__________. Included in the total anticipated income listed above are: (a)
The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; (b) The net income
from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income.
An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any
withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested
in the operation by the family; (c) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall
not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (6)(b) of this section. Any withdrawal of cash or assets
from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in
excess of $5000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook
savings rate, as determined by the Department of Housing and Urban Development; (d) The full amount of periodic amounts received from Social Security, annuities, insurance policies,
retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start
of a periodic amount except deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly
amounts; (e) Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay except lump-sum additions to family assets, such
as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlement for personal or property losses (excluding
payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay); (f) Welfare assistance. If the welfare assistance payment includes
an amount specifically designated for shelter and utilities that is subject to adjustment by the
C-3 welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of: (1) The
amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus (2) The maximum amount that the welfare assistance agency could in fact
allow the family for shelter and utilities. If the family’s welfare assistance is ratably reduced form the standard of need by applying a percentage, the amount calculated under this
paragraph shall be the amount resulting from one application of the percentage; (g) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions
or gifts received from organizations or from persons not residing in the dwelling; (h) All regular pay, special pay and allowances of a member of the Armed Forces except the special
pay to a family member serving in the Armed Forces who is exposed to hostile fire. Excluded from such anticipated income are: (a) Income from employment of children (including foster
children) under the age of 18 years; (b) Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are
unable to live alone); (c) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation),
capital gains and settlement for personal or property losses except payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance
pay; (d) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member; (e) Income of a live-in aide, as defined
by 24 CFR §5.403; (f) The full amount of student financial assistance paid directly to the student or to the educational institution; (g) The special pay to a family member serving in
the Armed Forces who is exposed to hostile fire; (h) (1) Amounts received under training programs funded by the Department of Housing and Urban Development; (2) Amounts received by a
person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and
C-4 benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS): (3) Amounts received by a participant in other publicly assisted programs which are specifically
for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific
program; (4) Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service
for the Public Housing Authority or owner, on a parttime basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol,
hall monitoring, lawn maintenance, and resident initiatives coordination. No resident may receive more than one such stipend during the same period of time; (5) Incremental earnings
and benefits resulting to any family member from participation in qualifying State or local employment training programs (including training programs not affiliated with a local government)
and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives,
and are excluded only for the period during which the family member participates in the employment training program; (i) Temporary, nonrecurring or sporadic income (including gifts);
(j) Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era; (k) Earnings in excess
of $480 for each full-time student 18 years old or older (excluding the head of household and spouse); (l) Adoption assistance payments in excess of $480 per adopted child; (m) Deferred
periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts. (n) Amounts received by the
family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit; (o) Amounts paid by a State agency to a family with a member who has a
developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or (p) Amounts specifically
excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance
under any program to which the exclusions set forth in 24 CFR §5.609(c) apply.
C-5 7. Do the persons whose income or contributions are included in item 6 above (a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding
the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? Yes No; or (b) have they disposed of any assets (other than
at a foreclosure or bankruptcy sale) during the last two years at less than fair market value? Yes No (c) If the answer to (a) or (b) above is yes, does the combined total value of all
such assets owned or disposed of by all such persons total more than $5,000? Yes No (d) If the answer to (c) above is yes, state: (1) the combined total value of all such assets: $ ;
(2) the amount of income expected to be derived from such assets in the 12-month period beginning on the date of initial occupancy in the unit that you propose to rent: $ , and (3) the
amount of such income, if any, that was included in item 6 above: $ 8. (a) Are all of the individuals who propose to reside in the unit full-time students*? Yes No *A full-time student
is an individual enrolled as a full-time student during each of 5 calendar months during the calendar year in which occupancy of the unit begins at an educational organization which
normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance or is an individual pursuing a full-time course of institutional
on farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof. (b) If the answer to 8(a) is yes, is
at least 2 of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? Yes No 9. Neither myself nor any other occupant of the unit I/we
propose to rent is the owner of the rental housing project in which the unit is located (hereinafter the “Borrower”), has any family relationship to the Borrower; or owns directly or
indirectly any interest in the
C-6 Borrower. For purposes of this paragraph, indirect ownership by an individual shall mean ownership by a family member, ownership by a corporation, partnership, estate or trust in
proportion to the ownership or beneficial interest in such corporation, partnership, estate or truste held by the individual or a family member; and ownership, direct or indirect, by
a partner of the individual. 10. This certificate is made with the knowledge that it will be relied upon by the Borrower to determine maximum income for eligibility to occupy the unit;
and I/we declare that all information set forth herein is true, correct and complete and based upon information I/we deem reliable and that the statement of total anticipated income
contained in paragraph 6 is reasonable and based upon such investigation as the undersigned deemed necessary. 11. I/we will assist the Borrower in obtaining any information or documents
required to verify the statements made herein, including either an income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding
calendar year. 12. I/we acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our
agreement with the Borrower to lease the unit and will entitle the Borrower to prevent or terminate my/our occupancy of the unit by institution of an action for ejection or other appropriate
proceedings. I/we declare under penalty of perjury that the foregoing is true and correct. Executed this day of in the County of San Diego, California. Applicant Applicant [Signature
of all persons (except children under the age of 18 years) listed in number 2 above required]
C-7 FOR COMPLETION BY BORROWER ONLY: 1. Calculation of eligible income: a. Enter amount entered for entire household in 6 above: $ b. (1) If the answer to 7(c) above is yes, enter the
total amount entered in 7(d)(2), subtract from that figure the amount entered in 7(d)(3) and enter the remaining balance ($__________) (2) Multiply the amount entered in 7(d)(1) times
the current passbook savings rate as determined by HUD to determine what the total annual earnings on the amount in 7(d)(1) would be if invested in passbook savings ($__________), subtract
from that figure the amount entered in 7(d)(3) and enter the remaining balance ($__________); (3) Enter at right the greater of the amount calculated under (1) or (2) above: $ c. TOTAL
ELIGIBLE INCOME (Line 1.a plus line 1.b(3)): $ 2. The amount entered in line 1.c: ____ Qualifies the applicant(s) as a Low Income Tenant(s) ____ Does not qualify the applicant(s) as
a Low Income Tenant(s). ____ Qualifies the applicant(s) as a Very Low Income Tenant(s) ____ Does not qualify the applicant(s) as a Very Low Income Tenant(s). 3. Number of apartment unit
assigned: ____ Bedroom Size ____ Rent: $ 4. This apartment unit [was/was not] last occupied for a period of 31 or more consecutive days by persons whose aggregate anticipated annual
income as certified in the above manner upon their initial occupancy of the apartment unit qualified them as [Low Income Tenants/Very Low Income Tenants]. 5. Method used to verify applicant(s)
income: ____ Employer income verification. ____ Copies of tax returns. ____ Other (_________) Manager
C-8 INCOME VERIFICATION (for employed persons) The undersigned employee has applied for a rental unit located in a project financed under the Housing Authority of the City of Chula Vista
Multifamily Housing Revenue Bond Program for persons of lower income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee’s
current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Other Income
Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature Date Title I hereby grant you permission to disclose my income
to _________________________ in order that they may determine my income eligibility for rental of an apartment located in their project which has been financed under the Housing Authority
of the City of Chula Vista Multifamily Housing Revenue Bond Program. Signature Date Please send to:
C-9 INCOME VERIFICATION (for self-employed persons) I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify
that the information shown in such income tax returns is true and complete to the best of my knowledge. Signature Date
D-1 EXHIBIT D CDLAC RESOLUTION RESOLUTION NO. 12-109 1. Applicant: Housing Authority of the City of Chula Vista 2. Application No.: 12-129 3. Project Sponsor: Congregational Tower Partners,
LP (Congregational Tower, LLC; Retirement Housing Foundation, Inc.; Community Congregational Development Corporation) 4. Project Management Co.: Foundation Property Management 5. Project
Name: Congregational Tower Apartments 6. Type of Project: Acquisition and Rehabilitation/Senior Citizens 7. Location: Chula Vista, CA 8. Private Placement Purchaser: Citibank, N.A. 9.
The Private Placement Purchaser at the time of issuance will be the same as represented in the application. Not Applicable 10. Total Number of Units: 184 plus 2 manager units 11. Total
Number of Restricted Rental Units: 184 12. The term of the income and rental restrictions for the Project will be at least 55 years. 13. The Project will utilize Gross Rents as defined
in Section 5170 of the Committee’s Regulations. Applicable 14. Income and Rental Restrictions: For the entire term of the income and rental restrictions, the Project will have: At least
56 Qualified Residential units rented or held vacant for rental for persons or families whose income is at 50% or below of the Area Median Income. At least 128 Qualified Residential
units rented or held vacant for rental for persons or families whose income is at 60% or below of the Area Median Income. 15. For acquisition and rehabilitation projects, a minimum of
$10,000 in hard construction costs will be expended for each Project unit. Applicable 16. A minimum of $0,000 of public funds will be expended for the Project. Not Applicable
D-2 17. At a minimum, the financing for the Project shall include a Taxable Tail in the amount of $0,000. Taxable debt may only be utilized for Project related expenses, not for the
cost of issuance, for which the Project Sponsor could otherwise have used tax-exempt financing. Not Applicable 18. If the Project received points for having large family units, for the
entire term of the income and rental restrictions, the Project will have at least three-bedroom or larger units. Not Applicable 19. For a period of ten (10) years after the Project is
placed in use, the Project will provide to Project residents high-speed Internet or wireless (WiFi) service in each Project unit. Not Applicable 20. For a period of ten (10) years after
the Project is placed in use, the Project will offer to Project residents an after school programs of an ongoing nature on-site or there must be an after school program available to
Project residents within 1/4 mile of the Project. The programs shall include, but are not limited to: tutoring, mentoring, homework club, and art and recreation activities to be provided
weekdays throughout the school year for at least 10 hours per week. Not Applicable 21. For a period of ten (10) years after the Project is placed in use, the Project will offer to Project
residents instructor-led educational, health and wellness, or skill building classes. The classes shall include, but are not limited to: financial literacy, computer training, home-buyer
education, GED, resume building, ESL, nutrition, exercise, health information/awareness, art, parenting, on-site food cultivation and preparation and smoking cessation. Classes shall
be provided at a minimum of 84 hours per year (drop-in computer labs, monitoring and technical assistance shall not qualify) and be located within 1/4 mile of the Project. Not Applicable
22. For a period of ten (10) years after the Project is placed in use, the Project will offer to Project residents 20 hours or more per week of licensed childcare on-site or there must
be 20 hours or more per week of licensed childcare available to Project residents within 1/4 mile of the Project. Not Applicable 23. For a period of ten (10) years after the Project
is placed in use, the Project will offer to Project residents health and wellness services and programs within l/4 mile of the Project. Such services and programs shall provide individualized
support for tenants (not group classes) but need to be provided by licensed individuals or organizations. The services shall include, but are not limited to: visiting nurses programs,
intergenerational visiting programs, and senior companion programs. Services shall be provided for a minimum of 100 hours per year. Not Applicable 24. For a period of ten (10) years
after the Project is placed in use, the Project will offer to Project residents a bona fide service coordinator. The responsibilities must include, but are not limited to: (a) providing
tenants with information about available services in the community, (b) assisting tenants to access services through referral and advocacy, and (c) organizing community-building and/or
enrichment activities for tenants (such as holiday events, tenant council, etc.) Applicable Minimum full-time equivalent hours per year: 651
D-3 25. All projects that receive points for being a Federally Assisted At-Risk Project will renew all Section 8 HAP Contracts or equivalent Project-based subsidies for their full term,
and will seek additional renewals, if available, throughout the Project’s useful life. Not Applicable 26. All projects that receive points for being a Federally Assisted At-Risk Project
based on an expiring Low Income Housing Tax Credit Regulatory Agreement or Tax-Exempt Bond Regulatory Agreement shall have a plan in place to re-certify the incomes of the existing tenants
and shall not cause involuntary displacement of any tenant whose income may exceed the Project’s income limits. Not Applicable 27. Applicants shall meet the multiple sustainable building
standards utilizing landscaping and construction materials which are compatible with the neighborhood in which the proposed project is to be located, and that the architectural design
and construction materials will provide for low maintenance and durability, as well as be suited to the environmental conditions to which the project will be subjected: Applicable With
Waiver(s) Section Waived: ? Energy Efficiency ? CALGreen Compliance ? Landscaping ? Roofs ? Exterior Doors ? Appliances ? Window Coverings ? Water Heater ? Floor Coverings ? Paint ?
Insulation 28. The project commits to becoming certified under any one of the following programs upon completion: a. Leadership in Energy & Environmental Design (LEED) Not Applicable
b. Green Communities Not Applicable c. GreenPoint Rated Multifamily Guidelines Not Applicable 29. The project is a Rehabilitation Project reducing energy use on a per square foot basis
by 25% of the California Building Code by: a. 17.5% Not Applicable b. 20% Not Applicable c. 25% Not Applicable
D-4 30. The Project will exceed the minimum energy efficiency certification requirements for New Construction/Adaptive Reuse: a. LEED for Homes (Silver) Not Applicable b. LEED for Homes
(Gold) Not Applicable c. Green Point Rated (100) Not Applicable d. Green Point Rated (125) Not Applicable 31. The project is a Home Energy Rating System (HERS II) Rehabilitation Project
that commits to improve energy efficiency above the current modeled energy consumption of the building(s) by: a. 15% Not Applicable b. 20% Not Applicable c. 25% Not Applicable d. 30%
Not Applicable 32. The project is a Rehabilitation Project that commits to developing, and/or managing the Project with the following Photovoltaic generation or solar energy: a. Photovoltaic
generation that offsets tenants loads Not Applicable b. Photovoltaic generation that offsets 50% of common area load Not Applicable c. Solar hot water for all tenants who have individual
water meters Not Applicable 33. The project will implement sustainable building management practices that include: 1) development of a percentspecific maintenance manual including replacement
specifications and operating information on all energy and green building features; 2) Certification of building management staff in sustainable building operations per BPI Multifamily
Building Operator or equivalent training program; and 3) Undertaking formal building systems commissioning, retro-commissioning or re-commissioning as appropriate (continuous commissioning
is not required: Not Applicable 34. The project will sub-meter centralized hot water systems for all tenants: Not Applicable
E-1 EXHIBIT E CDLAC COMPLIANCE CERTIFICATE Project Name: Congregational Tower Apartments Name of Bond Issuer: Housing Authority of the City of Chula Vista CDLAC Application No.: ______
Pursuant to Section 13 of Resolution No. ____ (the “Resolution”), adopted by the California Debt Limit Allocation Committee (the “Committee”) on ____________, 2012, I, ____________________,
an Officer of the Project Sponsor, hereby certify under penalty of perjury that, as of the date of this Certification, the above-mentioned Project is in compliance with all of the terms
and conditions set forth in the Resolution. I further certify that I have read and understand the CDLAC Resolution, which specifies that once the Bonds are issued, the terms and conditions
set forth in the Resolution shall be enforceable by the Committee through an action for specific performance or any other available remedy. Please check or write N/A to the items list
below: ________ The project is currently in the Construction or Rehabilitation phase. ________ The project has incorporated minimum specifications into the project design for all new
construction and rehabilitation projects as evidenced by the attached applicable third party certification (HERS Rater, Green Point Rater or US Green Building Council). For projects
under construction or rehabilitation, the information is due following receipt of the verification but in no event shall the documentation be submitted more than two years after the
issuance of bonds. ________ For projects that received points for exceeding the minimum requirements please attach the appropriate California Energy Commission compliance form for the
project which shows the necessary percentage improvement better than the appropriate standards. The compliance form must be signed by a California Association of Building Consultants,
Certified Energy Plans Examiner or HERS Rater as applicable. Signature of Officer Date Printed Name of Officer Title of Officer